How to Minimize the Cost of Living When Moving: The Cost of Living Myth

By Craig Ford on 11 December 2009 (Updated 4 June 2014) 20 comments
Photo: RBerteig

“You’re crazy. I can’t afford to move there — the cost of living is way too high.”

When looking for jobs in new markets people correctly investigate the cost of living. Cost of living is an important consideration when moving to a new location. Nevertheless, there are many false assumptions regarding the cost of living differences.

People falsely assume the cost of living calculator is infallible. While there are many sites that can give you some of those numbers, you should realize those numbers only represents a static mathematical equation. Your purchases, habits, and product usage will not be static. Therefore, you can reduce the cost of living expenses incurred by moving to a new city

The cost of living myth is that you cannot afford to move to certain cities unless you make “x” number of dollars. This simply is not true.

I have experienced a lot of moves in my adult life. This post did not evolve out of some theoretical concepts. They are practical experiences. I have lived in three countries internationally and four different states. My conclusion is this: cost of living differences can be dealt with by lifestyle adjustments not just income adjustments.

The Ice Cream Factor: Buy Less of What Costs More

Two liters of ice cream in my hometown (Alotau, Papua New Guinea) starts at $7.00 and goes as high as $11.00. While living in the States, we could buy the same amount of ice cream for $3. The static mathematical reality is that ice cream costs two to three times more. However, the practical reality is that we have adjusted how often we buy ice cream — less. Therefore, we now spend $7.00 per month instead of $9.00, for three containers of ice cream. Total difference = spend $2.00 less per month on ice cream.

You can minimize the impact of a cost of living change by buying more expensive items less frequently.

The Fruit Factor: Buy Local Alternatives

There are certain North American fruits we cannot find. There are, however, things like apples that are available in our stores. Those items are shipped in from either Australia or New Zealand. Because they come in from overseas we pay around .50-.75 cents per apple. However, we have found fruits like Pomello (similar to grapefruit) that only cost .30 cents during harvesting season. So instead of spending .50 cents on apples, we buy pomellos for .30 cents.

You can minimize the impact of a cost of living change by buying local alternatives or items in season.

The House Factor: Downsize

Housing is probably one of the most discussed parts of the cost of living. A four bedroom house is $150,000 here and $200,000 there. Yet, there are still ways to make the move if you wish. Perhaps instead of buying a four bedroom house you purchase a two bedroom house. Yes, you are not getting the same amount of house, but you are still only paying $150,000 for a house. You might even consider buying a house that has an unfinished basement or something that allows you to improve in the future.

You can minimize the impact of a cost of living change by downsizing and reducing your expectations.

The Transportation Factor: Minimize

Trucks (necessary due to the number of pot holes) cost a lot to maintain where I live overseas. Unleaded gasoline costs around $7 per gallon. Still, you can get around this buy buying cars that are older than you might typically buy. Furthermore, as you explore transportation alternatives you might find that your new location has a very good public transportation system. We pay .36 cents to ride the bus anywhere in town. I know many people who live in Asia who don’t buy a car or truck, but who purchase a scooter instead.

You can minimize the impact of a cost of living change by minimizing your vehicle usage or exploring cheaper local transportation alternatives.

The Vacation Factor: Enjoy New Sites and Sounds

If you have just moved to a new city for at least that year (and probably more), you can enjoy the destinations within driving distance of your new home. Perhaps you are moving from Utah to Florida. Take a vacation to the beach and you will save on airfare and other travel expenses. Perhaps you moved from Florida to Utah. Take advantage of some great camping destinations or skiing in the winter. When looking for something fun, look locally before thinking about heading out of town.

You can minimize the impact of a cost of living change by vacationing in and around your new home.

Can you afford to move to a city with a higher cost of living?

I hope when thinking about a future move, you won’t just accept the cost of living myth. Ask yourself, “will it really cost that much more?” “Is there anything I can do to reduce the cost of living impact?” For example, when living overseas you will need to explore the cheapest ways to exchange foreign currency. When it comes to making your moving decision don’t just get online and let a website tell you if you can afford to move. The calculator is static, but you must be willing to adapt, to be flexible, and to be financially resourceful. Ultimately, you can make up for a lot of cost of living changes simply by life style changes.

What are your experiences with moving? What was the cost of living impact?

This is a guest post by Craig Ford, author of Money Wisdom From Proverbs. Read more from Craig on his blog, Money Help For Christians.

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Guest's picture

Craig, nice post.

Just the first point alone is very much worth thinking about.

When I think about it, I rarely see regular purchases in terms of the total spend, rather than the quantity.

Very interesting.

Guest's picture

Your post just confirmed the cost of living myth.

Buying less stuff does not reduce the cost of living. That remains the same.

No matter how much you try to glamorize downsizing, it is still downsizing. In a city with a higher cost of living you will get less per dollar spent in a less expensive city.

Guest's picture

"Your post just confirmed the cost of living myth."


Guest's picture

It is nice to think it does not matter that cost of living has an impact, but to me why adjust to have less what is the purpose. For a move you try to improve to have more for more. You spend 2.00 less on ice cream by choice not necessity.

Guest's picture

We moved from Oregon to Santa Fe. We knew up front that the "cost of living" was higher. However, it was our hearts' desire so we were determined to make it work. We have done all the above and I have become a frugality maven. We have an incredible life and for not a lot of money. One of the aspects that is important to us is the quality and healthiness (is that a word?) of our food. And yes, there were some expensive grocery stores in the area. But with a price book, I have learned how to pick my sales. I also discovered a CSA in which I can get my organically grown, local produce for half what I would spend for produce anywhere else, organically grown or not. We do spend our time around here - great state that it is. However, with careful planning, we just came back from Australia. It can be done.

Guest's picture

while i have never had to make a move so big that it is worth talking about and making a blog post, i must agree with everything you say. particularly the tip in the image about making many friends before you move. A helping hand and a few teary hugs will make what is normally perceived as a hard thing a little easier

Guest's picture

I know this is off topic, but I LOVE Pomellos, and they are so expensive here! I would trade you our cheap apples for your cheap pomellos any day of the week :) Grass is always greener, right?

Guest's picture

I can totally relate. A few months ago, my wife and I had to move back from Malaysia to the Philippines. Even though the Philippines is our home country, a seemingly simple "coming home" move was not nearly as simple as we originally thought.

First, we had to worry about how to ship our stuffs (tables, chairs, LCD TV, and many others) from one country to another.

Second, we had to figure out, whether to rent or buy a house once we get back. This becomes tricky, especially when you have to decide within a month because your new employer requires you to be in the office at exactly 1 month after you tendered your resignation from your previous employer.

And lastly, we had to wonder for many nights whether it was the right decision to move or not.

These may not directly translate to monetary costs...but the amount of time you have to spend worrying about things...has its own associated cost (albeit mentally & emotionally).

Guest's picture

Living in Atlanta, there's kind of a reverse cost of living factor. The cost of living here is generally lower than it is in most of the country.

This is especially true in regard to housing. Atlanta may be the lowest priced large metro area in the country when it comes to housing. But what a lot of transplants do, rather than buying something comparable in size but lower in price, is to buy something comparable in price. That can wipe out the cost of living advantage.

For expample, they might sell a three bedroom, two bath house in the NYC area for $500,000, and rather than buying a equivalent house in Atlanta for $250,000, they spend %500,000 to buy a five bedroom, 3.5 bath house.

It should go without saying that the larger house will "require" a good bit of new stuff to fill it, creating an entirely new expense category.

In that situation, even though you could take advantage of the lower cost of housing to lower the cost of living, it seems most people don't.

Guest's picture

I have to agree. We lived in south Georgia and the cost of living was lower then the Atlanta area (we have relatives there). We moved to outside of Birmingham, AL to accept a new job and now I spend about 3x as much as I did in GA, rent, utilities, food. I live by a budget. It just surprises me how one state over it can be so different. The counties here tax payroll checks and they charge fees for classes in the public schools. I was in sticker shock. My kids are in upper level honor classes and they have fees for those classes and other fees for like art, home economics, etc. They are in high school, but it even happens in the middle school. To me it is nuts, but we do what we have to do and try to live within my budget, but it can be hard sometimes.

Guest's picture

If you are single, there are many more opportunities for you to deal with adjusting to a higher cost locale. You can get roommates in Manhattan and figure out a way to make the financial math work. With a family, it gets much more difficult. If you move to an area with terrible public schools and you have kids, private school isn't cheap. The other option, going out to the suburbs, also has its expenses even though you can get "free" public schooling.

Boil it down, housing and taxes are typically as much as 50% of your gross income in high cost places. You can save on ice cream, fruit, etc. but the reality is that they represent very small parts of your gross income.

I think there are some good points here that sometimes the cost of living is overblown, but I don't think its a myth. How do people live a reasonable life in super expensive places:
- They rent instead of buying
- They vacation less, especially if their locale is nice
- They focus on getting deals more on everything they buy

Cost of Living is no myth, it may be overstated, but you can't say that Manhattan or Los Angeles isn't super expensive just because a homeless person can live there.

The tips on how to reduce your cost of living in these places are solid, but for people that do them already, there isn't any savings.

Guest's picture
RJ Weiss

I agree. If you really want to live in a certain area, just think a little outside the box. It can easily be done.

This recently just happened to me. We bought a house in nicer neighborhood than we lived in previously. An online COL calculation would have said that this was impossible. However, are fixed costs are the same as they were before.

Guest's picture

The ideas in this post are exactly what we are using to live well enough with our six children on one income. No, the two-year-old won't get an iPod Touch for Christmas. Other than that, we have pretty much everything we NEED.

Philip Brewer's picture

You're absolutely right that you by adapting, substituting, adjusting, and downsizing you can make living just about any place affordable.  But I don't think that means that you should just ignore the different costs of living when deciding where you want to live.

That's not just because you can live better for less someplace where things are cheap (although that's true).  The big win comes from the "design snowball" effect of how things depend on one another.

For example, if you choose a town with moderately priced housing, you might be able to find a place to live that's not only bigger (higher standard of living), but also close enough to work that you can walk.  If that means you don't need to have a car at all, you can save thousands of dollars a year.  (Living someplace with good public transit can have the same effect.)

If living someplace with good schools means that you don't have to pay for private schools for your kids, you can save thousands of dollars there too.  If you spend some of the money on stuff that broadens/enriches your kid's learning and experience, you can give them a leg up that would have cost a lot more if done other ways.

Layer a few of these things on top of one another (good library, good museum, good parks, good natural areas nearby, good university...) and you can live much better for a lot less.

Sure, you can adapt to whatever circumstance you find yourself in.  But you can also be strategic about choosing your circumstance.

Guest's picture

Thanks for this post. It's especially relevant for people like us who moved to a more remote part of the country where daily expenses (groceries, utilities) may be higher due to location, but one of the major expenses (housing) is much lower than more urban centres.

Our strategy has been to minimize our lowest recurring cost (housing) by buying an inexpensive home with no mortgage and using the strategies mentioned above for dealing with the fact that our monthly bills are a little higher.

Guest's picture

You claim that cost of living is a myth but ... all of the tips you gave assume that it is in fact not a myth. You also assume that I want to/can/would be happy living with less house/educational choices/food choices.

New Jersey has some of the best schools in the United States especially in my area. I had thought about moving to San Diego but a similarly sized three bedroom town home would cost twice as much, the schools are poorly ranked, and our family lives on the east coast. Moving would mean moving into a one bedroom apartment or a 2 bedroom home in a crappy neighbourhood and expensive plane tickets back to the east coast to visit family.

Cost of living is not a myth. Unless living for you means nothing more than having food, water and shelter.

Guest's picture

You can talk about how to deal with a change in the local cost of living, but it hardly makes sense to call it a myth. It does make a great deal of sense to find out before one moves what things cost in a new area. I know far too many people that moved to take a new job, seemingly for a great deal better pay than they had in their old location, only to discover that the cost of living difference ate up the pay difference and then some, leaving them with a lower standard of living.

Guest's picture

@Khurt, @Lorenzo, @vga
I just wanted to clarify one thing:
This post does not claim that cost of living is a myth. The post does claim that there is a "cost of living myth". While that is a fine distinction it is also an extremely important one.

This is the cost of living myth (as quoted from my article):

I did not claim that there is no such thing as a cost of living. Nor did I claim that cost of living is a myth.

The reality is that most people go to a website to find out how much it will cost them to live in a specific city. They take those numbers as absolute truth. However, I believe if someone wants to move to a specific city, if they are willing to make lifestyle adjustments the cost of living impact can be minimized by reducing expenses - not just increasing income. In fact, I more than believe this. I've implemented it in over a half dozen moves. (see also NMPatrica's comment above).

Nora Dunn's picture
Nora Dunn

Hi Craig - great article! (It's nice to see another Wise Bread writer in the southern hemisphere, much less the fact that we're neighbours in a global sense - I'm currently in Australia).

Anyway, I too have managed to move to and live in places with a high cost of living, and have made similar adjustments. My time living in Hawaii is a perfect example of being in a place with an extremely high cost of living, but not sacrificing much to live the life I wanted to live, in a place that fed me with inspiration (and warm weather)!

Jabulani Leffall's picture

I was going to do a similar post, which I still might do because of this. You're right you can cut back and increase standards of living and come close to parody. But really, I lived in Los Angeles, NYC, Chicago, Kansas City, New Mexico and the DMV Mid-Atlantic area. While I agree with the attitude aspect of changing thinking...... I have to disagree with the premise.

Your $400,000 for a house in Compton, CA plus your auto insurance, state property tax, gas prices is nowhere on earth near what you get for a $107,000 house by a lake in Las Cruces New Mexico. You can stop going to starbucks all you want and buying slurpees California is as twice as expensive across the board, even if you stay in the house and do nothing.

Let's talk rent now.

For 800 bucks per month (rent or mortgage) in Kansas City you can get up and jog across the street and wave to your neighbors who live in Mansions, live in a townhouse complete with Washer Dryer, Convexion oven etc. etc.

In New York, Brooklyn, Queens or Manhattan the same sort of set up is probably between $2,500 to $5,000.

Add your grocery bill and entertainment expenses and you're losing each and everytime. Look out for that post.

Jabulani Leffall

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