Cutting Expenses By Moving To A Cheaper State
I did my medical school and residency training in Los Angeles and at that time the cheapest apartment I could find in a good neighborhood was $299,000 for about 330 sq-ft of space. I ended up buying a fixer upper condo in San Diego for $288,000 while still in residency. Over 2 years I fixed it up and decided to move to SD for a job.
Living Large In San Diego, Ca
In those first few years (2009) I was living large. Spending in the $8,000-9,000 range a month and going further into credit card debt. I also had no clue that with the payments I was making on my student loans I wasn’t even paying down the principal, matter of fact the principal was going up.
Sometime in 2012 I realized that this wasn’t going to be a sustainable lifestyle. I had gotten married (and soon divorced) by that time as well. My poor wife all of a sudden had to deal with a partner who wanted to go from one extreme to the other. I sold my car, bought a $1,000 beater Honda CRX, outfitted my mountain bike in order to commute to work with it. I stopped buying new clothes, started contributing to my 401(k) and other retirement accounts. I still had to make up for cashing out my 401(k) (twice) and taking a loan out against it another time.
Sold My Condo – Started Paying Cheap Rent
It wasn’t until 2013 that I got my excrement together. I moved into a very beautiful apartment in a great part of SD paying around $900/mo for approximately 200 sq-ft of space. I was cooking a little at home but eating out mostly. I still loved trying new restaurants and enjoying occasional cocktails with friends. I brought my expenses down to the $4,000/mo range.
I tried hard to further decrease my expenses and what ended up happening is I would pick up more shifts at work and try to make more money instead. This is a classic mistake. Even though I was increasing my income, the extra work and the extra stress and a subtle sense of entitlement would actually increase my spending. This would lead to guilt which I punished myself for by picking up more shifts. This lead to my highest income so far in 2014 of nearly $420k.
OK, finally, back to the topic of moving to a cheaper state. In 2014 I followed a colleague’s lead and decided to give Portland, Oregon a try. I knew housing wasn’t terribly cheap there and state income taxes were nearly identical to Cali’s. However, even with only 2 visits to that city, I recognized that everyone lived much simpler. People were nicer, very few were sporting designer attire, fancy cars were near impossible to spot and food was cheaper. Also, public transportation was incredible.
Dropped My Expenses by 50% – Found Even Cheaper Rent
Now, it has been nearly a year since I moved here. I was able to give up my car, find an apartment for $740 per month, cut my monthly expenses down to around $2,000 and enjoy a much higher quality of life. The weather here is clean and fresh. People here are incredibly nice and they enjoy doing simple things. I meet up with friends in jeans for a $4 beer, we go watch a free concern at the park, we go bouldering at a gym and throw a frisbee at the park.
There are downsides to Portland as well. If you sit outside a cafe to enjoy the fresh air you are guaranteed to be bombarded with tobacco smoke. There are a ton of cars for such a small city so there is not only traffic everywhere but people drive a lot of trucks here and combined with the commercial trucks the smell of diesel can become somewhat nauseating when you don’t have a cabin filter on your bicycle to filter that out.
So, even though the pay here is a lower than in California, the quality of living is not even comparable. People are nicer which means my patients are nicer. I think there is a perfect state for everyone, I have found mine for now. The ideal state in my opinion will have a less pretentious population, high walking scores, cheap local food and of course great public transportation. Ideally it would also have lower state income taxes but the state with maybe even 0% income tax may have higher property taxes, worse infrastructure and higher sales taxes.
Have you thought about moving to a cheaper state?
What is holding you back from making the move?