Raising stakes: Relocating to save money can be like getting a raise in salary
Sarah Sloboda, Copyright 2013 Sarah Sloboda sarahsloboda.com
Sarah Sloboda and her husband are making about $10,000 less a year than in 2011 and are living larger than ever.
It started back in 2002, when Sloboda, fresh out of studying film at the University of Michigan, moved to New York to follow her dream.
"The inspiration of the people you are surrounded with (in New York) is just incredibly inspiring," Sloboda says. "For the time I was there, it was priceless. I would have paid anything to live there."
But that was a decade ago.
Sloboda reached a point where she says she didn't need to be constantly inspired. "I had a lot of ideas where I needed the time and the quiet and a slower pace to move through and actually do something with," she says. "At that point, all the energy of New York became a hindrance."
She married a lawyer in May 2011 and by July they moved to Cleveland.
As people like Sloboda look at their finances and the current economy, a lot of factors come into play. Sloboda's husband, for instance, just wasn't having luck finding a corporate law gig in New York — partly because of the economy and partly because a lot of people want to work as lawyers in New York.
The financial part of the equation can be huge. It may sound awesome to be offered a six-figure income in, say, San Jose, Calif. — until you plug the figures into an online cost-of-living calculator like the one at bankrate.com or at money.cnn.com. To live at the same level in Austin, Texas, would only require a $60,000 salary — 40 percent less.
Of course, then you are living in Austin, which may or may not be a person's cup of tea.
Bryan Sudweeks, an associate teaching professor of finance at BYU, says he has a number of students who have multiple job offers they are considering. "You may have one offer in Richmond (Va.) and one in San Jose, and if you know what those two will pay, you can use a cost-of-living calculator online," he says. "We encourage students to take a look at those calculators and to get a sense for it."
Sudweeks cautions that a lot of these cost of living prices are only the estimated prices. But they are valuable for analysis, he says.
For Sloboda, the analysis included things like the amount of counter space she and her husband could afford. She rented an apartment on a top floor of an old Brooklyn brownstone back in 2007 for about $1,600 a month. She says it should have cost between $3,000 and $4,000 a month. Luckily the landlord, who lived in the brownstone, didn't seem to know this.
That was all for about 1 foot by 3 feet of counter space in a "tiny little kitchen."
It was a one-bedroom place with another room Sloboda used as an office that was the size of a walk-in closet.
The Bankrate cost-of-living calculator gives their move to Cleveland a 43.5 percent lower cost-of-living rating. So making $10,000 less a year was like getting a big raise.
Their new apartment is twice the size and costs $300 less a month in rent. "All brand new appliances," Sloboda says. "Three times the counter space. One and a half bathrooms. A full laundry room. Control over water heater and air temperature."
Her lawyer husband landed his corporate lawyer gig. What makes the move easier is Sloboda has family in Cleveland.
Claudia Rose, a real estate agent in Murrieta, Calif., and the author of "Relocating: How to Find the Best City to Call Home," says family is a huge thing to consider when relocating.