I live in **extreme **poverty (<$10K a year) in California.
My expenses (rent, utilities, insurance, food, etc.) are at least $3K a month.
I have cashed in almost all of my retirement fund and stock holdings.
I do realize that I am going to run out of money and be homeless eventually. I’m just trying to postpone the inevitable for as long as I can!
My question is:
Should I move somewhere cheaper, like Nebraska?
And if so, would it be more cost effective to buy a house (probably in the middle of nowhere) or continue to be a renter?
The rent in Omaha would be about half of what I am paying now, or I could buy a house for around $50K (which would use up almost all of my savings, but I wouldn’t have to pay rent each month).
Since I work remotely, I could technically live anywhere in the US as long as I have internet access.
It costs so much to move across the country, and I would be doing it myself (I’m almost 48 years old, if that matters, ha).
And maybe the winters would be so cold in Nebraska that my heating costs would skyrocket compared to what I’m paying now.
I don’t know how to weigh the pros and the cons with all these variables!
If anyone has any insight, I would appreciate it so much.
If you buy a home you have to pay for heat, water, electricity, insurance, and taxes. You also need to pay to fix anything that breaks.
The real downside of moving from a high COL place to a low COL place is usually that you lose your high COL job. If you can keep your job, I assume you WOULD do better financially if you moved to a cheaper place. Downside is that there would likely be fewer social services if you become homeless. But your odds of becoming homeless might go way down.
Is there a particular reason you picked Nebraska? I googled Cheapest States to Live, and Mississippiand Arkansaswere the two at the top of the list.
Personally, I’d be leery of buying if it wipes out all your reserves, especially since home ownership comes with its own set of expenses. But I like having a cushion.
If you can swing a move and since you can work anywhere, it certainly makes sense to me to head somewhere cheaper. Of course my free advice is worth what you’ve paid for it. Good luck!
In that situation moving would be a plus. Cheaper living is cheaper living. Public assistance could cover a good part of your costs as you would qualify for full medical with your income.
On the other end of the money it’s better to be in more expensive areas. You can live very well locally, but if one aspires to be a world traveler is harder in the poorer areas though your standard of living may be the same at home.
If you could buy outright, in your situation if you had no future prospects, I would look for a trailer (mobile home) on the cheap but on it’s own land (no park fees). It’s not high end living but you do get a lot of cheap space, and cheap repairs of your cheap crap that will break. But all and all living expenses will be less then a real house. You will pay far less in taxes as well.
If you are very frugal, and have no major expenses you may just be able to make it on 10K + public assistance
Obviously I don’t understand all the intricacies of your financial situation and employment, but if you are making less than 10K a year, I would NOT buy a house. I recommend renting somewhere cheap (your choice) that has a decent job market (in other words, not in tiny dead town in Kansas). I would recommend living the cheapest you can off of your savings and plow 100% of your spare energy into finding a better job.
I’m a big advocate for people who can’t afford to live in California to leave. Especially if you can do your job remotely.
It makes no sense to me to live poorly in paradise as opposed to living better in a less attractive place. Some people prefer to live poorly in paradise; which is fine and their choice as long as they don’t complain to me about how tough it is to live there.
You should move. Use your internet access to find a rental place somewhere cheaper, than buy a bus ticket, bail out of your $3k a month living expenses and use those to fund your trip and set up where you can survive. You can buy a house later when you get set up. I’d also look into side gigs or other jobs that pay better. $10k a year means you are underemployed, and working at McDonalds or WalMart probably pays better. I’m not clear why you aren’t able to receive better pay than that.
Or, if you prefer to be homeless in paradise, thats an acceptable choice too; just not one I would make.
I was raised in California. I wanted to buy a home of my own, but knew that I would never be able to afford it on my librarian salary. I quit my job, packed up my cats and moved to Arizona. It was tough the first year, but it was a very good decision for me.
The reason to live in a high cost-of-living area is because you’ve got a high-paying job there. If you don’t have any job at all and are just living on your savings, you want to be somewhere cheap. If you have a job that just isn’t paying enough, then it depends on what job you’ll be able to get in a cheap area.
There are lots of places where it’s possible to live on $10,000 a year. Would you still be making that, if you lived in those places? If so, move to one of those places.
To think about it systematically, it seems like the +/- cost factors for you to consider would be:
[ul]
[li]Housing cost, which you already mentioned.[/li][li]Property Taxes if buying - I found out that property taxes on my CA house were lower than my mom’s much cheaper condo in MI.[/li][li]Sales taxes[/li][li]Income taxes - Some states have no income taxes, but at your income level you probably don’t pay anyways, so that’s not a factor?[/li][li]Utility costs - You are right about Nebraska, paying for heating in a northern climate can eat up a lot of money.[/li][li]Vehicle expenses - Gas, Insurance, maintenance - some climates are worse on cars than others, and insurance is different everywhere.[/li][/ul]
That’s just off the top of my head.
I would think anything else would probably be essentially the same: cell phone, cable, food, clothing.
Regarding the notion of paradise, there are a lot of very nice places all over the country. CA in general does have a lot to offer, but if you are not a surfer you can probably find better in a lot of other places. I say this as someone who lives in LA, but has traveled around a lot.
I’d recommend buying a 2 bedroom condo in theoutskirts of a large city in the midwest. Generally condos are cheaper and have lower utility costs. I’ve seen them start at about $40k.
For a condo, you’re looking at maybe $200/month in condo fees, taxes and insurance outside of the mortgage. Plus maybe another $200 in utilities. If you’re willing to bring in a roommate, the roommate can cover the costs. Then you just have health insurance, transportation, food and whatever misc costs you have.
This is what I did almost exactly. I was in a bad financial situation, with very little income and $50k to my name from my house sale. I moved to a lovely Midwest college town, bought a condo for $40k. Mortgage was about $350 a month and I picked up a roommate who paid $250/month in rent and half the utilities.
Leave California, it’s not worth it. It’s a no brainer to me. If you stay, that pretty much validates that you would prefer to be less financially secure in your current situation, than make a change…certainly a valid choice for you if that’s what you want.
In my experience, in low cost of living areas, its a bad idea to take on a roommate unless that roommate is a college student.
College students can be both poor and responsible. However if you live in a low cost of living area and look for a roommate who isn’t a student, I get the impression you’re more likely to get someone dysfunctional.
So moving to a college town, if OP is looking for a roommate, could be a good idea. Also college towns have many of the benefits associated with California. Lots of art, culture, restaurants and educated people.
I hope someday they figure out how to get solar energy in condominiums for the masses. Solar energy and electric cars will reduce cost of living even more.
Forgive me for being curious. Can you determine why, as a medical transcriptionist, you are only making less than $10k a year, when the median salary is in the mid 30’s? I suspect there just isn’t enough business to work enough hours, which should leave you plenty of time to find extra work, and make your situation less tenuous.
That sounds perfect. Oh, wait, because it’s what I did! Though instead of condo, substitute “Rent an apartment, then get a roommate*, then a wife, then buy a *Good Thing It’s Cute Cuz It’s Pretty F’ckin’ Small *house”.
Mortgage was less than $400/month, now it’s 500 because we keep taking out 2nd/3rd mortgages to pay for things like remodeling, college and a wedding. We could’ve gotten a much cheaper house by moving twenty miles out and living in a small town, but I love being “downtown” near campus. I can walk to great cafes, bookstores, museums and bars.
*Roommate-wise, some college students can be irresponsible and late night partiers. But there’s an easy rule to insure you get a good renter: only take grad students. Or even better, doctoral students. They’re more mature, studious, will spend too much time in the library or a lab… and have no time for friends, let alone a party.
IME most people come out ahead, financially, living somewhere cheaper. Even more so if you’re working the same job. That comes with many caveats. And there are non-financial reasons that may not be optimal.
I know all of the employment websites say that a medical transcriptionist should be earning around $30K a year, but those types of jobs are extremely scarce.
I did earn $28/hr when I worked for a University Hospital about 8 years ago. However, I was laid off after 4.5 years, and it’s been rough making ends meet ever since.
Until a few months ago, I was working full-time from home for a medical transcription company in Illinois. It only paid minimum wage but they provided health insurance and a little bit of paid vacation time. The company went bankrupt around Christmas, and then I was hit with a $250- rent increase. Ugh. But I digress!
Transcription is such a dying field. Everything is becoming automated. Most of the doctors use voice recognition software (like Dragon Naturally Speaking) now, and it is pretty accurate most of the time. Or, the work is outsourced to India, which is much cheaper than having it done in the US.
One of my ex-supervisors lived in Omaha, and she loved it there.
I went to Nebraska for a week last August, and I felt like it was a good fit for me. The people were so friendly and I enjoyed not being stuck in traffic all the time! I’m an architecture and history geek, too, and the houses have so much character in the Midwest. Just breathtaking!
I’m not opposed to considering Mississippi or Arkansas; in fact, I will start doing some research on them right now!
The bottom line is, I’m really scared. It’s hard for me to make such a huge decision and not have a support system to fall back on.
So why are you sticking with a dying profession? Even a job at Starbucks or McDonalds is going to pay better than that. (Well, not right now, but maybe when things get back to normal.)
Exactly what’s cheaper in the “cheaper state”? Cost of housing? Cost of goods? Property taxes? State sales tax? Local sales tax? State income tax? Lower fees for government services (car registration etc)? Cheaper health insurance?
Does the “cheaper state” also provide less? Quality of public schools? Social safety nets? Subsidies? Medicaid expansion?
Hey, you’re welcome to my neck of the woods! I’m in Iowa, but pretty close to Omaha, NE (90 min away). While I wouldn’t look to home ownership on $10k a year, you could rent something without too much difficulty (with or without room mates).
I live in a smaller city than Omaha, but still mid-sized (about 120k people). I pay $550 a month for rent while is on the lower side of things (I previously paid about $820 for a much, much nicer apartment). My car cost me $6900 for a 2009 in pretty good shape (purchased at a dealer - you could get a LOT cheaper privately, but I like the protection of a dealership).
I think moving would be a good idea, especially if you’re able to rent a uhaul or penske and drive yourself and your things over. If you’d like, working from home would also give you a chance to work another job part-time. Finding that kind of job with COVID-19 going around might be tricky, although I think some food places are doing so well they’re hiring for delivery. It’s just an option though.
Again, I’m not IN Omaha, but I feel I’m close enough to give you an idea of what expenses might be like in this area. Omaha would likely be a little more expensive than here, at least if you’re looking for something right in the city, but it’d be a HELL of a lot cheaper than where you are now. Even if you don’t enjoy the area quite as much, I feel it has to be insanely stressful to constantly be wondering how you’re going to pay for, well, anything. Could be really worth it to regain your footing, save up some money, and then figure out where you’d like to go from there
