When I was little, I devoured the Little House on the Prairie series. I felt bad then for Ma and Pa. I felt bad for the way they struggled financially, facing setback after setback. I felt bad that they always had to move just as soon as they were settled.
But then I read the books again as an adult. Then I read them one more time to my daughters. Now I realize, as much as Pa was a loving father, he was responsible for a lot of his family’s financial hardships.
Life in Wisconsin was good for them. But once Pa got the itch to go west, his family never had a stable environment. They never got more than a few years into getting settled and making a life for themselves before they moved again.
Does Moving Now Cause the Same Financial Difficulties?
Most people would argue that life was different then, and moving around now doesn’t cause as much financial hardship, but as someone who recently completed a 2,000 mile move, I would disagree.
My husband and I had lived in Chicago for 14 years before we made the move last July to Tucson, Arizona. We went for my husband’s work and because the move would give us a lower cost of living and a pay raise for my husband. On paper, everything looked good.
We foolishly thought we’d stay for two to four years. Now, I’m not sure we should move so soon if we want to prosper financially.
Even though my husband’s employer paid for the move, we still had many expenses like setting up the utilities and paying deposits on them, buying a few new pieces of furniture, etc.
Breaking Even and Getting Ahead Takes Years
We bought a house when we moved here, knowing that we weren’t sure how long we’d stay. We’ve had our mortgage for 15 months now, and in that time, we’ve paid down $4,300 on principal. Our home has increased just $1,100 in value during that time. That gives us a cushion of about $5,400, but I’m guessing if we were to sell our house next year (which would be two years that we’ve lived here), we’d be losing money thanks to realtor fees.
We’ve also just reached the point where we’ve started to discover ways to save money in our new city. Now I know where the cheapest places are to buy groceries, secondhand clothes, etc. Our first few months here we spent much more than we normally do on groceries because I didn’t know which stores offered the best deals.
We also have finally found decent doctors and dentists. Our first few months here, we found out my daughter need 6(!) cavities filled. We had to go to four different dentists before we found one that we liked and could trust. All of those different visits cost us a little less than $200 out of pocket, and that was before her cavities were even filled.
Of course, I’m not saying never to move. In our case, the decrease in cost of living and my husband’s raise made it possible for us to own a house, which we couldn’t afford to do during our 14 years living in Chicago. However, the whole story isn’t just on paper. When you move, there are many incidentals that add up. Moving repeatedly can cause you to struggle financially.
It’s no surprise to me that the only time in life when Pa and Ma flourished financially was after Ma put her foot down and refused to move from DeSmet, North Dakota. Without the constant moves, they could finally get established and become comfortable financially.
How often do you move? Do you agree that frequent moves are detrimental to your finances?
Graduate school loans have an equally minor effect on homeownership. Obtaining a masters, medical, law or doctorate degree actually insulates you from the adverse effect of student debt when you buy. The probability of homeownership is highest for individuals with a doctorate and no student debt; they have an 87 percent chance of owning homes. That likelihood only drops to 84 percent if the individual incurred $50,000 of student loans obtaining the doctorate. At the master’s degree level the probability falls from 80 percent if you have no debt, versus 75 percent with $50,000 in student loan debt. Getting an advanced degree increases your overall likelihood of owning a home, despite the small negative impact student loans have on your probability of homeownership.