Unlike Crystal who still lives in Texas, I left the state right after college (gig 'em Aggies!) for graduate school in Pittsburgh, PA. At the time, I thought Pittsburgh was outrageously expensive (and it was – compared to College Station!) but since moving to the DC area, I've learned what it really means to live in a high cost of living area. Here is how to keep it as cheap as possible.
One advantage to living in a high cost of living area is that there are a lot of housing opportunities without owning a house. Saving up just the down payment for a house can be daunting when an “average” house sells for half a million dollars, so everyone else rents as well. However we do still want to be invested in real estate via a combination of owning our own property and crowdfunding investments. In fact we found Realty Mogul reviews helpful in making this choice.
Renting with friends is one of the best options for housing – the more people you have sharing the cost, the less expensive it’s going to be – whether renting or mortgaging a house. You probably shared a place with people in college. It’s not so bad, and it can provide built-in entertainment value if you have the right roomies. If you don’t have friends in the area, there are many services that will help you find a roommate you can live with.
Most high cost of living areas also have their flashy and very high cost areas where it’s deemed most desirable to live, and the not so flashy areas, but still decent, and less expensive. Depending on where you are in life, you might even consider an area in the process of “gentrification” to save some cash.
There are many areas to choose from in a city, both close to and far from work – which leads to:
Almost all high cost of living areas are big metro areas – with good public transportation. Use it. These are the same areas where you have to rent/buy a parking spot for your car or motorcycle to live in addition to a place for you to live – adding up to more $$. Almost all cities also have trains or buses that go out to the suburbs, which tend to have less pricier living arrangements than “downtown”. Whether the length (and cost) of the commute is worth it is your call.
Ditch your car and take public transit – or move your two legs and walk or ride a bike. Venues, offices, and apartments are usually pretty dense, making a walk or ride perfectly reasonable. Stop paying for a parking spot both at home and at work, car and full coverage motorcycle insurance, and gas (which also tends to be higher in cities). It could easily save you an extra $200-300/month, even after you’ve paid for a public transit pass.
On a side note, larger metro areas have more craigslist posts, so more opportunities to find that bike for less.
Food is one of the unfortunate expenses of living in a city; the cost of shipping it in can raise the prices beyond what you’re willing to pay. And don’t get me started on restaurant prices. First, learn to cook if you don’t already know how, you’ll save yourself a lot of money just by cooking your own food. Find the local ethnic stores for good quality, but inexpensive ingredients – each market will have it’s own specialty. If there’s a farmers’ market that comes to town, research their prices before you buy. In many big cities, these can be more expensive than the grocer down the street. If you feel strongly about buying produce and meats from a local farmer, splurge if you can afford it – it’s a choice.
Eating out is usually prohibitively expensive, unless you go to fast food places that have uniform prices across the country. They also usually have uniformly bad food. Watch for “restaurant weeks”, which provide a prix fixe menu – just don’t spend that savings on drinks!
Major metro areas are full of free and cheap entertainment options. Living in the DC area, I’m very spoiled by the Smithsonian – free museums all the time – but you should check with your local museums for free days, or reduced fares for locals.
Theaters (opera, musical, symphony, etc.) sometimes have “rush” tickets where you can get whatever seats are left an hour before the show for a (very) reduced fee. So do major sports leagues. Sure, they’re usually nosebleed seats, but you can still see the show or game – bring binoculars. Ask at any venue that has seats left, they’re usually happy to sell the remaining seats at a reduced price rather than not sell them at all – work on your negotiating skills at the same time.
Find your local free paper that tells you where the free entertainment is. Look through it and pick and choose what you like. The Washington Post Express here in DC has a going out guide, which covers free and inexpensive options for each weekend.
And if you’re the drinking type – skip the bar, go to the local liquor store and invite some friends over – it’ll be about 20 times less expensive, especially if friends chip in. And without the car, you don’t have to worry about drinking and driving.
While it's unlikely that you'll pay off your mortgage in 6 years like Crystal, you can still enjoy living in such an area on a relatively low salary. And refinancing home loan rates will make that even more doable if the rates have come down low enough. When I first moved to the DC metro area, I was making 45k as a single person, and I managed to save up a 10% down payment on a 250k townhouse on that salary. Doing so involves a lot of tradeoffs, but there’s a reason you live in the area in the first place, right?