Living in an expensive coastal metro area and feeling like giving your kids the classic middle-class American lifestyle will always be out of reach? This post might be for you. It’s my personal story.
The introduction of kids to a marriage really brings the financial issues to the forefront. For us, it was really baby number 2 (Olivia) that forced us to take a deeper look at our life, our long-term financial plan, our values, and come to terms with what we were and were not willing to compromise on when she arrived.
At 30 years old, my wife and I lived in Marin County, an expensive suburb on the north side of the Golden Gate Bridge in the San Francisco Bay Area.
We both had pretty good jobs, definitely not minting money, but by any normal metric (besides the bay area maybe) we were doing incredibly well financially. Two 6 figure incomes, benefits, and some semblance of work-life balance. Our first daughter (Isla) was in a great daycare and we lived in a small 1,000 sq ft condo. It was literally the cheapest place on the market in our zip code when we bought it.
Then, we got news of Olivia. We were super excited as we always wanted two kids, and the thought of our first daughter having a sister to be her best friend for life really made us feel like we were about to have a complete family. We were on cloud 9.
Then, reality sunk in.
- Two kids in daycare… $4,200/mo after tax. That just ate up around $75,000 of pre-tax salary.
- Two kids and two adults in a 1,000 sq foot condo, not ideal.
- How would we buy or rent a bigger place on either (A) two incomes but with $4,200/mo in childcare, or (B) one income, with no childcare costs?
If we were to stay in the Bay Area, the answer was to move farther away from the city. This would entail at least an hour commute to San Francisco in traffic each way. Then we got thinking… do we really want to do that? Commit ourselves to a $750k mortgage, HUGE property taxes, and both of us working 40+ hour/week jobs just to net a grand or so more per month and barely see our kids?
Luckily, as a Certified Financial Planner™ professional, I didn’t have the impulse a lot of people probably have… to feel alone and sorry for myself in this struggle. I was fortunate to not feel like there was something wrong with me because I would talk to new parents all the time who were in EXACTLY the same boat. The only difference? Most of them decided or felt forced to go with option A above. Keep two jobs, two kids in daycare, get a bigger mortgage, and scrape buy putting every spare dollar into housing costs and childcare.
Let’s go back. Was I willing to compromise on all this? Was my wife? Nope. This was not a life we were willing to live just to stay in the bay area. Numerous couples I work with in big coastal cities (SF, LA, New York, Boston, etc.) seem to default to, “I couldn’t possibly leave” or “but this is where my friends are” or “this is where my job is.” In other words, where they live is the center of the universe.
We moved to Boise, Idaho 18 months ago. At first, the responses we got from most people were typically the same: “Idaho… really? What’s in Idaho?” “What do people do there?” “Isn’t the weather like Siberia?”. Classic examples of the above mentality. That these insanely expensive coastal metro cities are the only place we can live. They are the center of the universe.
Here’s the case study… The wake-up call for those folks.
· We live in a real family house a mile from the center of downtown Boise. It was about half as much as a shoe-box in the bay area anywhere close to the city.
· We are able to live on one income AND save money.
· Our childcare is about 60% of what it was.
· Our food and dining out costs, the same kind of reduction.
· Utilities were cheaper despite the warmer summers and colder winters.
· Property taxes? The rates were lower and were assessed on much lower values. HUGE savings.
· State Income taxes? About 3% lower on every dollar we make.
· Home repair services like plumbers, electricians, etc? At least 30% less/hr.
· Car registration was about half.
The best part about it? We didn’t feel like we sacrificed on our quality of life. Really, it’s insanely better than it was because we dropped all of the financial pressures.
· We feel healthier
· I feel less guilty about taking time off to spend time with my kids because I know I’ll be okay if I don’t make $300k this year. Something that seemed like the bare minimum to feel “okay” in Marin County.
· We are meeting loads of new parents – many who are also recently relocated and are in search of new friends.
· My office is a 5 minute bike ride away instead of a 45 minute gas guzzling commute.
I’m not saying relocating is a silver bullet, but if you haven’t considered it, start.
Your impulse might otherwise be to have a pity party for yourself. It’s not fair, I deserve to be happy where I am. I deserve vacations, cars, a nice house, a short commute, etc. I don’t want to have to make new friends in a new place. The truth is, throughout history, families have had to relocate to afford raising a family or to live a better life. I mean, we are “THE OREGON TRAIL” video game playing generation. You’d think we would get that relocating is a normal part of life for many people, but somehow most people don’t.
Relocating won’t always work for your circumstances and eventually it’s important for most families to put down roots.. Dependent parents, siblings, niche type jobs, etc. might chain you to a specific city. But, if you are worried, here’s my pep talk:
· Think you won’t ever make friends again? You will.
· Will your kids be emotionally damaged by the move? No. Kids are super adaptable and if they aren’t, that’s probably something to work on with them.
· Will you like your new location as much as before? Sure, there will be pros and cons, but financial freedom is worth its weight in gold and can make up for a lot of other perceived sacrifices. I didn’t appreciate this enough, even as someone who could run the #s and see ahead how much more secure we would be financially when we moved.
· Have some faith in yourself and realize that you are not alone. Employers are aware of these struggles too. Consider remote work options, occasionally traveling back and forth, or looking at new jobs in other cities… life will go on, and probably, it will get better.
