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How Our Finances Will Drastically Change Starting July 1.

OK, so what do you get when your expenses go down by quite a bit per month, but your wife stops working at the same time?

An interesting financial situation that you hope benefits you.

At this point in time, I am trying to figure out what our expenses will be starting July 1 in our new house in New Mexico, as they will be dropping by quite a bit. At the same time, however, my wife is going to unemployed for a bit as she contemplates what she wants to do once we arrive. She has been in touch with several schools and some other institutions she is interested in, but nothing is set in concrete yet. And while I am not worried about the long term loss of her income (it will only be short term), I do want to get a handle on what living in our new house is going to cost us. So far, I know we have the following major expenses each month:

Rent: $1,000 – This is down from $1,949, so a savings of $949 per month
Car Payment: $300 – Stays the same
Car Insurance: $97 – Down from $138, a savings of $41
Health Insurance: $210 – Although I have not firmed this up yet, I am hoping we can come in at this rate, about $110 less per month than we pay now. Of course, if my wife gets a job with benefits, that would be even better!
Cell Phones: $110 – Stays the same
Internet: $50 – This is about $11 more than I pay now, but I guess not bad considering we are moving somewhere so remote
Groceries: $400 – We checked out the natural food store in town, and the prices are about the same as we pay here
Student Loan: $117 – Stays the same

I could go on and on, including cable TV, phone, water, trash, gas, electric, etc etc, but I am not sure what the difference in pricing is going to be at this point – I am only just now getting them switched over to our name. But let’s concentrate on only the items in the list above:

$2,284 for those fixed expenses in our new house

VS

$3,373 for those same fixed expenses in our current apartment

That’s a savings of $1,089 per month just on those expenses. By my wife not working we will be losing about double that amount of income each month, but having this much of a reduction in expenses will certainly help to not strain our finances too much. And when she goes back to work, we should have much more money to both pay off her student loans and to save for retirement. Ah, the joys of moving somewhere less expensive that includes views like this:


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Comments (22)

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  1. Beautiful view.

    How long will it be before corporations in NYC, LA, Boston, Chicago, DC, San Fran, etc. realize that they can actually outsource jobs to the cheaper places or cities in this country (Pittsburgh, Cleveland, the entire state of Oklahoma, etc.). Why not let employees work remotely in a place that costs $12,000 less and pay the employee $6-8,000 less…it’s a win win.

  2. Makes me want to move to a cheaper area!

    I have read some of your previous articles regarding the move but do you think it is going to be a permanent stay?

  3. david says:

    @Chad – I think they are starting to, very slowly. But then again, they could move the entire company to those places and save even more money!

    @Luke – We are planning on it. You never know, but we are house hunting this year, and my wife plans on eventually opening her own small school. Once that happens, we are definitely there for the long haul.

  4. Not sure if you covered this but what difference percentage is there in the housing vs. where you live now and where you are moving to? Did that factor into your decision?

  5. david says:

    Percentage as in cost? Where I live now, a 2 bed/2 bath home on a postage stamp size lot is about $800K-$1.2m, easy. Where we are going, I can get the same house on 2 acres of land for $290-$330K. Not sure if that is what you meant, if not, let me know.

  6. $1,089 is quite an impressive saving. We are planning similar move soon too (from the Capital to a satellite town, but don’t expect to reach that figure. Will be interesting to hear if there’ll be other unexpected costs or advantages from your move

  7. Awesome. I hope you guys are very happy there. You are brave to move to the desert in the middle of summer!

  8. david says:

    It’s the high desert, so it is actually cooler there in the summer than it is here in L.A. 🙂

  9. david says:

    I will let you know Shark!

  10. That is a beautiful view! Looks too rural for me because as a single guy, I prefer the city life. I guess if I was married with children, I probably would want to move to a rural area too.

  11. david says:

    I agree SingleGuy – if I was single, not sure I would move here before I had gotten married!

  12. Mrs. Micah says:

    Cool stuff. It looks like a lovely area. I look forward to a reduction in cost of living when we move some day out of DC to somewhere in the country. And having a much prettier view! I miss living in PA.

  13. David,
    That is definitely what I meant. What will you miss most from your current area of residence?

  14. david says:

    @Mrs. Micah – Is that a long way off or a soon to be implemented plan?

    @Luke – I will miss the weather (although sunny 75 degree days every day does, in fact, get old after a while – trust me) and the beach. But I have lived near the beach for 36 years now and it is time for a change!

  15. @ Mrs. Micah – I miss PA, as well. DC is so much more expensive. Some nice rolling hills and tons of trees would be nice. Not to mention a nice house that costs $130k…at least that’s what it would be like near Pittsburgh.

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  18. Frugal Babe says:

    We live in a midrange housing market – our 1300 sq foot house is worth about 210K. I’ve often thought about moving out to a more remote location and buying a less expensive house, but we love where we live and neither of us really wants to move. But I still browse the real estate websites every now and then… 🙂 Enjoy your new place and the lower housing costs!

  19. david says:

    Thanks FB!!

  20. Linsey Knerl says:

    Congrats! Housing cost was the largest part of our savings plan when we moved to a rural area. That and being able to see the stars — it makes me happy!

  21. […] entirely new to me, is something we are certainly implementing right now yet again. Because of our move to a smaller, less expensive town and that fact that our income stayed the same when we did so, we were living high on the hog. Going […]

  22. […] than it is to make more money, especially in this economy. Over the last year since we moved here (which saved us a ton right away), I have really worked on cutting expenses in our house for two reasons – 1. I don’t like […]

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