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Old 05-09-2011, 07:16 PM
 
Location: DFW
6,717 posts, read 11,173,836 times
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For me, housing isn't a very high priority in my life and I don't wish to invest in my own home despite popular belief (although I have other investments.) It seems when you disregard housing, the cost of living between the high and low cost areas aren't radically different.

Case in point, one of my best friends who is currently unemployed lives in San Francisco and pays maybe about $500/600 in rent to rent a room to share a housing unit in a relatively good neighborhood. He doesn't own a car and just buys the monthly bus pass for about $50-60 or whatever to get unlimited transportation around the city. Figure about $70 for health insurance and $200 for food (mostly cooking rather than eating out) and he's spending less than $1000/mo of his savings to live in SF while looking for a job in the area.

He might spend less than that to live in, say, Omaha but since his career is in IT and most of his connections are in California, it makes much more sense to be located in San Francisco than Omaha while looking for the job.

I'm curious if any other people here manage their frugality despite living in a high cost of living area (i.e. California, East Coast, Chicago, Miami, DC, Raleigh, etc.)?
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Old 05-09-2011, 07:24 PM
 
Location: Las Vegas
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I imagine lots of people do choose to live in these places. That's probably what taught them how to be frugal. Necessity.
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Old 05-09-2011, 07:47 PM
 
Location: The Triad (NC)
26,867 posts, read 57,900,981 times
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ragnakar, are you familiar with the concept of "making your pile" ?

A key component of a pile would be owning your own home.
If you can pull that off in San Francisco... good for you! Most people can't.

The problem with remaining in the very high end cities to work your career but always as a tenant is that even fewer of these people will be able to ever buy a home. The cities a knotch or two down the pecking order pay almost as well but have had better RE dynamics. Most still do.

The social life aspects and energy of being in a place like SF come at a VERY high price.
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Old 05-09-2011, 10:06 PM
 
5,547 posts, read 8,294,971 times
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Quote:
Originally Posted by MrRational View Post
ragnakar, are you familiar with the concept of "making your pile" ?

A key component of a pile would be owning your own home.
If you can pull that off in San Francisco... good for you! Most people can't.

The problem with remaining in the very high end cities to work your career but always as a tenant is that even fewer of these people will be able to ever buy a home. The cities a knotch or two down the pecking order pay almost as well but have had better RE dynamics. Most still do.

The social life aspects and energy of being in a place like SF come at a VERY high price.
True, I was always 100K short in SF. Your last sentence could not be more true. If you're not rich in CA and particularly SF, the quality of life will be nothing more than realizing you're not even above median for the most part.
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Old 05-10-2011, 12:05 AM
 
24,738 posts, read 26,803,263 times
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Quote:
Originally Posted by MrRational View Post
ragnakar, are you familiar with the concept of "making your pile" ?

A key component of a pile would be owning your own home.
If you can pull that off in San Francisco... good for you! Most people can't.

The problem with remaining in the very high end cities to work your career but always as a tenant is that even fewer of these people will be able to ever buy a home. The cities a knotch or two down the pecking order pay almost as well but have had better RE dynamics. Most still do.

The social life aspects and energy of being in a place like SF come at a VERY high price.
It really depends on if you care about owning a home or not. I don't live in SF proper, but do live in the area where costs are high. Of course, I would prefer housing costs be lower...but if you don't care about home ownership, then it doesn't matter as much.

If you can rent a room for many years as the person mentioned in the first example is doing, you can accumulate quite a bit of money in your 401K, etc. Although, I do agree....most people don't do that, unfortunately.

Renting has a lot of advantages if you can keep your rent to 20% or less of your gross income. You've got more predictable expenses, don't have to worry about repair costs, etc.
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Old 05-10-2011, 12:06 AM
 
24,738 posts, read 26,803,263 times
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Quote:
Originally Posted by mistygrl092 View Post
True, I was always 100K short in SF. Your last sentence could not be more true. If you're not rich in CA and particularly SF, the quality of life will be nothing more than realizing you're not even above median for the most part.
There is a lot of truth to this. People inevitably compare themselves to others. They feel poor if they're not earning as much as the people around them even if they're not objectively poor. Extroverts are more vulnerable to this than introverts.
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Old 05-10-2011, 02:19 AM
 
Location: North
810 posts, read 1,272,037 times
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I agree. We live in a HCOL and housing is our major expense since the rents are way higher than in a LCOL. True, you can live in the ghetto cheaper, but if you want a nice place with good enough schools and so, you have to pay for housing. For nice place I'm not talking luxury, we live in a 100+ old house (some 1,000 sq for a 3BR) in an established neighborhood.

For us, renting is what tip the scale. Utilities are also higher here, but food and other necessities are actually cheaper here than in other places we've researched. If we could find a job in a LCOL place, we'll leave here tomorrow. I'm pretty sure our quality of life will go up (as will our savings).
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Old 05-10-2011, 06:50 AM
 
Location: Victoria TX
42,668 posts, read 71,574,557 times
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Quote:
Originally Posted by mysticaltyger View Post
People inevitably compare themselves to others. They feel poor if they're not earning as much as the people around them even if they're not objectively poor..
That cuts both ways. Which is why so many ordinary people in the third world are "richer" than Americans.
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Old 05-10-2011, 08:15 AM
 
Location: The Triad (NC)
26,867 posts, read 57,900,981 times
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Quote:
Originally Posted by jtur88 View Post
That cuts both ways. Which is why so many ordinary people in the third world are "richer" than Americans.
philosophical aspects aside...

when you get to your mid 50's or so you are very likely to discover that having a fully paid for home of your own, even a modestly sized one, is a very Good Thing.

This will be just as true whether living in a H-COL area or a L-COL area.

Whether it is best to have lived there for the prior thirty years diligently paying off a mortgage or renting and investing in other ways... and using a later in life cash out investments to shift those assets to RE... is really too subjective to evaluate well; especially in a venue like this forum.

Either approach can be just fine... if the choice is actually there.
But for far too many the choice isn't there now and likely won't be for the subsequent crops of people entering their 50's and planning retirement either.

Plan well.
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Old 05-10-2011, 09:30 AM
 
Location: NJ
22,690 posts, read 28,576,098 times
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i cut where i dont feel like im getting the value for the extra money. thats primarily in groceries and dining out. i eat out plenty, but i dont go to expensive places and i try to have coupons or other deals. i choose to live in a very nice town but not the most expensive house in town. im fortunate that i dont need to cut anything so i can choose to just keep things under control and make sure to get what is most important to me and cut where i can.
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