Savings are mixed in move to country

Value Judgments

Your Money

August 08, 2004|By JANET KIDD STEWART

DOES IT really pay to move to a lower-cost city?

A year ago, my family left the Chicago area for rural Wisconsin. A job opportunity for my husband, Todd, and the chance to slow down the pace of our dual- income lives lured us to Marshfield, a city of about 18,000, whose main tourist attractions are the annual Dairy Fest and the worldM-Fs largest round barn.

The main attractions for us were a lower cost of living, an easy commute and good schools. We knew going in, though, there would be tradeoffs. WeM-Fd be giving up lastminute Cubs games, excellent restaurants and a network of close friends and family nearby. And thereM-Fs that indefinable web that a city like Chicago spins into your soul. After nearly 20 years there M-y almost our entire adult lives M-y would we ever feel connected in a new place?

The juryM-Fs still out on that last question. ItM-Fs too early to know if one day those quaint dairy cows standing motionless in the pasture will stop representing a peaceful life and start representing mind-numbing boredom.

As for the financial end of things, itM-Fs definitely paying off. Todd was finishing medical training in Chicago, so our household income increased by more than half, despite my giving up a full-time job to be a freelance writer working from home.

And with greatly reduced baby- sitting and almost no commuting expenses, our work-related costs are way down, though other costs are higher. All in all, we spent 10 percent less in the year since the move, and that includes payments on a home under construction as well as a rental.

Beyond those bottom-line numbers are some caveats worth mentioning for anyone contemplating an escape from the rat race. Oddly, weM-Fre spending more on dry cleaning, despite a fairly casual-dress work environment for Todd and my no-shoes-required work environment.

Lesson No. 1: Some things are cheaper in a small town, but some things cost a lot more. That applies especially to bigger- ticket items like cars and home appliances, and you may have to deal with pressure to buy locally. In a small town, your sonM-Fs baseball coach may be the car dealer.

Frank Levering and Wanda Urbanska left Los Angeles in 1986 to take over a cherry orchard in North Carolina that belonged to FrankM-Fs family. Today, the orchard is profitable and Wanda this summer launched a series of television shows called Simple Living with Wanda airing on Public Broadcasting Service stations. In 1996, the couple published a little book called Moving to a Small Town about their experience.

M-tThereM-Fs something that changes in a small town. Not every transaction is monetized. I donM-Ft haggle with our local car dealer over his price for an oil change, but he was also the guy who donated a production car for our television series,M-v Urbanska said.

Which brings me to Lesson No. 2: Housing can be a black hole for your money if you move to a lower-cost area. We built a much larger home here for about the same money as our suburban Chicago house, even though we could have saved a bundle by getting something comparable to our old place. We rationalized by telling ourselves we wanted our main priority to be our home and a relaxing family environment. And the house payments M-y our only debt M-y still wonM-Ft exceed the recommended 25 percent of income.

Lesson No. 3: WeM-Fre spending less on restaurants, but our travel budget skyrocketed. WeM-Fve been making up for all those years of forgoing trips because of little cash and time.

Lesson No. 4: DonM-Ft forget about taxes. Our state income tax rates doubled and property tax rates are higher, too, but the sales tax is lower.

The upshot: Small-town life can indeed be cheaper and less stressful, but itM-Fs not a slamdunk. Taking a huge pay cut on the expectation youM-Fll spend far less is a recipe for disaster, unless youM-Fre truly going from one extreme to another, say from Manhattan to Mississippi, and will alter your spending accordingly.

E-mail Janet Kidd Stewart at yourmoney@tribune.com.

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