Many individuals today are struggling with high expenses and may be having trouble making ends meet. For some, it is a regular battle each month to find funds available to pay all of the bills that pile up in a mailbox. Others may be falling farther behind each month because their spending exceeds their take-home income. If you can relate to these financial challenges, it may have crossed your mind that your city may simply be too expensive for you to live in. Before you contemplate relocating to a different city, it is important to analyze a few points to determine just how expensive your city really is.
The Cost of Living Index
There are numerous online resources that you can use to research your cost of living in your specific city or town. Generally, the cost of living index is available for smaller and midsized markets across the United States, and some sources have them available for areas outside of the country. Your cost of living relates to everything from the average price of real estate to the cost of utilities, food, clothes and other necessities. It also takes into account the average income for individuals in the area. If you live in a larger or mid-sized community, you may consider using a cost of living calculator online to determine what your city's cost of living is. Keep in mind that there are some comparison sites that enable you to compare the cost of living in your area to that in another area. This can help you to determine if you may feasibly be able to reduce your overall expenses by relocating to a different area.
Geographic Factors That Can Influence Your True Cost of Living
While the cost of living index can be educational and informative, it should not be your sole source of information to rely on if you are seriously contemplating moving. The fact is that the cost of living within a specific metropolitan area can vary widely. For example, consider how much more expensive it may be to live in a high-rise condo in the downtown area in comparison to an affordable suburb in an outlying area that is still included as part of the metropolitan area. The price of real estate between different neighboring communities just a mile or two apart can also be drastically different. Therefore, while the cost of living index can be informative, the actual living expenses for your area may need to be analyzed more carefully.
A Word About Your Profession
Before you make a decision to relocate to a new area, you should also think about your profession. The cost of living index takes into account the average income for those living in the area, but the average income for professionals in your field may be skewed from the general city average For example, if you are a healthcare working based in an area where your services are in high demand, you may generally expect to have a higher earning potential in your area in comparison to the cost of living than in other areas where there are many skilled professionals working in your field. In addition, in some markets, there may be limited need for those with your educational background. For example, oil and gas workers may have an easier time finding work along the Gulf Coast than in an area like Arizona or Maine. When you do compare the cost of living index between two cities, it is important to compare the average salary of workers in your field and to consider the availability of employment opportunities in the area.
Should You Relocate?
The decision to relocate due to financial reasons is a personal one, and it is not a decision that can be made solely on cost of living comparisons. You may need to conduct more extensive research about affordable housing options in an area that you are interested in relocating to. Research job opportunities for yourself as well as your spouse if you are married. You may also think about other factors that can influence quality of life, such as quality of schools, crime rate, how long your commute would be and other factors. You can create a working budget for your family if you were to stay in your area versus relocate to determine if you would save money. In addition, estimate your moving expenses, including those related to selling your home, deposits or a down payment on a new home and movers' services. Consider if the savings that you would enjoy by relocating would offset the costs associated with moving.
Alternatives to Relocation
Relocating makes sense for many people, but it is not the right financial move for everyone. The fact is that you may not be able to earn as much money if you relocate to another area, or the cost of moving may not be worth paying. If you need to remain in your local area to take advantage of local employment opportunities, you may consider relocating to a different neighbor or community in your metropolitan area. There may be more affordable housing solutions with cheaper property taxes, utilities and more in other communities. If you need to remain in your current home, you may consider different ways that you can reduce your current expenses. This may include eliminating cable TV, switching cell phone providers, refinancing your mortgage or car loan, consolidating your credit card debt or making your home more energy efficient. You may also make lifestyle adjustments, such as avoiding restaurants and eating at home instead or carpooling to work with a group of friends who work in the same vicinity. Each of these ideas can help you to save money, but you will need to find the solution that is right for you.
Financial challenges can be tough to deal with. It can be stressful to discover that you have a cash shortage for even one month or pay period, but when this problem persists on an on-going basis, you may realize that you need to make some changes to your life. Reviewing the cost of living index and researching the cost of living in other areas can he helpful to you. In addition, comparing living expenses if you were to move to a neighboring community that is more affordable can also be helpful. Whether you choose to relocate or not, you may also think about different ways that you can trim your personal living expenses so that your budget is more manageable based on your take-home income. Each of these ideas can help you to take better control over your financial situation so that you do not regularly fall short with your budget.
