100 Words On: The Best Way to Make Ends Meet on a Limited Income

Where you live becomes more important as household income decreases. For example, when taking into account food, utilities, healthcare, housing, and general goods and services, New York City is more than twice as expensive to live in than Pueblo, Colorado. So while residents of both cities may struggle in minimum wage jobs earning $15,080 annually, the Big Apple denizen has less than half the purchasing power of his Rocky Mountain cousin.

The bottom line: If your income is tight, finding a locale with a lower cost of living is a surefire way to improve your quality of life — even without a raise.

Photo Credit: jdolenga

22 comments to 100 Words On: The Best Way to Make Ends Meet on a Limited Income

  • Yes but NY City might offer more odd jobs than Pueblo, Colorado. I live near Boston and the rent may be more than any place on earth.

    • Len Penzo

      I think that is valid with higher paying odd jobs where specialization becomes more of a factor as wages increase, but I suspect that’s not as much of an issue when dealing with low-wage or minimum-wage jobs where minimal unique skills are required.

    • Entity325

      as a Coloradoin, I can’t imagine why anybody would ever want to live in a place like New York, particularly New York City.

      That said, we’re currently being invaded by hostile Californians who move here to get away from the high living costs and pollution, then drive huge vehicles they can’t afford, ignore the traffic laws, and vote up the cost of living, so the more people who don’t want to come here, the better.

      It’d be different if more of them were people like Len.

  • I’m under the impression that wages generally reflect the cost of living in that area. If you have a job that’s mobile, allowing you to work from anywhere, this makes sense. Otherwise, I’m not so sure it’s this simple.

    • Len Penzo

      That is true, Steven, but I am talking about folks who are earning wages at or near minimum wage.

    • Todd

      While workers generally earn more in costly areas, the difference in salary does not come close to paying for the increased expenses.

      According to the NYT, someone making $50,000 in Houston would have to earn roughly $132,000 in NYC to live the equivalent middle class life. Assuming you remain in the same profession/ job title, the chances of raising your income by a commensurate amount are low.

  • if you have family in a particular area, you may move in with them vs.just moving to a lower cost area. There are generally many more opportunities for work in major cities vs. a lower cost area.

  • I like Krantcents answer. I don’t want to move unless it’s a last resort. We put down roots and it’s too difficult to move.

  • I’ve lived from CA, to IN, to OH, to PA and cost of living is a key contributor to wealth creation. But in reality, the higher cost of living areas are higher for a reason! (More fun activities, culture, opportunities) And, high cost of living areas have lots more traffic.

  • Easy to say. Even if you can find a place where is cheaper to live, that doesn’t mean you can find a job their to sustain your expenses.

    • Len Penzo

      If you’ve only got a minimum or near-minimum wage job, I disagree. If those jobs were tough to come by, they wouldn’t be paying so poorly in the first place.

  • seems like this would be an aspect to take into consideration when making retirement plans.

  • I think it is always an option if one hits the deadend. But it sounds like a very depressing option (at least to me – I am a big city girl.)

    • Len Penzo

      Everything in life is a trade, Aloysa. It all comes down to whether you prefer improved standard of living or the excitement that comes with living in a bigger city!

  • This makes a lot of sense. When we lived in Maine, most of our living expenses were fine but our health insurance premium was killing us. We ended up moving because of it. I hope this helps to lead others to find ways to make the most of their lives and find something that works.

  • Michelle

    I live in a small town and the cost of housing is not lower than the “city” 80 miles away. In fact there are fewer options on the market. It’s difficult to get electricians/plumbers/skilled craftsmen etc. The cost of our gas, food and household supplies are higher reflecting the extra delivery cost to get it here. We have to drive into the city for anything but the most basic medical services. Ditto for vet, legal, accounting, beauty, physical therapy, movies, shopping, restaurants (we have just a few), etc etc. In a larger city, you may be able to get along without a car or maybe rarely even need one with public transportation and ammenities within walking distance. In the country if you don’t have a car, you are litterally stranded. So do your research before you move!

    • Len Penzo

      Well, if you live in the middle of nowhere, Michelle — and it sounds like you do — then I can see where the cost of living may be more than living in some cities.

      But do you think your cost of living is more expensive than living in, say, New York City, San Francisco or Washington, D.C.?

  • [...] Retire By 40 – What we Spend on Coffee, Gas and More Oblivious Investor – Tax Exemptions vs Allowances 101 Centavos – Kiss Real Estate Goodbye Financial Uproar – Kiss Ethics Goodbye Len Penzo – Making Ends Meet w Limited Income [...]

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Question of the Week:

Sorry, there are no polls available at the moment.