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Turns out the ultimate budget weapon may be a U-Haul. These families relocated to areas where homes and daily life cost far less.
Real estate prices are stalling or even declining in some high-cost cities, but buying a home in a decent neighborhood is still just a dream for many middle-class families.
You can try stretching your finances to the bursting point or gambling on a less-desirable neighborhood. Or you can consider doing what many families have done: decamp to somewhere the cost of living makes more sense.
Problem is finding a decent paying job in a small town. Of course you could live in a rural area and commute in, but with rising gas prices you may not be saving a lot of money by doing that, especially if you are commuting into a major, sprawling metro area.
Moving to a low-cost area will generally mean you have more money to save or spend on whatever. As long as you can find a good job, you can afford to live better. In California, New York, Miami $500k won't buy you as much as in Missouri. Around here, $500k will buy you AT LEAST a 4-5 bedroom house with a nice sized yard.
Problem is finding a decent paying job in a small town. Of course you could live in a rural area and commute in, but with rising gas prices you may not be saving a lot of money by doing that, especially if you are commuting into a major, sprawling metro area.
ITA. The best option might be to just look for a metro area with a lower cost of living then to move to the middle of nowhere with a long commute.
I think what benefits a person looking to relocate for retirement is eliminating the need for employment.
Once the need for employment comes into play, many small town areas loose their appeal.
Problem is finding a decent paying job in a small town.
Eeyup. Also, if you do find a decent job in your field, if you happen to lose it for some reason (laid-off, fired, feel need to quit) it might be hard to find another one and in the meantime, you're tied down to what was an affordable house.
However, for folks who own their own solo practice businesses who work out of their homes and who don't need a particular physical presence anywhere, it might make a lot of sense.
ITA. The best option might be to just look for a metro area with a lower cost of living then to move to the middle of nowhere with a long commute.
Maybe move to a small or medium-sized "big city" metro area (one big enough to support a pro football team) and then live on the outskirts of it or, say, just outside of the city where you'd have a 45 minute commute on an expressway, if something like that is possible.
We moved from the DFW metroplex to Lindale, Texas 6 months ago. We now live on less money at a higher style of life. We live in a much nicer house and neighborhood and pay about 150.00 less a month. We get our dog groomed for 22.50 instead of 50.00. Our safety inspection on our car now cost 14.00 instead of 40.00. We live about 7 miles from fast food...so we only get that once every week....just because it's a hassle. We don't live by the largest mall in Texas anymore...so we only shop about once every month when we go into Dallas. We live in an excellent school system. We have a Super Wal Mart in town. What more could I ask for?
We moved from the suburbs to a rural area about nine years ago. We didn’t have to sacrifice much in convenience, as the small town closest to our home now is only about 10 minutes away and has all the basic things we need (pharmacy, hardware stores, small grocery, video store, gas stations, post office, pizza, etc.). The main drawback is that the move doubled the distance my wife and I have to drive to work, which hits us pretty good both in terms of added fuel costs and time spent commuting (we each drive about 500 miles per week). Nevertheless, we still think it’s one of the best decisions we’ve made.
I did some calculating just to see what some of the economic benefits or drawbacks of our decision might be. Basically I compared the cost of housing and fuel (at a rate of $3/gallon) at my present home and for a comparable home half the distance closer to the nearest metro area (Cincinnati/Northern Kentucky), which would put us back in the suburbs. In my region, the cost of the property where I presently live is about 1/3 less than it would cost for the same square footage, but less acreage, in the ‘burbs. What I found was that while I would save approximately $3125/year in fuel costs living closer to the city, I would be adding $6600/year in mortgage payments (assuming the terms were the same as my current mortgage). So moving closer would leave me with a net loss of $3475/yr or $52,125 over the term of a 15-year mortgage. So it looks like our decision is financially sound as long as gasoline prices don’t top $6/gallon.
Aside from possibly having to replace vehicles more frequently (I say possibly because we tend to squeeze a lot of miles out of our cars), most other costs would remain the same since we still do most of our shopping within the metro area. Overall, this entire region has a relatively low cost of living.
I think what benefits a person looking to relocate for retirement is eliminating the need for employment.
Once the need for employment comes into play, many small town areas loose their appeal.
This is right on, though you don't have to totally eliminate the need for employment. You just have to scale it way back.
I moved to a small town (800 people) four years ago and am mostly retired now. I was 36 at the time, now 40. If you add up all my work hours, they equal about 2 months per year.
How did this work? I scaled down not only my town size but my home size. I went from a 3BR house with a 15-year mortgage to a 1BR cottage with no mortgage. With no house payment or rent, I can live on very little income.
I still freelance as a consultant, but if I absolutely had to, I could get by working at a local tourist shop for minimum wage. I freelance via e-mail and FedEx, so there's no commuting.
Granted, to do this requires some capital. In my case, I used the equity in the 3BR house to pay cash for the small cottage. I had enough left over for an "emergency cushion," but so far I haven't had to tap it.
There are ways to live so much easier, well out of the rat race, if you scale everything down -- small house, small town, small income. It also helps to scale back what you think you "need." Most people don't need half of what they have.
I can't tell you how much bigger my life feels now.
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