How to Beat the High Cost of Living Area Trap


People talk about living in a High Cost of Living Area (HCOLA) as if it had been forced upon them by employment, family or some other constraint. I believe that getting trapped in an HCOLA is not inevitable. Here’s why I don’t think so – and how I think the trap can be avoided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Don't let a High Cost of Living Area trap you!

Don’t let a High Cost of Living Area trap you!

I have had numerous exchanges with people who profess that their unfortunate location in a High Cost of Living Area (HCOLA) is the reason for their financial troubles, or their lack of savings, or their inability to make earlier retirement happen. And these people will present their living in an HCOLA as a situation forced upon them by questions of employment, family or some other constraint. I give very little credence to those arguments. And I do so from personal experience.

Only once has someone presented to me a truly compelling reason forcing one to live in an HCOLA. That reason was having to live in close proximity to a particularly specialized medical facility. Other than that, I believe that ending up in a High Cost of Living Area is not inevitable. I, for one, have had little trouble avoiding it.

I am convinced that the HCOLA “forced” choice is a myth. Bupkus. Being trapped in an HCOLA is not something that had to happen to anyone. And no one should let it happen to them if and when confronted with having to decide whether to move to – or remain in – a High Cost of Living Area.

The crucial financial penalty that results from living in an HCOLA comes primarily from higher costs for housing, insurance, taxes and services. The reasons people give for having to reside in an HCOLA involve employment, proximity to family, access to amenities, and quality of schools. The reasons and the penalties intertwine to create quite a financial trap. Let’s see if we can help folks unravel the net before they fall into it.

Employment, I think, is one of the top reasons people give for living in an HCOLA. After all, one has to go where the jobs are, right? Well… up to a point. High Cost of Living Areas are not the only places jobs can be found. One needs to widen one’s job search horizons as well as put job opportunities in context of the living costs to be faced in the job area.

My new barber/stylist recently relocated to Virginia from Long Island. Back there, she was making $21 an hour as a bank back office supervisor. Here, she makes $16 an hour. The difference is about $10,500 gross a year. BUT back in Long Island, just her home property tax was $12,000 a year. She readily admits that the differential in housing cost, income and sales tax rates, and auto expenses more than nullifies her Long Island income differential. She’s just as well off, or better off, in Virginia at the lower wage.

A bookkeeper working in New York City and living “across the river” in New Jersey recently wrote about his financial situation. He referred to studies showing that his $58,000 annual salary was buying him a lifestyle he could have for $28,000 elsewhere. And he wrote to detail how his real life experience confirmed that.

In my own personal experience, a job opportunity my wife “could not refuse” moved us from South Florida to Maryland 15 years ago. Her new salary was 50% higher. But mine was not since I kept telecommuting for my original employer. We had to pay state income tax on those salaries whereas back in Florida we did not. The sales tax rates were higher in Maryland. Our monthly mortgage doubled. Handyman, lawn mowing and many other services commanded twice the South Florida hourly rates. And then there was the new shock of heating expense in the winter. In short, my wife’s extra income got eaten up very quickly and netting little financial advantage in exchange for more inclement weather and more grueling commutes. We should have looked closer before we jumped.

And that is what you should make sure you do. Look closer. Do not commit yourself to a High Cost of Living Area for the sake of a job. Before you do that, thoroughly evaluate other options and put a seemingly high HCOLA wage in the context of that HCOLA’s elevated living costs. It’s a big country out there and job openings exist in a lot of different places.

But what if you get caught in a major economic slump like the Great Recession of 2008 and lose your job at a time when jobs are hard to come by? If such circumstances box you financially into going to an HCOLA for the sake of a job, make sure not to also get boxed mentally by sinking roots into that HCOLA. Stay flexible. Stay mobile. And keep looking for a better overall deal somewhere else. Because there is one out there.

Since you want to stay flexible, and since that HCOLA job is just a temporary waypoint, don’t base your choice of housing on proximity to the job site. Even in a High Cost of Living Area, there are overpriced neighborhoods and more affordable ones.

I have managed to do that balancing act between neighborhoods in an HCOLA several times. In Honolulu, I worked near touristy Waikiki but lived in Pearl City. In Miami, I worked in the upscale Brickell Area but lived in the affordably nice Roads neighborhood just 3 miles away. The point is that I was able to avoid the worst of an HCOLA’s financial impact by electing to live in the right – and more affordable neighborhood. And so could anyone else.

Family, and wanting to be close enough to it to visit often, is another big reason people give for living in a High Cost of Living Area. After all, that’s where the family is. But I would look at that a lot more closely. It is (don’t you know) the age of the motor car and the 55mph speed limit. And of the internet and the video phone.

If someone needs to visit family daily, then I can only refer them to the examples I have given above on how a smart choice of neighborhood in an HCOLA can spare them a lot of the housing financial grief they would otherwise have to endure. But if we’re talking here about weekend and holiday family visits, then that’s a whole other ballgame.

A 100-mile road trip can be done comfortably in two-and-a-half hours. A 50-mile distance can be covered in half that time. And that simply means that there’s no compelling reason to live IN a High Cost of Living Area in order to make weekly visits to family living in that HCOLA. Just find a map of the USA and look.

The family lives in Richmond, VA? Just 70 miles away or less are the exurban/rural areas of Fluvanna County and southern Albemarle County. Which, by the way, are less than 30 miles from employment-rich Charlottesville.

The family lives in Fort Lauderdale, FL? The towns of southern Palm Beach County are a lot less than 50 miles away.

What if the family lives in the congested Gaithersburg/Rockville, MD area? Or even Washington, DC? Just go 40 miles up the expressway to Frederick County. And do the same if the family lives in Baltimore.

The examples are endless of reasonable cost of living areas within just 50 miles of just about any HCOLA. So a weekly family visit is no reason to doom oneself to the financial drain of an HCOLA. Just spend a couple of hours in the car; the costs of that travel are a much smarter financial option.

Cultural amenities, natural attractions and climate are sometimes brought up as advantages of a particular High Cost of Living Area. But all those are preferential choices, not causes for a forced choice. If a person decides to pay the increased HCOLA costs in order to have access to any or all of those benefits, let that person do so with the clear understanding that what’s actually involved is the satisfaction of wants – not the meeting of needs. And that, by electing to pay for those wants, other financial options (like financial independence) are being postponed or even foregone.

And, still, again I point out the possibility of location positioning within an HCOLA to attain access to such amenities while blunting the HCOLA’s higher living costs.

Living in Pearl City (HI), I had access to the tropical island weather and the Waikiki beaches without central Honolulu’s inflated prices. Living in North Miami (FL), I had access to great scuba diving both north (Palm Beach) and south (Florida Keys) without the spiked expenses of living in Miami proper. Living in Denver (CO), I had access to the mountains without Boulder’s priciness. And so on. Even to satisfy a nonessential want, suffering the financial blows of a High Cost of Living Area is not inevitable. One just has to stay clearheaded and think things through.

My current Reasonable Cost of Living address is one example of how one can make location work to one’s advantage. I live in a small Virginia town near the junction of Albemarle and Fluvanna counties. I am 18 miles from Charlottesville and 75 miles from Richmond. Charlottesville is a thriving and employment-rich university town. Richmond is the state’s culture-rich capital.

Aside from plentiful employment opportunities, Charlotteville has its own commercial airport, world-class health facilities, lots of university-driven cultural entertainment and as much available shopping as anyone could ever want. And it’s all just a 30-minute country drive from my front steps.

As the state capital, Richmond overflows with law firms, museums, cultural venues and everything else that makes a large state capital. And it’s less than an hour-and-a-half from my house. If I had family residing in Richmond, visiting them often would be totally feasible.

I wasn’t always as location aware as I am now. Now looking back, I can see how I could have done much better in my choice of living location just about every time. I already noted how I lived in Pearl City instead of Honolulu. I also could have lived in Hollywood (FL) or Hialeah instead of Miami; Brooklyn instead of Manhattan; Long Beach instead of Los Angeles; Littleton instead of Denver. And so on.

In every case, a little clear thinking would have provided me with a more financially advantageous place to live. And the same can be true for you.

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Image courtesy of bplanet at


  1. You make a really great point, that I don’t think many people consider. I just had a similar conversation with a family member thinking of moving from upstate NY to San Jose, CA.

    In a few years we are thinking of moving to western VA, I may have to pick you brain for some great small towns to raise kids in!

  2. RTW, I just wanted to say I’ve read your entire blog. I thank you for your clear thinking on a great many things, and for sharing this with us. We are getting ready to retire in 6 months, and thinking of where to be. We live in the Minneapolis/St.Paul area, as do our 4 children and 11 grandchildren. Our home is worth $300,000 (paid for), but we can find perfectly serviceable homes about 75-125 miles away for under $150,000. It would be nice to invest the excess $150,000.

    The thing is, if we moved out to the sticks, we could easily make the 2 hour trip to visit kids/grandkids for any occasion (averages 1-2 times per month). So I don’t think I would be afraid to do this. Thanks for your thoughts on moving to a lower cost of living area. P.S. my dear wife loves chickens, and by moving to a little acreage in the sticks, she could have a chicken coop!

    1. Thanks so much for the kind words! That kind of feedback is what I write for. 😀

      We too opted for more acreage in the sticks at a lower cost. And, yep, my wife has ended up with a BIG chicken coop and more eggs than we know what to do with.

      Good luck.

  3. This is a very interesting subject for me…and I actually just read the forum post on this topic you started at MMM. I live in NYC with my wife and child…income is pretty good but not great. Housing definitely is the biggest expense and very hard to reduce. (I live in Queens not Manhattan or BK). This is the case especially when you have a child and want to be in a good school district…and safe neighborhood. My wife and I both work in government so the pension and benefits are a bit of a golden handcuff and it is harder to transfer to other locations. Family and friends are probably the main reasons why we stay. I actually work in Long Island so 100 miles either distance won’t help with housing costs. It is a choice so I can’t complain. I’m still trying to retire early though…and once again the pension is holding me back. A big penalty for leaving early! I guess retiring at 55/56 isn’t too bad, but was hoping for 45/46!

    1. Sometimes all one can do is strike the best possible compromise and move on. (And Long Island is definitely a logistically tough one!)

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