photo credit: ILoveButter
We are all trying to cut expenses and make the most of each paycheck, but what if you could increase your take home pay another way? Would you relocate and move your family to make your dollar stretch even further? Do you have a dream of moving your family to a small town where the pace of life is slower? Worried that the local shopping mall is tempting for you or your teenage kids?
What if you could relocate with your current employer and drastically cut your home mortgage payment? Add to that, your home insurance, car insurance, and many other expenses. Where would I first look? Lot’s of places online such as Realtor.com can allow you to daydream or research what a home would cost in smaller towns. I started researching towns outside of the Bay Area to find out where the dollar would go a little further.
Some things I kept in mind during my research:
1. Schools. Check schools test scores and see how they compare to your current district. It might be better. If you home school, this won’t be an issue.
2. Property tax. If you are moving out of state, be sure to check the local property tax rates. If you are moving from California, you might be surprised to see rates higher in Texas or New Jersey.
3. Insurance. Your home insurance and car insurance rates may decline as you are moving to a smaller town. Less crime, lower rates.
4. Public transportation. Here in Northern California we have Bart and train service to Sacramento area. New Jersey and New York have a great train system as well. Could you extend your commute to your current job? Would the trade-off in time and expense outweigh the cheaper mortgage payment? You also might be able to telecommute on the train.
5. Friends. Maybe you have a friend that recently moved and they love the new home. You could allow them to get settled and test out the new community before you make the plunge. Keep in touch with them and find out what they like about the new town and what they don’t.
How much would you have to save on your home mortgage or rent in order for moving to make financial sense to you? $500 a month or $1,000 off your mortgage payment? Maybe you love your friends, family, and town and could never move.
Need more inspiration? Here’s an article from MSN where people have made the move to small towns.
{ 8 comments… read them below or add one }
Those preparing to retire in expensive areas (northeast, California) need to give serious consideration to this relocation strategy. It can make the difference between a beans and rice diet vs. a comfortable lifestyle. You should start by looking at state income taxes. Relocating inside the state of California won’t help much. The entire place is going down in financial flames and all taxpayers will end up paying for it.
@ Mr. GoTo
It would certainly make sense to retire to a cheaper community if the option becomes available. I worry that retirees will be stuck holding properties while the market continues to deteriorate. Hopefully, home prices will stabilize and allow people to assess retirement needs, and lifestyle options and allow for them to consider making a move. I am curious to see if data will emerge on the number of families/individuals moving out of California for cheaper states.
My family did that same thing almost two years ago. My wife wanted to stay home with the kids and we needed a larger home. We lived in the Midwest and the taxes were high as well as the price of a home (at least it was 2 years ago). We moved to the Southeast after I took a position with a 15% pay increase. While that was nice, the move actually gave us a lot more take home pay because our taxes got cut in half along with housing prices.
@ PFIncome
Sounds like you benefited in several ways from your move. Are the schools better for your kids where you live now? I know this can be a big impact on the kids when you move.
Having done this, I know it is difficult emotionally (leaving friends and family), but rewarding financially. As my wife said, it was nice to live close to family and friends, but we didn’t get to enjoy them because we had to work so much to keep the lifestyle we had where we used to live. Not that it was lavish, it was just costly.
@ Anthony
It is very nice living close to friends and family, but you are correct…you should be able to enjoy it as well and not work so hard. Hope you have met some great friends where you’re now living.
Hi Steve,
My husband talks about this all the time but only if we can move my mom, mil and siblings with me! I need the support and help from my family eventhough we have a strong church family. I also love CA weather too much with all its floods, earthquakes, and fires! LOL
@ Naomi
Having family and friends is a major consideration to think about when moving. It definitely helps to have a family or friend in the new city. Although, it does give some people an opportunity to start fresh.