Can You Really Afford to Live in Your Dream City?

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It finally happened. You've been offered a job in the city of your dreams. Or you're coming up on retirement. Or you're just sick and tired of the Midwest winters. Before packing up your belongings, however, consider these five factors to avoid having your dream move turn into a financial nightmare. (See also: How to Save on a Long-Distance Move)

A Dollar in Boise May Not Buy as Much in Dallas

To get a better handle on how living expenses — from groceries to a visit to the dentist — vary from city to city, use a free online Cost of Living comparison calculator. This tool will also give you an idea of what your income needs to be in order to maintain the same style of living.

The factors that make some cities more affordable than others varies. Kiplinger's compilation of the cheapest cities in the U.S. cites shows low grocery prices for some, low housing costs for others, and low medical fees in others. As Kiplinger's points out, however, cheaper living often goes hand in hand with less healthy economic conditions. (See also: Awesome Cheap American Cities)

Determine How Much It Will Really Cost to Hang Your Hat

Most financial experts agree that housing costs should represent 30% of your gross annual income. But to play it safe, some say to increase that to 35% to cover all the "a-la-carte" costs that come on top of the mortgage payment or rent — property taxes, utilities, assessments, or building/neighborhood amenities, like swimming pools or workout facilities.

Property taxes can be a significant factor affecting the cost of owning a home or condo. New York residents contribute the highest percentage of their income to property taxes, followed by New Jersey, Connecticut, California, and Wisconsin. On the flip side, Wyoming residents pay the least percentage (6.9%) of their income to property taxes. Alaska, South Dakota, Texas, and Louisiana round out the lowest property tax states, according to 24/7 Wall Street.

In addition, potential homebuyers need to consider maintenance costs, building or community assessments, and repairs (often hard to predict). Snow removal may not be a factor if you're moving to Phoenix, but your air conditioning costs may skyrocket compared to what you paid in Minneapolis! (See also: Costly Things New Homeowners Don't Prepare For)

Homeowner's insurance is required by most mortgage lenders. Average homeowners insurance rates are higher in states prone to extreme weather conditions or with higher building costs.

If you're planning to rent, ask the property manager or landlord which utilities or building amenities are not included in the rent, and make sure your budget allows you to comfortably cover these expenses.

Chart Your Commuting Course — and Costs

How do you plan to get to and from work, the grocery store, or the movie theater and what will it cost? The Housing + Transportation Affordability Index (searchable by city) factors transportation costs into the equation with its recommendation that your combined housing and transportation costs should be no more than 45% of your monthly income.

Looking for a place where you can walk, bike, or take public transportation to work? Check Walk Score's rankings of the best cities to live car-free.

If driving is your preferred (or only!) commuting option, take a look at how fuel prices stack up with the help of GasBuddy's gas price heat map or its list of average gas price by city.

Parking can put additional strain on your monthly budget — or not, depending on where you plan to live and work. A parking spot in a Chicago high rise could set you back $200 to $500 per month, but far less in Milwaukee, just 90 miles to the north. BestParking offers a searchable database of parking costs by city to give you a general idea, but be sure to check with individual buildings, which may vary widely in fees. And don't forget the vehicle permit stickers required by many cities.

Be Prepared for the Unexpected

Unforeseen expenses for homeowners come in many forms, from a leaky faucet to a leaky roof — and everything in between. Where you live can impact repair costs. The national average cost to hire an electrician is $380 per project, but only $213 in Myrtle Beach, and $398 in Seattle, according to Home Advisor. Any repair can put a strain on your wallet depending on the cause and the potential ripple effects.

Renters are not immune to the unexpected. Renter's insurance — often required by the landlord or apartment management company — is always advised. Sure, if the roof leaks, the landlord will fix it, but what about your computer, clothes, and other personal property? Renters insurance not only covers personal effects, but often covers living expenses should your apartment become uninhabitable due to a fire or natural disaster. Generally very affordable, renters insurance can start as low as $10 per month depending on your coverage. (See also: Saving Money on Home Repairs)

As the saying goes, "The best laid plans of mice and men often go awry." In this economy, that could mean your job.

If your dream city is a thriving employment mecca versus a job desert, you'll find yourself with more options if your company downsizes or your position is eliminated. MuniNet Guide provides a snapshot look employment trends by metro area. (Note: I am the managing editor of MuniNet Guide.) When considering the health of the employment environment, check both unemployment rate trends (which should be heading down) and employment growth rates (which should be heading up).

Do Your Homework

We are fortunate to live in times where information is more readily available than ever before. Take full advantage of state, city, and county websites, which can provide valuable information and links to help you research a move to your dream city. Being financially prepared can make your dream become a prudent reality.

Have you moved to another city or burg? Were you surprised by the cost difference (up or down) versus your old home town?

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