Beating Broke

Personal Finance from the Broke Perspective

Would You Consider Moving to Improve Your Standard of Living?

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Last July, our family moved from the near suburbs of Chicago to the suburbs of Tucson, Arizona.  We knew that there would be some significant changes to get used to, like the change in weather, but honestly, we weren’t sure how our lives would change.

Had my husband not been offered a job in Tucson, we never would have considered moving so far away from family and friends.  However, making this move turned out to be a wonderful decision.

Even though my husband is only making $2,000 more than he was making in Chicago, our quality of life has improved tremendously.

Benefits of Moving to Tucson

Moving improve Standard of Living
Original img credit: pbarry on Flickr

We can own a house.  In the near suburbs of Chicago where we lived, a house, even a fixer-upper, cost at least $300,000.  Then, there were the property taxes to consider, which ran $10,000 to $25,000 a YEAR depending on the neighborhood you live in.  In Tucson, we got a very nice house for less than $200,000, and our taxes are only $2,000 a year.

Our kids have room to play.  Even though we lived in the suburbs of Chicago, the population is so dense that the houses all have very small yards.  Plus, the house that we rented backed up to an alley, so I never dared leave the kids outside alone.  Now, we have a large backyard with a cement fence around it.  I can see the kids outside playing while I’m in the kitchen preparing food.  We love this feature of our new home.

Money stretches so much further in Tucson.  Although it’s a challenge, in Tucson, I have a grocery limit of $125 a week.  There is absolutely no way I could have such a low grocery bill in Chicago.  It simply was not possible.  Gas here is much cheaper, too.

The environment is so much quieter and friendlier.  In Chicago, many people were just, well, grouchy.  (Not all of them, but certainly enough of them.)  We lived in a middle class suburb, and we had some sketchy characters in our neighborhood like a woman who lived down the alley and routinely dug through everyone’s trash.  (I’m not making that up!)  There was also so much noise from the nearby fire station, trains, and constant traffic.  In Tucson, our neighbors are very friendly, there is no one sketchy (that we’ve met so far), and it’s much, much quieter here.

Drawbacks to Our Move

We’re far away from family and friends.  Most of them live in the Midwest, so we are far, far from family and friends.  That is a challenge.  If we move back to the Midwest, it will be because we want to be closer to family and friends.

Everything is so far away.  In Chicago, I was very spoiled.  I had three grocery stores within a two mile drive.  Our dentist and doctor were each less than 4 miles away.  In Tucson, everything is 10 or more miles away.  We have to drive a half an hour to get to our dentist.  Driving so much can take up a large part of our time.

I never would have considered moving to improve our standard of living, but now that we’ve done so, I can see what a great move it was for our family.  Our quality of life has improved dramatically, and this move is giving us a chance to improve our financial situation.

Would you, or have you, moved far away to improve your standard of living and financial situation?  Or is this something you would not consider?

How to Find the Best Financial Planner for You

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My husband and I were on the hunt for a financial planner for years.  We started out using one at our local credit union, but that one seemed to talk (and talk, and talk) more than he liked to invest.  Every time we saw him, the visit would last well over an hour as he chatted about everything under the sun, except investing.  When our investments with him remained stagnant over a two year period, we decided to move on.

Over several years, we interviewed several different financial planners and received either terrible advice (like investing all of our rollover retirement money in an annuity despite our relative youth) or didn’t feel comfortable with the planner.  Finally, last summer, we found a financial planner who gave his advice based on our unique situation and the goals that we have.  All our hard work searching for a planner finally paid off!

If you’re searching for a good financial planner, here are some things you might want to ask yourself:

Best financial plannerDoes the planner come recommended? Stumbling upon a good financial advisor independently may be possible, but our planner came highly recommended from several people in our neighborhood.  In fact, one had been working with him for over 10 years!

Does the planner give advice based on your own financial situation? Some planners have stock and trade investment advice that they never deviate from regardless of your situation.  (Think of how Dave Ramsey always gives the same advice regardless of the caller’s unique situation.)

Ironically, one thing that made us go with our current financial advisor is that he disregarded the traditional advice that one should NEVER take money out of a retirement account to pay off debt.  Because we couldn’t seem to get out from under our debt no matter how gazelle intense we were, our advisor recommended that we pull out enough to pay off the debt in full.

Doing so was scary, but he was right–the tax implications were not as terrible as we had thought and being free of that debt gave us energy and confidence to achieve our financial goals including adding to our retirement every month and creating a good size emergency fund.

Is the financial advisor a teacher? Of course, I don’t mean teacher in the traditional sense, but does he take the time to explain why he is recommending specific actions?  Does he want you to understand basic investments so you feel more comfortable with his advice?

Our first planner never did this, and we were quite clueless about why he made the financial investments he did.  Our current planner will take the time to explain, and if necessary, explain again until we understand why he is suggesting the investments he is suggesting.

What are the planner’s credentials? Every planner should have some initials after his or her name.  Look these up on the web to see what obtaining them entails.  CNN Money suggests, “The ones you want to look for are the ones that take a significant amount of time and expertise to master before the designation is awarded.  These include the CFP (certified financial planner), the PFS (personal financial specialist) and the CFA (chartered financial analyst).”

How is the planner paid? There are several ways planners can be paid, but in general, be cautious with those who are paid on commission based on what products they sell to you.  While there are honest planners paid on commission that care about you and your interests, many are interested in selling the product with the fattest commission regardless of whether that product benefits you or not.

Do you use a financial planner?  If so, what criteria did you use to find the planner?

The 1,700 Mile Move: 5 Lessons I Learned

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I come from a family of non-movers. For example, my mom, once she married, became listless and lost her appetite and quite a bit of weight.  The doctor diagnosed her with homesickness.  She had moved less than five miles from her family home to her home with my dad.  (Yes, this is a true story!)

We moved one other time less than a 1/2 mile away, and even that was traumatic for her.

I have ventured farther in my lifetime, going 400 miles away to graduate school, but a 1,700 mile move is something else entirely.

While long distance moving companies can help ease the process, here’s what I’ve learned so far as we prepare to move from the Midwest to the Desert Southwest:

1700 mile move
How do you estimate costs for a long distance move?

1.  We had way more “stuff” than I thought.  I knew we had a lot,
but wow, I didn’t know how much.  We’ve sold, thrown away, or donated at least half of our stuff.  Every time we think we’re almost done packing, more “stuff” seems to appear.  I wonder if we’ll ever be done!

2.  Plan for a long-distance move as early as possible.  We started selling our stuff back in early May, and so far, that stuff has brought in over $1,000.  However, even though I started selling items 8 weeks in advance of our move, it still wasn’t early enough.  We’re less than 5 days away from our move, and I am still waiting for our treadmill, file cabinet, and office desk to sell.

I was surprised to see that sometimes listing things to sell on eBay, Facebook, and Craigslist is like planting seeds.  I’ve listed some things, and there was no interest.  But then, say two or three weeks after I listed them, someone discovers the listing and buys the item.  Allowing enough time for things to sell is essential.

3.  Exercise equipment has no resale value.  Many people want to buy exercise equipment, but selling that equipment later is difficult.  Luckily, I bought our treadmill second hand for less than $100 a few years ago.  I don’t think it’s going to sell before we leave.  I think I’ll be taking it out for trash pick up.

4.  Moving 1,700 miles is expensive!  Luckily, my husband’s employer is paying for our move.  Still, even though we’ve seriously pared down our belongings, the move is going to cost over $6,000!  (We’ve paired down so much that the mover estimated two other families’ household goods could fit on the semi-truck with our small load.)

If my husband’s new employer wasn’t paying, I think the smartest financial decision would be to sell everything before we move and buy used once we’re in our new location.

5.  Determining the cost of living in a new location isn’t easy.  Since Tucson, Arizona (where we’re going) has a lower cost of living than Chicago, Illinois (where we’re leaving) and my husband received a substantial raise with his new employer, we thought we’d be in a better position financially.  That’s before we looked at the new company’s health insurance plan and saw how much worse it is than our current plan.  Most of my husband’s raise is going to cover the difference in the cost of insurance.

Have you moved a thousand or more miles away?  If so, what lessons did you learn?