Sunday, March 6, 2016

Frugal Retirement in a HIgh Cost of LIving Area - or You can LIve Frugally almost anywhere

For those who have not seen this yet. US News and World report just listed Denver as the best city to live in the United States (out of the 100 most populous cities). Colorado Springs, Austin, Raleigh, and rounded out the top of the list. My old homestead in Texas is generally one of the top five small towns.

Before I wax poetical about Denver and living in a high cost of living town, let me say this about that:  Don't move here. Please. It's nothing personal, but we all happen to like it for the most part pretty much the way it is. Away, people, stay away.

Seriously though. There is no perfect place, and as with many places Denver has it's ups and downs. I would say the downs are much less than the pluses (and I'm happy to write about that later). The big down in Denver of course, is the cost of houses-because all the people who live everywhere else want to live here and the building is just not keeping up. Denver has a slightly rising housing market, and a state income tax. In terms of those two huge areas, Denver is a high cost of living city.

Somehow, though, I still manage to do fine. To put it another way: Hi there, I'm Barbara. In retirement, I live on social security and a small government pension. While I have some savings, I don't have additional investments or other financial vehicles. Truly, I live on a fixed income. I live this lifestyle in what is by definition for many a high cost of living area.

Three years ago, I left the Dallas, Texas area for greater Denver, Colorado. I moved primarily to be closer to family, as well as feeling the need for a slightly more multicultural, more liberal, more healthy area. In doing so, I knew that I would be looking at housing expenses that were greater than what I was paying, and that I would be moving to a state with an income tax, as opposed to one without. Much of the time during that first year, I heard from people who have moved away from this area because of the cost. I heard doom from both bloggers and others who were sure I was going to get a shock, and that I was making the wrong choice.

In the time since, I've managed to live well.  In fact, I've lived a rich, frugal lifestyle in some expensive places in my life. My husband left the military and started a new career at the bottom of the ladder when my children were very young-and I remained a stay at home spouse during all of that time. During all of that period we lived in Washington, DC-and loved it so much we lived there 20 years.  Germany was extremely affordable for us, as was most of Europe-except the dollar was in the proverbial toilet the entire time we lived in Europe the last time. So getting paid in dollars and spending Euros was an extremely painful experience-imagine fulling up my car while traveling at European gas prices AND a terrible exchange rate!!

The bottom line is that it is possible (in my experience) to live a frugal life (retired or otherwise) without moving to a "low cost of living area". Now, admittedly I am talking about retirement incomes here, not poverty or minimum wage incomes, although I have known some people in my day who have thrived on little money in some of the most expensive cities around.

Sometimes it takes some creativity and out of the box thinking. Many of us,  are unable or are unwilling to move to a different area just because it is cheaper.  We want to be near family, or live where we do for other reasons. Personally, I am not sure that my long term plan for life is here in Denver. But when I move, it will not necessarily be to another low cost of living area. I'll choose by climate, family, and many other qualifiers first.

So while I am not an expert on the topic, there are things I have learned about frugal living in areas that are traditionally (high cost of living). My experience is primarily with cities and inner suburbs, so for the most part I'm not talking about exclusive small towns or extremely outlying suburbs here, although I'm sure many of the same rules apply:

-You really need to look at all the costs. (And along with that, you may need to adjust those traditional percentage guidelines). Housing in Arlington, Virgina was expensive, if you just compare houses and taxes. However, so many other expenses were much less than the average. My husband and I shared a car and he rode a bike to work and commuted, and because my kids lived in walking distance of schools, my daughter only got a car when she started working nights.

-You often have more frugal opportunities and competition in denser and high cost of living areas. I have a friend who has two groceries and a Walmart as her shopping alternatives. I have access to five groceries, all of which have huge "loss leaders" each week. In DC there are about twice as many groceries and food prices were always extremely reasonable. 

-The richer the neighborhood, the better and more varied the used stuff will be. Obviously this is immaterial to those who avoid the used market. I still tell the story about the upscale yard sale I went to almost thirty years ago. A woman had three full blankets full of sized 6 girl mix and match outfits (some readers will remember the old Sears mix and match kids clothes, and Garanimals). I hesitantly asked how much she wanted for some clothes and the woman answered, "For ten bucks, you can take it all, I just need it gone". These were all like new outfits, some of them in velveteen and ruffles. I ended up re gifting almost all of them after they were outgrown, and for a year all I bought my kid was underwear and socks. Garage sales, thrift stores, you name it, there are advantages.

-free stuff, free stuff, free stuff, especially when it comes to entertainment and socialization. Now, I'm sure this exists at almost any level, so this is not just a high cost of living area advantage. It is worth mentioning though, because the misconception seems to be that if you live in a high cost of living town, you need to spend serious money to entertain yourself or experience "self improvement". While I choose to spend money occasionally on so called "real" concerts and tickets, most of my entertainment is of the free and cheap variety-and it is everywhere. Local theater, free museum days, free (or donation entry concerts), extensive library programs, senior centers and more-all of these options mean that most of the time I don't have to spend money for amusement or socialization. Or at least not much. And those of us who belong to the Olli senior college program get free and discounted prices at the university recreational venues.

-Senior/Retiree/Boomer bennies. Upscale and suburban/urban areas are more liable to have really good recreation and senior support facilities, as well as the taxes to pay for them. Again, this doesn't mean that other areas don't offer these options, just that there are free and low cost options in pricier areas. I have a large senior center attached to a recreation center and pool. They offer large lunches for a nominal fee, have a podiatrist who comes once a week (again for a nominal fee), free lectures and events, and pinochle groups, bridge groups and more. They have also started a fifty plus singing group that meets once a week. Supposedly voice quality is not a requirement, but they have yet to hear me. Add to those options all the traditional senior discounts, and I am not complaining!! My suburb has a mini bus for those who are 60 plus, and one of my knitting buddies (an eighty six year old woman who still does crunches and uses weights), takes that to knitting and other events rather than dealing with traffic. 

There are more examples and everyone's experiences will vary, depending on interests and needs. In my experience though, the bottom line is that living in a high cost of living area does not mean breaking the bank, if you leverage all the options to you, don't feel the need to have the best and the newest, and common sense and have realistic expectations.  Getting to know the area you live in is your best defense.

What about you-have you chosen your retirement location completely because of the cost of living?


  1. I currently live in high-cost New York. We're looking to relocate eventually to a lower cost area. Fortunately (I guess?) for us, pretty much everywhere but DC and coastal Calif. is cheaper, so we have plenty of options. But don't worry. We will not darken your door in Denver. We are lowlanders; we like the water, and the thick moist air, not the thin, low-oxygen mix you get a mile up toward outer space.

  2. It sounds like you have a lot of low-cost options for recreation for seniors in Denver. That's great because we don't have much of that for seniors where I live though there is some available.

  3. You have some great ideas and tips Barbara in your port today. Thanks for sharing. Things to think about, for sure!

  4. I moved from Seattle to Walla Walla, WA to be near family and because it was cheaper to live here then. I sold my not paid for Seattle house and bought one outright here. I do miss the culture on the west side of the state. I also chose it because there are three colleges here and two decent hospitals here. I can walk to the clinic if I choose to do so. The schools provide many plays, concerts, film series, and classes. The weather is decent too.

  5. I've lived in the Phoenix area for 35 years and it has been a lower cost of living than a lot of the country.Housing was not bad,groceries,etc. Not the best public transportation but that's improving. We moved to a small mountain town for a year and a half and the cots of gas, groceries, taxes and just abotu EVERYTHING went way UP! The nearest grocery store was 15 miles away and to go to Costco or Michaels or,well,anywhere but Walmart,was a two hour drive to the "city." We moved back to the suburbs of Phoenix and I am very happy! Our retirement income goes pretty far.Many outdoor play opportunities for free.Bike riding, library programs,Riparian park, bird walks, coffee shops with free music,free museum days,etc. Life is good.

  6. You are very lucky to have so many free things to do. Here in my small city on the prairies of Canada about the only free thing to do is go to the library.

    God bless.

  7. I consider myself fortunate to have grown up with a mother whose life style incorporated frugality, making something out of nothing, and not wasting, but without it being of a punitive nature i.e. when we left the room, we turned the light off if we didn't expect to return soon; we didn't let the water run, etc. Likewise, selective hand-me-downs and used items were useful. So, whatever standard of living we could afford then, or I have been able to since, has made living not that difficult -- adjusting to my income as might be needed and making the most of my surroundings has just been automatic. For example, when we were beginning our family and lived in Phoenix/Scottsdale area I found three nearby grocery stores -- weekly loss leaders were different for each -- paper goods at one, meat another, produce or canned goods the other -- just as you describe. So, can be interesting when we move to a new community to investigate what's available for all aspects of life.

    I currently enjoy living in a community offering many of the benefits you describe and others. Costs are increasing and recently I've encountered several completely unexpected ones developing, but despite our best planning we know life is full of the unexpected -- so I don't anticipate being unable to adapt to them.

    I'm glad you're content and happy where you are. Sounds like you're well-prepared in mind-set should you make another geographic change.

    Many years ago when my husband and I were young we sought an opportunity to move to the Denver area, but the employment opportunity was in the southwest. I have no desire to move now to "snow country" which I enjoyed in the Midwest during my youth. I really like where I currently live on the West Coast though my immediate family members live where the snow flies and temperatures fall. Time will tell whether I will complete my years "living in place" as has been my plan.

  8. Once housing is settled, living is pretty much the same everywhere we have been. We moved to Delaware because we wanted to be near the grandchildren- but did not want to pay Maryland taxes. I think we will be here about ten years. By then my kids will have twenty years in and will probably move back West. We will join them there!

  9. My husband and I retired recently and are happy retiring "in place"; our adult children are here, the climate is ideal, we like our house, we have friends and church here, etc. Most important for us is our children are here.

  10. When I saw that article, I thought the same thing. PLEASE don't move here. I moved from the ski touristy, high COL mountains (Steamboat) to Longview, TX. for a 10 mo job..much cheaper to live but hated the humidity), back to Colorado (Westminster) and absolutely love it. BUT...we rent because housing costs are too high (really small houses falling apart for 250,000?), rent is climbing quickly and I am happy we have a great place that is affordable and takes 3 pets, utilities are high, and trade labor, if you want something fixed is hard to find (because of all the new construction) and very expensive as well. On the plus side for us, I make a good wage at my dream job, my husband makes a good wage and is always busy because he is Finding deals is much easier here as you mentioned with thrift stores and loss leaders but can be a budget buster with having everything just a few minutes away. In Steamboat we only had a Walmart and 2 grocery stores but they had higher prices and catered toward the tourists not to mention 8.65% sales tax. Amazon was our friend....

  11. I enjoyed this column. I've repeatedly seen friends - at all incomes - move to lower tax areas just because of that and come to regret the lack of services and amenities. Then I wondered if they were just bored living with too many retirees who also flock to those places. Husband and I love places with life and young people and these more attractive places naturally have higher taxes. I'll give up an extra bedroom and eat at home more often to have a vibrant city/town with free cultural events.

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