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You could live on $3500 in Honolulu or Pear City. Pear City is definitely less expensive. And as long as you don't have to drive into Honolulu very often you would be fine living in Pear City & going to UHWO.
Living in Honolulu on $3500 a month for both of you would be doable but you may have to watch you budget. Traffic sucks in town but thebus is excellent & depending where you live you could most likely walk or bike most places. As much as traffic sucks, parking is just as bad. As long as you live in town & don't need to leave town, traffic is really not awful. Especially if you're used to Chicago traffic. Traffic isn't as bad as Chicago but ppl are worse drivers here, in my opinion.
I would definieyly suggest that you decide where you will go to school, then find jobs, then live as close as you can to both. At least live as close as you can to whichever you're going to be spending more time at. You're moving to paradise, you don't want to spend any extra time sitting in your car when you could be enjoying life here!
I did the commute from Aiea (near Pearl City) to Hono for college and I would NOT do that. I had to leave early to miss the traffic and get an actual parking space anywhere near the college. The way the highways are constructed does not allow them to add lanes (some of the houses are very close to the highway) so it's pretty easy to get stuck in the parking lot. I attended the community college for a while, which was closer to me and since they were affiliated with UH, the classes transferred, but again, I had to take a majority of my classes in Hono. Figure out where you're going to school first, then figure out the living situation.