Can’t afford your life? Might be time to move

Is your city too expensive? Relocating to greener pastures might seem more like a dream, but you can make it a reality.

When Tracy Abriola and her husband bought their first home in Pennsylvania in the US, they didn’t spend a lot of time researching the costs of the area — they just wanted an older home they could renovate in an area with good schools.

But, it turned out they'd signed up for hefty property taxes and schools that weren’t as good as they thought. The couple ended up putting their daughter in private school, another unexpected expense.

“One day, my husband said, ‘We could be going to Europe twice a year with what we’re paying for taxes, tuition and landscaping’,” says Abriola, now in her 40s and working as a marketing and communications manager. “We were paying a ridiculous amount of money — over $30,000 [per year]. So we decided to move.”

When they moved to a town nearby, they cut their property taxes in half and no longer felt the need to use private school. “We have the same-sized house, but we pay a lot less,” Abriola says.

Feeling stretched isn’t unusual. Thirty-one percent of British workers say they usually live paycheque to paycheque, according to a survey from CareerBuilder.co.uk. In the US, that number is 40%. But for some people, it isn’t necessarily a low salary that’s challenging their finances — it’s the expensive place they’re living.

When Serena Connelly recently moved from the pricey New York City area to a nearby suburb, she estimates she shaved 20% off of her monthly bills, from housing to parking to monthly transit cards. “We’re thrilled,” says Connelly, 44, who is a freelance advertising creative director. “This is the best move we’ve made in 10 years.”

If you’re considering trading your high-priced city for a cheaper location, here’s what you should consider:

What it’s going to take: You’ll have to pinpoint what’s important to you and try to find it elsewhere for less money, which can take some legwork. You may also need a strong constitution to deal with the upheaval of a full-life move. And, you might need to factor in a longer commute.

How long to prepare: If you’re moving somewhere nearby but keeping the same job, there’s not much work to do. But if you’re job hunting, house hunting and school hunting, you’ll likely need six months to a year, possibly longer.

Do it now: List your priorities. Write down the things in life that are most important to you, and then put them in order from most to least important. “This helps you separate the emotions into a stream of logical decisions,” says Peter Creedon, a financial planner with Crystal Brook Advisors in New York in the US. Is it a good school district? Is it commute time? Is it the culture of an area, or the potential to find a better job? Thinking about what matters can help you narrow down where you want to go next.

Use your resources. Look for information on the most budget-friendly cities in your area or best places for singles, couples or families to live, depending on your situation. Include word of mouth, online forums and your own personal preferences to create a list of potential locations. Talk to realtors about costs. And, get estimates for utilities in the area along with any other likely living expenses.

Do a budget side-by-side. Don't wing it. Put together a potential budget in a new area and compare it to your current expenses. Make sure you’ll be saving enough money to justify moving your life, which is a big deal.

Think like a local. To research costs in a new area, try it out. “A quick trip to a supermarket, cinema or even a restaurant can give some indication of costs and how they might compare to your existing location,” says Nicholas Goulden, regional managing director for Your Move estate agents in the UK. “Monthly outgoings such as gym memberships, council tax, nursery care and travel season tickets are also a sure way to calculate the costs of living in a new location.”

Consider the next train stop. Sometimes you can achieve significant savings simply by moving to the next town on the public transit line. “If you take a town like Hitchin, which is 35 minutes from London, moving two stops up the train line could save you up to 20% or more on the cost of the home that you buy,” says Adam Day, founder and MD of Hatched.co.uk, an online estate agent site.

Go back to your roots. For some, one route to cheaper living costs is returning to their hometown. That’s what Linda Howey did. She moved back to North Carolina in the US after years in New York. “I was born and raised here and all of my siblings still live here,” says Howey, 56. “I sold my house [in New York] and purchased a house here for all cash. I have no mortgage and my taxes are 75% less.” 

Do it later. Make sure you can find health care. “My clients who are moving have started to run into a very unexpected issue: finding a doctor,” says Ed Gjertsen II, a financial planner with Mack Investment Securities in Illinois in the US. “You should ensure that a physician of choice in a new location is actually accepting new patients.”

Be sensible. “People tend to underestimate how difficult relocating can be and sometimes can be unrealistic about new and often longer commutes to work or school,” says Mark Johnson, real estate expert and tutor at the University of Law in the UK. “People also often take for granted the amenities of their current location — which of course they are paying for through a higher cost of living — but they really miss those amenities once they have relocated.”

Do it smarter: Look at the whole picture. If you’re paying significant property taxes and you find a place where property taxes are lower, that can feel like a financial win. But, some cities make up for a low cost in one place with a high cost in another. “Some states have very high income taxes but lower property taxes,” says Kristin Sullivan, a financial planner with Sullivan Financial Planning in Colorado in the US. “If your kids are in good schools and that prevents you from spending on private schools, that higher property tax may be worth it.”

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