Why a Lower Cost of Living Matters

When I quit my day job, I moved from the big city of Chicago to Des Moines, IA. There were a number of reasons, but one was the lower cost of living. People have argued back, “Yeah, you’re spending less per month, but you’re living in Des Moines!” While Des Moines isn’t Chicago, it’s similar enough. It has culture, art, technology, friendly people, and a downtown full of events. It even comes complete with disappointed Cubs fans.

With a lower cost of living, I was hoping to make my savings last longer, giving me more time to make my game development company successful before worrying about other funding sources, including another day job.

Now, saying that there is a lower cost of living is one thing, but when you’re living it day to day, you might not notice it as much. Granted, buying a beer at the bar is definitely cheaper here than in any bar in Chicago, but I don’t drink that often. And it’s hard to see how my grocery bill is any different, especially since I don’t buy things like meat, cheese, milk, and butter. I buy fresh fruits and vegetables, which means I don’t get to take advantage of coupons and savings as people on a standard diet might.

But recently I saw that my latest credit card statement is out, and my latest bill was half of the bill from the previous month! Of course, I had a lot of moving expenses then, so maybe it wasn’t a good month to check against. So I checked my GnuCash reports, and I created an expense bar chart from January 1st, 2008 until the end of this month. Here is the result:

See that little blue box? It identifies the bar representing the expenses for this last month, and as you can see, that bar is much shorter than any of the months from the previous two years.

Is that spending level sustainable? I don’t know. This last month, I spent most of my time getting settled in, looking into health insurance and business checking accounts, rolling over my 401(k) into an IRA, and getting my office in order. I ate lunch at home most of the time, rarely went out, and if I did, most likely someone else was treating me to meals. I don’t think this month will be typical for me, especially once I start spending money for game development, specifically on contractors.

Still, this past month means I’ve extended my estimated burn rate by half of a month, and I don’t anticipate my regular expenses, such as groceries, utilities, and rent, changing that much. Some of my bigger purchases were a new laptop battery and a laptop riser, and so I don’t anticipate needing to spend that money again anytime soon. Basically, if I can avoid spending money on new things I don’t need, I can expect to see lower monthly expenses regularly.

Can I mend clothes instead of throwing them away when they get holes in them? Can I go to the library and check out books instead of buying them? Can I prepare more interesting meals at home than I can find in restaurants?

Other questions are a bit harder. Can I hold off on getting a new smartphone? Considering the capabilities of my current phone, I might get a lot more out of my monthly bill if I had a pocket computer. Being able to see my calendar and docs on my phone when I’m away from home would be awesome. How about a Roomba, or one of those litter boxes that cleans itself? These aren’t just expenses. They’re improvements to standard of living. The deal I’m making with myself, however, is that I need to earn the money to pay for these things before I pay for them.

But getting back to what this post is about, the lower cost of living is allowing me to think about these things. Seeing that smaller expense bar makes me feel better about my current lack of income.

I’m not the only one to find moving to be a good way to save money. Many indies have moved not only to less expensive cities but also to less expensive nations! Living in certain Asian cities, for example, you’d find that your money lasts way longer.

Have you considered moving to reduce your expenses? Would a different suburb, city, state, or country be a possibility for you?

(Photo: Sales, solden soldes…. by antwerpenR | CC-BY-2.0)