Sarah and I have relatives and friends spread all across the country: Chicago, Minneapolis, Seattle, Boston, New York. We have friends that live in cities, friends that live in the suburbs, and friends that live out in the country.
One thing we’re often amazed by is how drastically different the prices are for homes in those various areas. We have friends that own a 2,500 square foot home on dozens of acres who paid less for their home than another friend who owns a two bedroom home with less than 1,000 square feet on a lot that’s barely bigger than their house.
The difference is the part of the country that they’re living in. Some areas are drastically less expensive than others without really giving up any of the qualities that Sarah and I value.
Here’s a simple example. Go to your preferred website for nationwide housing prices and start comparing houses in San Francisco and Des Moines. You’ll quickly observe that for similar houses, the house in San Francisco will be two and a half to three times as expensive.
Let’s assume you’re financially sensible and are trying to keep the total cost of your housing under 30% of your total income. That means in order to live in a home in the San Francisco area that compares to a similar home in the Des Moines area, you’ll have to earn two and a half to three times as much salary in order to be able to cover it. That means higher taxes, too, so your proportion of take-home pay that you get to keep after taxes and housing is lower in San Francisco.
The comparison gets even more stark when you start including more rural areas. Even around Des Moines, you can slash prices by more than 50% if you’re willing to live in the rural areas outside of the Des Moines metro.
There are a few counter-arguments against this idea, of course.
I want the cultural advantages of the more expensive area. That’s certainly a strong consideration provided you actually take advantage of those cultural opportunities on a very regular basis. If you don’t go out every weekend and you go more or less straight home from work every night, then you’re not taking advantage of the cultural opportunities that you’re paying for with a higher housing cost. Look at your own natural behavior and use that to determine if this is actually something you’re obtaining value from.
My job requires that I live in this more expensive area. Make sure that it actually does. There are jobs of all kinds all throughout the country. You don’t have to live in Silicon Valley to have a great tech job. You don’t have to live in D.C. to have an important political job.
All of my friends and family live here. Relationships can be a powerful attachment to an area, but moving away doesn’t mean the end of those relationships. It also opens the door for a lot of new ones. For a large chunk of my life, almost all of my family and friends were in a particular area in Illinois, then I moved several hours away to near the Des Moines area. I still have almost every relationship I valued from my Illinois days, plus many, many more.
If you’re struggling to make ends meet in an area and housing costs are a big part of that problem, start examining your options in other areas of the country. Cast out your job search net into areas you’ve not considered before, and be willing to move if an opportunity presents itself.
This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.