Thursday, August 10, 2006

MEME: Would you move from the big city to the country in exchange for a 50% increase in income? - it's NOT cheaper - see bottom

I just read this posting at Jonathan's My Money Blog. He asks: Would you move to the boonies in exchange for a large increase in income -- he was offered 50% more. Here's the original posting and comments. The comments are well thought through and excellent! Also, checkout My Personal Finance Blog, Personal Finance Blogger just moved from Detroit to Peoria. He's at the beginning of the experience.

My family has made the leap. We moved from a major city to the rural South. We have a Walmart and a pathetic mall as well as a struggling to recover downtown. The nearest big city is about 1 hour away when there is no traffic.

If you're a big city person, it's really a tough bullet to bite.

Social adjustment is a shocker.

We've been fortunate. People in rural NC are very friendly. Although we haven't lived here for 20 years, they are kind and invite us to their homes. The biggest challenge is meeting compatible families and integrating socially.

Small rural communities have many social groups - some formal, most often church, the ruritans, shriners, freemasons, country clubs, etc... and others informal, such as playgroups, neighborhood picnics, golf buddies, hunting buddies, etc....

Having an active social life in the middle of nowhere really requires finding groups, joining and participating actively. Very independent people may find this quite distressing. The fact is the communities are very small. There is not enough population (think revenue volume) to support much commercial entertainment. Consequently, the social bonds are much tighter, but they take longer to sort out and integrate.

Most of the forms of entertainment we were accustomed to were highly commercialized: Chucky Cheeze, cafe's with live music, restaurants, museums, large public events, symphony, etc.... These really aren't conveniently available. Over time, we have found substitute activities, but it takes a long time to discover and adapt to alternatives.

Also, you might as well get used to driving an hour on highways (not much traffic) to get anywhere - things are spread apart. You adapt after a while.

Finding Groups

Finding groups can be a big issue. Especially if you're not a member of the dominant religious faith in the area (in NC think Southern Baptist). The real issue is NOT religion. Most people don't really care what religion you are, however, they they will ask you at your first meeting what church do you go to. I found it shocking, but it's more along the lines of "can I invite you to join our social/religious group" or "I haven't met you before, where do you hang out".

It really takes an effort - usually by joining a charity or community organization - to discover and understand the social map.

Peers

Another challenge - at least in rural NC - is that few people are highly educated. They may be quite intelligent, but are not necessarily educated. In addition, urban dwellers have had years of enculturation that is very different than rural enculturation. City folk are exposed to a much larger concentration of social trends, ideas and behaviours than rural folk - is just a question of population density. The internet is mitigating this significantly - but it's tangible.

If you are highly educated or have been involved in less common urban culture, you will probably find very few people with the same level of education or similar interests.

This can be a big issue in finding and making friends. Over time, you will find and meet the more educated folk, but it doesn't happen quickly - there are simply too few. If this is a priority, rural life may not be for you.

Entertainment

Prepare to drive an hour to find a multiplex cinema. Expect to attend small town theater and high school performances - these are big events. Opera, symphony and museums are also an hour away. Expect to travel.

Shopping

You'll learn two things:
1. How to buy alot more than you expected you could on line
2. You'll actually keep a shopping list and bring it on the weekly / bi-weekly / monthly shopping trip to the big city

Weekends

We usually drive 1 to 1 1/2 hours to the nearest city and spend most of the weekend there enjoying cultural events, restaurants and shopping. Occassionally we do things locally - it usually depends on whether social events are scheduled. Being a member of a local church makes a huge difference here. We are not members and therefore do not enjoy many of the traditionally scheduled social activities on Sundays.

Economics

IT'S NOT CHEAPER.
Living in the country is really NOT much cheaper.

You can buy a bigger house and more land, but...

Your other living expenses will be higher!

There is very little competition. Walmart is a blessing!
Groceries are more expensive.
Believe it or not, produce is MUCH more expensive!! Try to buy cheap avocados - you can't!
You spend ALOT more money on gasoline - everything is a 30 - 90 minute drive away.
Mail order may have cheaper prices, but shipping from multiple vendors erodes the advantage.
If one spouse gets a better job, the other spouse may in fact be disadvantaged professionally.
Professional services: lawyers, accountants, electricians, plumbers, etc... are not only rare and hard to schedule, they are often MORE expensive -- not competition.
Shopping - if you can't buy it at Walmart, you're driving back into the big city to buy it at the same prices you did in the past.
Education - many rural areas have very poor public schools - you're more than likely going to consider private schools - some have quite a commute and tuition.
Entertainment - you're travelling further to get it and may infact spend more due to the infrequency.
Vacations - you'll take many more vacations, but instead of going to the beach or country, you'll be vacationing in the big city to see the Christmas exchibits, Broadway Shows andThanksgiving parade. Guess what? City vacations are MUCH more expensive. Due to the lack of stimulation, you'll be a much more aggressive vacationer -- and much more willing to spend.

You may in fact be able to save more than you were in the big city -- at least one of you. My wife saves more of her income, I save less. I had a to make a decision: travel during the week and some weekends to big cities for work or earn less staying local. It was better for our family, though I'm not happy about the impact on my career. I'm now looking for an executive position within a 1 1/4 hour commute that pays well. Frankly, I may not find it.

Here's an interesting consideration. Our country home is worth about $500,000. It will appreciate fairly modestly. Our city home was worth about $900,000. It appreciated greatly even after we sold it - of course in today's slower market it will appreciate more slowly, too. My point is that over 10 - 20 years the city home will appreciate much more quickly and the wealth effect of that appreciation will be significant. Will I be able to sell my rural home and buy a comparable city home in 5 years? I'm really not sure.

This issue of appreciation may diminish the benefit of higher rural pay.

Have a wonderful day,
makingourway

5 comments:

Anonymous said...

Wow makingourway, you did a fantastic job summarizing rural living. I think some of your observations are regional in effect, however. I live in a rural area and find that cost of living is tremendously lower than my siblings who live in highly surburanized areas: electric, propane, cable, internet, groceries, and property taxes are all lower on my end. Also, I contend that your observation on education is regionalized as well. The rural community I live has outstanding public schools that routinely produce pre-med and pre-law high school graduates. Of course that is an anecdotal measure, but I know that our rural schools stack up with urban and surburban schools in every category (except sports!).

On the other side, your are dead-on-the-money with regards to home value appreciation. My home has appreciated all of 15-20% in the eight years I have lived there (that's 10-15% for eight years, NOT 10-15% per year -- I wish). My sister, on the other hand, purchased a condo in a highly surburbanized area of Chicago and her condo has gone up 30% in one year. I have resigned myself to the fact that I have (and am) missing out on the real estate boon.

Great article overall, I really enjoyed reading!

Andy

makingourway said...

Andy,

Great comments. Thanks so much for the thoughtful reply.

I think your point about regional differences is probably true.

In the South East our electric and propane are actually very expensive. We spend more on utilities here than we did in the big city.

In terms of groceries, I wish we had an Aldi or ethnic green grocer - both were much cheaper. And farm stand produce is actually more expensive than the super markets.

I've heard of midwestern rural areas that have great public schools. Unfortunately, the south has a history of very poor public schooling in it's rural areas. This is not just true for the Carolinas but also Virginia as well. When Thomas Jefferson, as governor of VA, was drafting his education program, he created the University of Virginia - a strong public university program. He saw no need to replace the system of private tutors that schooled the elite. He did imagine a european-like system that would push the elite up and the non-elite into trade schools, but never promoted it seriously.

Again, Andy, thanks for the great comments.

makingourway

finance girl said...

I second the wow, this is really eye opening stuff. Hubs and I are planning on moving east of the Cascades in about 10 years, and have thought of many of these factors but some of the other considerations you mention, we haven't thought of.

The most upsetting thing for us right now is how quickly land over there is going up in price.

Much faster rate than in the past.

Anonymous said...

Andy again here: Finance girl is right. Land where I live (midwest) is skyrocketing -- and I don't know why. Sure, I could speculate, but I don't have any real good reason. Two years ago, an acre of farmland went for about $2200/acre in my area. A nice houselot would set you back $5-$7.5k (w/o utilities). Now, an acre of ground is $3500; and that houselot cost has doubled. We've experienced zero growth (actually lost a few folks according to the census), and no new employers. Yet, land still goes up and up. I keep thinking 'it has to come down', but there doesn't seem to be any slowdown (yet).

Andy

Anonymous said...

Another minus for country/rural living: healthcare. If you live in a rural area you should expect to travel 1-2 hours for non-routine healthcare. This may not be a problem for you if you and your family are healthy. However, if someone in your family requires specialized care get ready to travel. Or, just move closer to the specialized healthcare provider.