Only One in Three American Millionaires Feel “Wealthy” and Nearly Half Say Their Financial Planning Needs Improvement, According to Northwestern Mutual Planning & Progress Study What’s it like to feel like a million bucks? Millionaires indicate it’s less about believing you’re rich and more about having confidence and clarity about the future. Nearly 80% of … [Read more…]
Many Reddit users report receiving $10.xx checks for money owed to them as being American Express Business cardholders. Apparently there were $10 wireless credits not paid out and these are being sent out with interest. Some people got $20.xx check or $30.xx checking, presumably for some months combined. Some got even a dozen or more of these checks. It’s been sent even to people who are not aware of any missing credits, so keep an eye out and don’t throw out the mail too quickly.
Source: doctorofcredit.com
A source on Reddit reports that the no-fee Chase INK Unlimited signup bonus will be increasing on August 25, 2024 from 75,000 to 90,000.
When this goes live, there will be a few excellent deals that will be running concurrently:
The advantages of the 90k offer over the 120 offer:
After being declined two months ago for the INK Preferred, I was considering lobbing in an application before September 5th. Now I’m thinking about waiting another months (so that it’s 3 months from my denial) and then hopefully applying for the INK Unlimited.
Source: doctorofcredit.com
Citi has filed a trademark for ‘Citi Strata Select’. Earlier this year Citi launched the Citi Strata Premier (rebrand of the Citi Premier) after filing trademarks for Citi Strata Premier & Citi Strata Elite. It’s unclear if the Citi Strata Select would be a completely new product or a rebrand of an existing card.
The most likely option would be that this is a rebrand of the Citi Rewards+ card. This is backed up by this reddit post from a month ago citing the Select name and stating that the Rewards+ needs to be refreshed before the launch (I would have thought they would do both at the same time). The rewards+ card offers the following:
Hat tip to Proud Money
Source: doctorofcredit.com
Have you wondered what to do with your old VHS tapes? Here are the best places to sell VHS tapes for cash. Whether you want to declutter your space or make extra cash, I have got you covered. From Facebook Marketplace to Reddit, I’ll walk you through the different places where you can sell VHS…
Have you wondered what to do with your old VHS tapes? Here are the best places to sell VHS tapes for cash.
Whether you want to declutter your space or make extra cash, I have got you covered. From Facebook Marketplace to Reddit, I’ll walk you through the different places where you can sell VHS tapes.
Some VHS tapes may only sell for $1, whereas others have sold for over $10,000 (I’m not kidding!). So, it may be worth it to see what you have!
In this article, we’ll go over the strategies to turn your old VHS tapes into cash and learn things like:
Recommended reading:
Below are the best places to sell VHS tapes for extra money.
eBay is one of the best platforms for selling items like VHS tapes due to its massive global audience. This means more eyes will see your listing and increase your chances of selling VHS tapes.
Also, eBay is a trusted platform (pretty much everyone has heard of this site), so the seller and buyer have confidence in the purchasing process.
To sell a VHS tape on eBay, create a listing providing important details like the title, condition, if the VHS tape is still in its original packaging or shrink-wrap, and any other important information. You’ll want to make sure to include high-quality photos of the tapes to give potential buyers a good idea of what they might purchase.
Yes, you can sell VHS tapes on Amazon. Keep in mind that Amazon has specific requirements for selling VHS tapes, including condition, packaging, and fulfillment methods.
Selling on Amazon has a lot of benefits, including:
To successfully sell VHS tapes on Amazon, you need to create an Amazon Seller Account, create listings for your VHS tapes, and choose fulfillment options.
You can sell VHS tapes on Etsy as long as the VHS tape is unique or vintage (which, I would think would be almost any VHS tape because almost all of them would be vintage?).
Etsy is a great place to sell VHS tapes due to the collectors’ audience and people who appreciate nostalgic items like VHS tapes. I just looked and there are a lot of VHS tapes for sale on Etsy, so this is definitely a popular spot to buy and sell VHS movies.
To get started selling VHS tapes on Etsy, you need to create an Etsy seller account, set up your shop, list your VHS tapes, price your items, and have great customer service (of course).
Selling VHS tapes on Facebook Marketplace is a great idea because of the large customer base, but also the ability to sell locally.
So, if you want to sell your VHS tapes near you, then this is a great place to start.
To get started selling on Facebook Marketplace, you need a Facebook account (which, you probably already have). Then, head to the Facebook Marketplace tab and create a listing. You’ll fill out required fields like title, price, category, description, and location. Add high-quality photos and provide details on the VHS tape such as the condition and any special features.
Yes, there are VHS fan’s Facebook groups, and quite a few. This is one of the best places to sell VHS tapes online for cash. These groups help you connect with VHS fans to buy, sell, and trade VHS tapes.
Here are a few VHS fans’ Facebook groups:
There are many VHS-related groups on Facebook, so make sure to search for groups using keywords like “VHS collectors” or “VHS tapes”.
One of the easiest and best places to sell VHS tapes for cash is by having a garage sale.
Selling VHS tapes at your very own garage sale is a great idea because you’re selling locally, don’t have to worry about shipping, and can get cash right away for it. You can also sell any other items around your house and de-clutter with a garage sale.
To have a successful garage sale, here are some helpful tips:
Now, you most likely won’t get the most amount of money per VHS movie that you sell (typically, you would sell them for $1 or less, depending on the movie), but if you have a lot of VHS tapes to sell, then this can be a quick and easy way to get rid of them.
Mercari is a great app for selling VHS tapes. It has millions of users, so lots of people can see your tapes. It’s easy to list items on Mercari, and they offer different shipping options. You can even use prepaid labels to make shipping faster and easier.
Mercari has seller protection policies to keep you safe from fraud. These protections help with disputes, unauthorized returns, and fake transactions. You can set your prices, and there’s a “Make an Offer” feature to help you sell faster. This makes Mercari a safe and flexible place to sell your items.
Pawn stores are a great place to sell VHS tapes if you want quick cash. You don’t have to worry about shipping, and you can negotiate the price. There might be several pawn stores near you, so you can check which one offers the most money for your tapes.
There are some downsides to selling VHS tapes to a pawn shop. You might get less money than you would online because the pawn shop needs to make a profit. Also, pawn shops might not focus on VHS tapes (after all, they do need to sell them, and how many people go to a pawn store to buy an old VHS tape? Probably not many.), so it’s a good idea to call ahead and check before you go.
OfferUp is great for selling VHS tapes because it connects you with local buyers. This means you don’t have to deal with shipping.
You can also negotiate prices on the app and attract more buyers. Plus, there are no listing fees or commissions, so you keep all the money you make.
Selling your VHS tapes at thrift stores can be a good option, but you need to check their policies and see if they accept VHS tapes for donation or purchase. Not all thrift stores buy VHS tapes due to limited demand space constraints, or the condition of your VHS tapes.
Before driving to any thrift stores, contact them or check their website to see the buying policies. If thrift stores do accept VHS tapes, they’ll likely have specific criteria for what they can accept, such as popular titles, condition, or collectible editions. You need to also keep in mind that thrift stores will offer a lower price than what you’d earn if you sold on a marketplace.
My sister has sold many VHS tapes to thrift stores over the years, so I know this is a real way to make extra money selling VHS tapes.
If you’re having a hard time selling your VHS tape on a marketplace, you may want to try selling VHS tapes at antique stores. There may be an antique store in your area that sells VHS tapes or you could even set up a booth.
Before heading to any antique stores, call them and ask if they accept VHS tapes. Some antique stores may not accept these items since they are not officially considered antique and their clientele are usually looking for rare and historical items.
I have personally seen many VHS tapes for sale at antique stores, but I do not know how well they sell.
You can sell VHS tapes on Craigslist and find local buyers. Just go to the Craigslist website, click on the “For Sale” section, and create a new listing. You’ll want to write a good title, set a price, and add details about the tapes.
When selling items on Craigslist, it’s important to choose a meeting place. Pick a well-lit, public spot like a police station parking lot. This helps keep both you and the buyer safe.
Flea markets are a popular spot for selling VHS tapes and if you have a lot of VHS tapes, this could be a good spot to sell. You’ll want to research flea markets in your area and check their website for info on vendor requirements and booth rental fees.
When setting up your flea market booth, organize your VHS tapes by categories or genres to make browsing easier for shoppers. Price your tapes based on their condition, rarity, and demand.
Believe it or not, you can sell VHS tapes on Reddit through the r/VHS subreddit. You’ll need to join Reddit and subscribe to the VHS subreddit. Then, you can create a selling post detailing the VHS tapes you’re selling. You’ll want to include important information like titles, genres, conditions, and any special features.
My sister has actually bought an old VHS movie from Reddit. She couldn’t remember the name of it and posted it in a forum with some hints. It was a favorite movie of hers, and she and her friends were trying to remember the name. Someone commented and instantly knew the name, and they also had it for sale. She bought it and it was a win-win for everyone!
Below are answers to common questions about selling VHS tapes for money.
VHS stands for Video Home System. It’s a kind of tape used to watch movies at home. VHS tapes come in plastic cases with reels inside, and the tape has a magnetic coating to store video and sound. People used these to watch movies in the 90s and early 2000s with their VCR.
Although VHS tapes are not nearly as popular as they once were, people still love buying them. Just like people are getting back into records and record players for music, VHS tapes are making a comeback due to their nostalgia and hipster vibe. People also like collecting VHS tapes and use them as a way to preserve this type of media.
Yes, it can be worth it to sell old VHS tapes, especially if you have a lot of them cluttering your home. You may even have a rare VHS tape that’s worth a decent amount of money.
It’s easy to find out if your VHS tapes are worth money with a quick Google or eBay search. To see if your VHS tape is worth money, you can do the following:
The types of old VHS tapes that are worth money include limited editions, out-of-print titles, cult classics, foreign films, movies that are a part of a VHS collection, Disney movies, and early releases. Blockbuster films from the 1970s-1980s, 1980s horror films, and VHS tapes that are still in packaging can go for a lot of money too sometimes.
Some examples include:
For example, there’s a listing for The Goonies (first print, graded, etc.) on eBay priced at $28,500. However, you can also find used copies selling for around $50, which is still a decent amount of money for an old VHS tape!
Yes, there is a collectors market for VHS tapes. People gravitate toward VHS tapes due to their nostalgia, physical media appeal, rarity, and exclusivity. Certain VHS tapes can be worth quite a lot of money, even in the $10,000+ range.
Several Disney VHS tapes are valuable among collectors, such as:
I hope you enjoyed this article on the best places to sell VHS tapes to make extra money.
Selling VHS tapes can be a great way to make extra money and declutter your home. I highly recommend that you research your titles (if you have the time!) thoroughly so you’re getting a fair price for your VHS tapes.
There are many online marketplaces, auctions, and even local stores where you can sell your VHS tapes. Some are worth more than others, such as tapes that had limited releases or are in mint-condition.
Are you interested in selling VHS tapes for money?
Recommended reading:
Source: makingsenseofcents.com
If you’re on TikTok or Reddit, it’s likely you’ve come across a tenacious rumor: That it’s better to invest in life insurance than a 401(k) for retirement. So, is it true?
Life insurance isn’t an investment, while a 401(k) is a type of investment account offered through your employer. Permanent life insurance (which offers lifelong coverage) isn’t an investment, and its exorbitant fees erode the money you pay into your policy and any earnings you might make for the first decade.
“It was very strange to me that there were so many life insurance salespeople all over TikTok, basically soapboxing about life insurance, like it was the next big thing like it was the most amazing investment on Earth,” says Vivian Tu, founder of Your Rich Bff, a TikTok channel that focuses on financial education, based in Miami Beach, Florida.
In some cases, yes. There are some types of life insurance, such as whole life insurance or universal life insurance, that have the ability to increase in cash value. But how do some of those policies earn money like an investment return? By tracking market indexes.
One of the features touted by TikTok influencers is that returns made on insurance policies aren’t affected by the overall stock market, but that isn’t necessarily true. The insurance companies may invest in the stock market with part of their portfolio, which is technically a portion of a policy owner’s premium. Though some policies provide fixed returns, some depend on current interest rates and investments. Some policies have you pick the stock or bond indexes for your policy to mirror, such as the S&P 500, and the insurance company pays you interest based on how those indexes perform.
If life insurance can earn stock market interest in a way similar to that of a 401(k), what’s the issue?
The issue is that, depending on the policy, the staggering fees insurance policies charge often wipe out the amount you would get back from those premiums and any investment returns.
For example, if you pay the premium for seven to 10 years, most of those premiums go toward the cost of providing that insurance. In addition, there are administrative fees and the agent’s commission, though you may not see a commission listed on a statement and it may be difficult to figure out exactly how much those commissions are. Those commissions aren’t a one-time payment: You may continue to pay them for seven to 10 years, or as long as the policy is active.
The premiums you pay that cover fees don’t sit in an account waiting for you to cash them in. If you pay into a 401(k) for a decade, you get to keep all that money less any fees and investment losses. With an insurance product, it’s only after a decade (again, depending on your policy) of monthly payments that you actually start accruing premium money and interest in a cash value account the insurance company holds for you.
That interest percentage is less than you can get in a high-yield savings account and far less than the stock market’s long-term average of 10% (not accounting for inflation).
Insurance policies also have significant surrender charges, which are fees you have to pay if you withdraw money from your policy early. These charges are often so large that they can dramatically reduce the net value of your policy until the first few years pass.
For example, if you wanted to take money out of your policy after the first two years, your surrender charge would likely be so high that there would be little to no money to take out. These charges eventually reduce to zero, but it can take 10 to 16 years.
While 401(k)s do charge a 10% penalty if you want to take money out of your account before you’re 59½, that 10% is likely to be far less than a surrender charge. Plus, there are lots of exceptions to the 401(k)’s 10% penalty, including disabilities, the birth of a child, medical expenses and emergency personal expenses.
If you were to invest in the stock market through a 401(k), you wouldn’t lose 10 years’ worth of investment dollars to the cost of insurance, and your management fee would likely be less than 1%.
“The idea that 401(k) fees are higher than an insurance product that would be serving as an investment, I don’t even know how you support that idea,” says Georgia Lee Hussey, a certified financial planner and founder of Modernist Financial, a wealth management firm in Portland, Oregon.
In addition to paying commissions and exceptionally high fees, you may not even know how much you’re paying because insurance fee structures are so complicated.
“Whole life policies are basically called the black box of insurance policies. You can’t really see what’s happening inside them,” Hussey says. “You can understand the internal expense ratio sometimes but you usually have to go deep into the disclosure documents to understand what the insurance company is really getting paid.”
If you purchase insurance through an agent or broker (or a TikTok influencer), it’s possible that that person will be making a commission, and that’s on you to figure out.
“When you actually look into it, you realize that all of these people are, in fact, life insurance brokers. They don’t even work at life insurance companies that provide the policies,” Tu says. “The vast majority of them are not fiduciaries, so they are not legally obligated to do right by you financially.”
On the topic of using insurance to invest, it’s good to remember two cardinal rules of investing: If it sounds too good to be true, it probably is. And if you can’t explain it clearly to a friend, you probably don’t understand it, which could be a sign to steer clear.
As Tu says: “It’s insurance. It’s not an investment.”
Source: nerdwallet.com
Americans with a financial advisor expect to retire two years earlier according to Northwestern Mutual’s Planning & Progress Study Ready to Retire: 75% of those who work with an advisor say they will be financially prepared for retirement versus 45% of people without an advisor Free from Anxiety: 64% of Americans with an advisor say … [Read more…]
Update 7/4/24: Deal is already live in branch, via physical mailers, via preapproval, and via floating links (use those at your own risk). A report on Reddit indicates the public availability was pushed off until July 11th. (We still don’t know if this offer will ever become available via referral links, but I’d say there’s a good chance it will at some point become available.)
Update 7/2/24: Offer now showing up in pre-approvals.
Branch only offer until July 3, 2024; we’ll add the direct link when it becomes available
Chase is offering a special signup bonus on the INK Preferred business card:
We wrote about this offer a few weeks ago as a rumor, and it’s now been confirmed as already available in branch. Reports indicate it will become available online on July 3, 2024.
Over 3 years ago Chase increased the bonus offer on this card to 100,000 points, and now they’re running a in increase to 120,000 points (probably a time-limited offer). They’re keeping the lower $8,000 spend requirement which is nice.
The big question is whether referrals will update to the 120,000 offer. If that happens, this will be a historically amazing offer for someone in 2-player mode to get 160,000 Ultimate Reward points with a single signup and $8,000 of spend. Remember, referrals are paying out 40,000 points per approval until September 2024.
Another big question is whether (after publicly available) they’ll match those who signed up for the lower 100k offer. Lately they have been matching, and I think they chances are good. We’ll have to wait until July to find out.
Check out these Things to Know about Chase Credit Cards before applying. We’ll add this to our List of Best Credit Card Signup Bonuses when it becomes available online.
Related – Chase is matching the lower spend requirement for those who signed up earlier with the higher spend requirement (YMMV).
Source: doctorofcredit.com
Folks on Reddit report that American Express has now added terms to exclude Google Fi from counting as the Wireless category. This matters for things like the $10 Amex Business Platinum credit and for the 4x earn on the Business Gold.
Any purchases from Google Fi, third parties, authorized retailers or resellers are excluded. (Terms link)
From the statement: “Effective June 21, 2024, Google Fi is not an eligible US wireless provider and purchases of Google Fi will not be eligible for additional rewards or statement credits under the wireless rewards category”
From what I gather, it hasn’t worked in a while, and needed manual application to get credit. Going forward it’s less likely we’ll be able to get manual credit given it being clearly excluded.
Hat tip to DDG
Source: doctorofcredit.com
Inside: The decision on where you live is a big life choice. Learn how an HCOL vs LCOL area will impact you financially. Plus find the cost of living city that fits for you.
HCOL. LOCL. MCOL. What do these acronyms mean and why should I care?
Back when I was trying to decide where to live, there wasn’t a big discussion about the high cost of living or low cost of living areas.
You just picked a city close to family or branched out to a new area. Were you drawn to the big city or not? Plain and simple.
Today, there are many tools at our disposal to try and figure out what is the best city to live in based on income, expenses, and the lifestyle that you desire.
In this post, you will see how to analyze what type of city you want to live in and see if it makes financial sense for you.
In a low cost of living city, you can buy a house for $50,000. In contrast, a median home price in a high cost of living city can cost $1.5 million. This is a correlation between supply and demand in the market.
The more people who want to live in a certain area that has less available space will naturally drive up prices. Whereas most low cost of living areas, the supply is abundant since there is plenty of space to spread out and find your own neck of the woods for much less.
Here’s a quick comparison of HCOL vs LCOL vs MCOL.
New York City has the highest cost of living at 100, followed by Los Angeles and San Francisco. This graph highlights the difference in cost of living in these example cities.
| HCOL Seattle, WA |
MCOL Las Vegas, NV |
LCOL Knoxville, TN |
|
|---|---|---|---|
| Cost of Living Index | 85.57 | 69.33 | 63.26 |
| 2 Bed Apartment Rent | $2,724 | $1,176 | $788 |
| Median Home Price | $826,200 | $441,771 | $256,188 |
| Median Income | $92,263 | $56,354 | $33,229 |
Simply put, HCOL means a high cost of living.
This type of acronym is to describe certain areas or cities where expenses that impact your budget the most, such as housing, food, and transportation, are more expensive than other areas.
When defining an HCOL area, it is a comparison of the cost of living based on other areas around other cities, states, and countries.
There is no hard line to define high cost of living since it is compared to the other cities.
Is it possible to live in a high cost of living area? Absolutely, it all depends on how you choose to live, the income you make, your lifestyle choices, and your savings percentage.
VHCOL are VERY high cost of living areas, such as Manhattan, Honolulu, San Francisco, Singapore, or Hong Kong.
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Just because an area is labeled HCOL does not mean that you shouldn’t call the city home and stay away from these areas.
There are plenty of advantages and disadvantages of living in a high cost city.
There are always drawbacks to living in a high cost of living area and you have to decide whether or not what works for you.
In order to make a solid decision on where the best place is for you to live, you need to know this information.
First of all, in HCOL cities, the job market is stronger, there are more jobs available, and typically those jobs have a higher paying threshold than other areas.
That is why many companies are attracted to these areas because they know the talent pool of potential employees is much stronger in high cost of living area versus other areas where there are not as many skilled workers.
Since companies know they must pay their employees a fair wage living in a high cost of living area, incomes are higher to support the increased expenses.
This helps those municipalities collect more taxes, which feed back into the system to provide more for their residents.
More opportunities abound in a high cost of living cities.
Not only in the job market but there is access to public amenities and conveniences. Some examples include museums, sporting events, transit, best medical services, endless entertainment options, quality restaurants, high-end shopping, and quick access to international airports.
Even better, you can find free entertainment each and every day that does not cost a penny. Here is a list of 101 things to do with no money.
There are many benefits of living in a high cost of living area just because their opportunities are endless. You will always find something to do and there is always stuff going on.
Typically, in your high cost of living cities, that is where you will find the better schools. This is in direct correlation to the job market and skilled workers.
These skilled workers tend to have a higher instance of college graduates and they tend to want the best for their children. As a result, the schools tend to be much better than you would find in other areas.
Another advantage of big cities is the variety of neighborhoods you can find in a bigger city. You can find the type of house you want to live in and the diversity you crave.
While home costs are much higher, there is also a greater chance of income increasing your home equity much faster than other areas.
For example, in Michigan, you could pay $100,000 for the exact same house in 5-10 years since appreciation will not happen at the same rate as other cities. Whereas, if you look at some of the hot markets, like Denver, Phoenix, or Austin, the home prices have been skyrocketing.
Thus, if you live in those quickly appreciating housing areas, there is a higher chance to increase the value of your house.
First, housing costs can break the bank. It is the biggest expense for any
household.
If you were unable to secure a salary to justify the housing cost, it makes it nearly impossible to be able to afford to live in a high cost of living area.
This is where you would have to get creative and look for housing subsidies or
other means to stretch your housing budget.
Another con of a high cost of living areas is it is much harder to find housing! House and rent prices are higher, jobs are tougher to find where there’s opportunities abound, and you may feel like you are searching for a needle in a haystack.
You need to have the right opportunity to find the proper house for you. If you are looking at buying, you need things to line up properly and in your favor.
Since incomes tend to be much higher, many people find the urge to spend more discretionary income.
In many cases, this means that the average household may stretch themselves a little bit further by keeping up with the Joneses. They tend to spend more frivolously and not live as frugal.
This is a trap to be aware of if you are in a high cost of living area. You can be savvy with your money and save, but you have to be cognizant of how you spend your hard-earned salary.
These are the HCOL areas. Do you need to avoid them? No, but going into those areas, you must realize the cost of living will be higher.
Here’s a list of all of the cities that are the top 20 cities that are high cost of living areas according to Kiplinger:
| 1. | Manhattan, New York | (145.7% above U.S. average) |
| 2. | San Francisco, California | (94.7% above U.S. average) |
| 3. | Honolulu, Hawaii | (97.6% above U.S. average) |
| 4. | Brooklyn, New York | (80.5% above U.S. average) |
| 5. | Washington, D.C. | (60.7% above U.S. average) |
| 6. | Seattle, Washington | (56.7% above U.S. average) |
| 7. | Oakland, California | (53.9% above U.S. average) |
| 8. | Arlington, Virginia | (50.5% above U.S. average) |
| 9. | Orange County, California | (50.2% above U.S. average) |
| 10. | Boston, Massachusetts | (48.8% above U.S. average) |
| 11. | Queens, New York | (47.8% above U.S. average) |
| 12. | Los Angeles, California | (46.6% above U.S. average) |
| 13. | Bethesda, Maryland | (45.5% above U.S. average) |
| 14. | San Diego, California | (41.4% above U.S. average) |
| 15. | Alexandria, Virginia | (40.0% above U.S. average) |
| 16. | Stamford, Connecticut | (36.4% above U.S. average) |
| 17. | Portland, Oregon | (34.3% above U.S. average) |
| 18. | Fairbanks, Alaska | (27.9% above U.S. average) |
| 19. | Bergen County & Passaic County, NJ | (26.6% above U.S. average) |
| 20. | Anchorage, Alaska | (24.4% above U.S. average) |
LCOL stands for lower cost of living.
These cities have a lower average cost of living versus the average.
Simply put…your ability to stretch your income goes much further in a low cost area compared to a high cost of living area. This is where you can get a bigger bang for your buck.
The differences in the area where you can live can be vastly different. Thus, providing benefits or drawbacks of choosing to live there.
The cons are typically the reasons that most people want to stay away from these cities.
This is where personal preference tends to play the biggest reason for choosing one location over another.
Just like with a high cost of living area, you need to weigh the pros and cons of
living somewhere where expenses are not quite as high.
One of the biggest benefits is a slower pace of living in low cost of living area.
Life doesn’t move as fast.
There is more time to breathe, there is more time to step back and take a bigger picture. It is not go, go, go, go 24/7. Time to enjoy the fresh air and slower pace.
This is why people choose to live in a low cost of living area. Period.
You are able to afford much more house for much less.
That right there, over the long term can make or break somebody financially.
Many of the lower cost of living cities also benefit from lower taxes as well. They have lower income taxes, and even possibly, lower property taxes. So, this is something to take into consideration when looking at a low cost of living area.
Check what the difference would be from where you’re currently at to where you are considering moving.
This is the bread and butter spot! When you can take in a higher pay and still live in a LCOL city.
After 2020, remote work is becoming more and more popular. In addition, it is an added benefit companies are including to attract skilled employees.
This is one scenario where you can get the best of both worlds.
First of all, there are fewer opportunities. There are fewer things to do, there are less things going on. The airport is a further drive away.
In a big city, you can always find events happening. It may not be the same in other cities. However, some cities have created programs to draw in residents with the big city feel like Bellefontaine, Ohio.
The job market doesn’t have the high-paying jobs that you would find in the bigger cities. The income potential in one of these cities does not compare.
Let’s face it… a good majority of your working years are about built around making an income. With a lower cost of living city, the income limitations can be cumbersome and it takes longer to be able to reach your financial goals.
Geographic arbitrage can give you great value for your money.
Arbitrage is the spread of differing prices for the same thing like rent, food, or transportation.
This means you can save more money by living in LCOL state or spend less of your nest egg by living in a LCOL countries.
These are the areas you can find the lower cost of living. There are many LCOL cities to be found as well.
| 1. | Mississippi | (84.10% of U.S. average) |
| 2. | Kansas | (86.67% of U.S. average) |
| 3. | Oklahoma | (88.09% of U.S. average) |
| 4. | Alabama | (88.80% of U.S. average) |
| 5. | Arkansas | (89.16% of U.S.average) |
| 6. | Georgia | (89.30% of U.S. average) |
| 7. | Tennessee | (89.49% of U.S. average) |
| 8. | Missouri | (89.75% of U.S. average) |
| 9. | Michigan | (90.54% of U.S. average) |
| 10. | Indiana | (90.57% of U.S. average) |
Listed in alphabetical order because there are many to chose from based on your personal preferences.
Source: https://www.expatistan.com/cost-of-living/country/comparison
The definition of MCOL is any area that just has an medium cost of living.
There is not one extreme or another. These cities are just plain average. Maybe slightly above or below the median cost of living.
This can be a sweet spot of reaching your financial goals while enjoying a higher quality of life.
As you can read on Reddit personal finance threads, there are plenty of reasons to live in an MCOL area.
Mostly because these types of cities you can get the best bang for your buck, and still have the pros of living in a high cost of living area, as well as the pros of living in a low cost of living area.
This is where the job market may be very stable with good wages but the cost of living is not going to cost you a fortune.
Also, you can find tons of cities that meet the criteria of a MCOL city.
Regardless of whether you choose, HCOL, LCOL, or MCOL areas, the cost of living will be dramatically different between these cities.
Whether you are looking at the downtown area, the outlying suburbs, or maybe even the cities that have popped up around near the main city.
Just because the city is HCOL or LCOL, there will be neighborhoods that will be the outliers to the main part of the city.
So, when you are looking at cost of living, you must know the things that are most important to you and what type of neighborhood that you would want to live in because they can be found.
That is what I call hidden gems.
It is possible to find a cheaper house in a low cost of living or high cost of living area, you just have to do your homework and know what you’re looking for.
Vice versa, it is very possible to find a neighborhood in a low cost of living area that is much higher than the surrounding areas.
It is possible to be a homeowner in a in a high cost of living area. You just have to be able to afford the down payment on the house to make being a homeowner justifiable, if possible.
Before you decide to buy a house, here are some factors you need to take into consideration..
1. Does it make sense?
First, you have to make sure that it makes logical sense to buy a house. Especially in a high cost of living area because the house prices may not match up to what the income that you are bringing in.
Will you still be able to reach your money goals by purchasing a house? Or will you be house poor?
2. Compare rent to potential mortgage
Will it be cheaper to rent? Or cheaper to have a mortgage?
To figure this out, take what the average rent is in your neighborhood. Then, use a mortgage calculator to figure out the maximum amount you can afford.
Since those calculators will leave you house poor. Decide what you are able to justify in spending on a mortgage and figure out what the mortgage payment is.
Is the mortgage payment less than average rent in the area?
For example, it may cost in a high cost of living area, like San Diego, it may cost $3,000 a month to rent a house. Whereas you might be able to buy a similar home in the same neighborhood and have your mortgage payment of $2,259.
Thus, making buying makes more financial sense than continuing to rent.
3. Expand your horizons
Another tip to afford your dream house – do not be set on that one specific neighborhood in a high cost of living area.
Many times you can find an up-and-coming neighborhood that is much less than the trendier and hip current neighborhoods that you want to live in.
Thus, you can typically save a good chunk of money. Plus in the long run, you greatly increase the potential for home equity.
4. New Homebuyer Programs
If this is the first time you are buying a house, then look into first-time homebuyer programs and grants. (Hint… this is like free money!)
There are many out there because cities want their residents to buy in their neighborhood and their cities because that means they are going to be there for a longer-term.
Also, there are programs for the military, teachers, nurses, single moms, minorities, graduate students. You just have to look.
5. Save for Down Payment
When you are looking at buying a house, this is the time to become serious about saving for a down payment.
You may have to find ways to save more money each month.
This could include things like downsizing your lifestyle to make it possible. Living with friends or family while you save up more money. Or just spending less for a certain period of time until you reach your downpayment goal.
6. House Hacking
The last step is one of the best ways to reach financial independence in a high cost of living city. Plus the concept works well in any city… house hack.
Find a multi-family housing property that you were able to buy. For example, plan to live on one side of the duplex and rent out the other. This will help you pay for your mortgage, by using the rent collected from your renters.
Thus, lowing your overall housing cost, which is your biggest expense.
This is a comparison that you may be surprised by the outcome. Thus, proving why you need to do cost comparisons to see what financially makes the most sense when deciding to move from one to the other area.
comparison of income, expenses, taxes, and potential savings!!!!!!!!!!!
Once again, this is personal to your situation. So, take a moment and use the cost of living calculator yourself.
Paying taxes is one option to increase what you take home in each paycheck.
These are the states that don’t pay state income taxes on wages:
For most people, that is an instant decrease in overall taxes!
Also, if you live in one of the higher taxed states, then you may want to reconsider moving to a lower cost of living area.
The higher taxes income tax states include:
These states tax income somewhere between 7.65% – 13.3%.
Property taxes vary from state to state.
In some states with large property taxes, it may even out with no income taxes. While other states, like Illinois, where property taxes are high and income taxes are above the national average as well.
The reason that most people move from HCOL to LCOL area is to save money. They want to decrease their expenses – that is the primary driver. Other times, it may be that they’re looking for a different type of lifestyle.
But as you can read on Reddit, everybody has a different personal experience.
It may have been beneficial and may have been bad timing. It may have been the best choice. It may have been the worst decision.
Make sure to factor in the costs associated with the move. Also, any ongoing expenses like travel if you are moving away from family.
Deciding where you live is one of the most personal decisions that you can make. Nobody can make it for you. You know what you want in life, how you want to live, and where you would feel more comfortable.
So, let’s look primarily at the financial side of making this decision of what is best.
There are massive differences between HCOL and LCOL cities!! In big cities, life moves at a faster pace. While most cheaper cities areas move at a slower pace, so you have to make the decision of what type of lifestyle.
Do you want you want the big city? Do you want suburbia? Or do you prefer more of a country lifestyle?
When looking at this first factor, your answer should not include money. This is where your heart is. This is where your home. This is the life that you plan on living. This doesn’t include the financial sense.
This includes what makes your heart happy.
One of the things that discussed the most on this site is the 10 Money Bliss Steps to Financial Freedom. That is where most of our readers find their current money goal. And for good reason, you must build a strong foundation with money one step at a time.
In order to achieve long term financial success, the decision on housing is critical as it is the biggest expense in any budget. And that is can have the greatest impact on your budget!
On the flip side, the amount of income you are capable of making can also make the biggest impact on what you can afford to spend.
You must decide on your current money goal as well as the longer term money vision. Maybe you are looking at wanting to retire early? Love to live a slower life in the future?
It is possible to live in HCOL area where you are able to live extremely frugally and save more money. This is what my friend did over at Tuppennys FIREplace. For them, it was a smarter decision. On the flip side, maybe you are happier living a slower pace of life. Income is not the primary driver and you just want to enjoy life more.
At the end of the day, you must prioritize what you want, how your budget and your expenses correlate, and how your saving rate is impacted in various cities.
For those in their younger years may not understand this as much, but as you go through seasons of life, you will realize that you have different goals, objectives, and desires along the way.
When deciding where to live, your current season of life will probably have a very high impact on what you are looking for.
If you have young kids, you probably want to find a neighborhood where you have other families nearby that your kids can interact with.
If you are close to retirement, you may look decide to move out of the good school district because you do not need to pay the premium of living here. You may choose to move to a lower cost of living area, so you have the freedom to travel and help my kids and grandkids.
The greatest benefit of a high cost of living area is the income potential and the career opportunities. Both are much greater in the bigger cities than you would find in the smaller cities.
If your primary goal is increasing your income and advancing your career, then looking at high cost of living areas an absolute must. Plus you might be able to find something on the outskirts of expensive neighborhoods, that would make the most financial sense.
Then, living in HCOL is justified and necessary and the income can justify the higher costs associated.
On the flip side, there is plenty of income potential as a small business owner in a low cost of living area. You just have to know the market, what your skills are in, and what the needs are in your area.
Fixed expenses can be dramatically different in each area.
Write out a list of your top fixed expenses and make sure to compare those as well.
For example, child care costs and tuition are going to be much more expensive in a big city than in the suburbs. Maybe in certain neighborhoods, a car would not be needed; thus, eliminating another big cost and associated maintenance.
While some fixed expenses seem meniscal, over time, they can add up significantly. Thus, helping or hurting your financial picture.
As we covered in this post, there is a lot to consider when deciding between HCOL, LCOL, or MCOL areas.
It is a highly personal decision that you must take the time to make the best decision for you!
Not someone else, but for you.
One thing to watch out for when looking at where to live is what I call the “price tag” of a beautiful city.
Many times, employers know that the city that people want to live in their city for whatever reason. Thus, you will experience what I like to call the “income hit” to living there.
For example, Fort Collins, Boulder, and Austin are highly desirable areas for postgraduates to live in because they fall in love with the town and they want to stay here for the long term. Thus, employers know that this!
As a result, income for jobs maybe 10 to 15% less than they could make in any other type of market or city. So, that is something just to be aware of when wanting to stay in the city that they have grown to love.
In conclusion, when you’re looking at a high cost of living area versus a low cost of living area, there are two sides to the coin.
One – what makes financial sense. Two – your home is where your heart is.
Consequently, you have to make the decision on what makes sense for you.
While it makes financial sense to move to a lower cost city, at the same time, it may move you away from your family and your support system, and everything that you enjoy, and you may not be as happy in the long run.
Enjoy weighing the alternatives between all of the options available.
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Source: moneybliss.org