Reader Case Study: From Brooklyn to LA With a Baby
We’re headed to Brooklyn, NY this month to talk future plans with a young couple and their two-month-old infant. The FrugalBrooklyns, as they’d like to be called, are loving their new roles as parents and, while they enjoy life in the Big Apple, are plotting a cross-country move to Los Angeles, CA.
Case Studies are financial and life dilemmas that a reader of Frugalwoods sends to me requesting that Frugalwoods nation weigh in. Then, Frugalwoods nation (that’s you!), reads through their situation and provides advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study.
I also provide updates from our Case Study subjects at the bottom of each Case Study several weeks/months after their story is featured. To see what past Case Study participants have decided to do, check out the Case Study section and scroll to the bottom of the individual posts.
I probably don’t need to say the following because you all are the kindest, most polite commenters on the internet, but, please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not to condemn.
With that I’ll let Mrs. FrugalBrooklyn, this month’s case study subject, take it from here!
The FrugalBrooklyn’s Story
My husband, Mr FrugalBrooklyn and I (Mrs. FrugalBrooklyn) live in Brooklyn, NY–as you might’ve guessed–and had our first baby at the end of December. We’re both urban planners: he works for a government agency and I’m at a non-profit.
My husband is 35, I’m 33, we met in NYC, and got married in 2016. We have many different hobbies and interests, which is probably why we enjoy living in the big city. We love the outdoors and like to surf, ski, run, bike, hike, and sail. Traveling–both within the US and internationally–is another of our hobbies.
Additionally, we’re pretty social and have friends and family all over the country and the world. Community involvement is also important to us and we’re both involved with transportation and social justice advocacy and volunteering, and are active in our professional careers through trainings, networking, and professional development.
All that being said, Mr. FrugalBrooklyn is more of an introvert, which has been a good influence on me because it’s given me the opportunity to be more mindful of the time I spend outside the home. Reflecting on this means that I now spend more time cooking and doing things around the house than I used to before we got married, which is nice.
The Brooklyn to LA Move Plan
We plan to make a cross-country move to Los Angeles, CA by the fall of 2019. Our rationale for this is that LA is cheaper than NYC, closer to my side of the family, and has more job opportunities for urban planners. We’ve casually thought about financial independence but haven’t really made any moves towards that. Additionally, we would like to start trying to get pregnant with our second child around June 2019, so hopefully I’ll be early in my pregnancy by the time we head to LA, but the specific details for that part of our lives are less important. While this is our future plan, we want to continue living in Brooklyn for another two years.
We selected fall 2019 as our target move date because my current job has a contract with the city which would be ending then. However, since having our first baby in December, my plans for heading back to work may be shifting (see below for more). In light of this, perhaps we should consider moving sooner. The biggest factor is that we want to secure at least one job before making the move. We believe that my husband will be able to find a job with a salary of $120,000/year and that I’d find a salary of $80,000/year in LA (for comparison, we currently earn $99,000 and $62,500 respectively). The jobs that we should be able to obtain, plus our work experience, plus the lower cost of living in LA would all increase our quality of life.
Where In LA?
We’d really like to buy a home in LA and the location of this home will depend on where we end up working. We love transit-friendly, kid-friendly areas and we like the ocean and hiking. Since we’ll be coming from NYC, a walkable, central, transit-friendly neighborhood would be ideal. Of course, public school quality is also a major consideration. We like Los Feliz if our jobs are in downtown LA or nearby. Santa Monica looks like a good option if our jobs are located near the western part of the city.
I think our LA homebuying budget will be around $800,000 since it’s a high cost of living area, especially if good schools and good transit are taken into consideration. Realistically, we can probably buy a small-ish condo with that budget.
The Car Question
If we move to LA, we will obviously need a car out there and we are leaning towards buying or leasing a car while we’re still in Brooklyn. It would help to have a car now to visit my in-laws, who are easily drivable but not located in an area that’s public transit accessible. We’re considering the various ways to own a car from buying used to leasing a new car. Additionally, we need to think about the best way to save money in terms of insurance, maintenance, and parking fees.
Many New Yorkers with cars choose to park on the street and move the car for street cleaning, which happens once a week in our neighborhood. We lean towards paying for parking in a nearby garage or renting a space from a homeowner who has extra space in their driveway. This would likely cost $150/month. Another option we could try is a “car share” with another family in our neighborhood whereby we charge neighbors through an app to use our car when we’re not.
Staying Home With Baby vs. Going Back To Work
After having our first baby in December, I am strongly considering staying at home for at least six months instead of the three months I originally intended. I hope my current employer will be OK with this leave extension. The first three months are paid leave (4 weeks at 100% salary, which I was able to do through saving on vacation days, work provided paid leave and 8 weeks at 50% salary, which was paid for by the new NY state Paid Family Leave policy). The next three months would be completely unpaid.
We crunched the numbers and through frugality–it’s amazing the options and freedom frugality gives you!!!–we can definitely afford me staying home for more months, we would just be saving less. Another consideration are childcare expenses. We’re interested in having a nanny, which would likely run us $2,500-$2,800/month. There’s also the possibility of using a nanny share, where either I work part-time or from home and the nanny works part-time or we share a nanny full-time with another family. There are opportunity costs and benefits cutting both ways with this decision.
I’m wondering about ways to maximize the frugality of me staying home longer with the baby. I was thinking perhaps this would lead to more home-cooked meals and greater frugality in our grocery spending. But maybe there some hidden frugal benefits of me staying at home versus working that we can consider. Some of my thoughts on this are that: work clothing would be less important, some discretionary spending would be reduced since I wouldn’t be in Manhattan in an office distracted by cafes and random city spending.
Also, I wonder if I should take even more time off (perhaps nine months or a year) and use that time to either find a better paying job and/or start a business venture? On the other hand, I wouldn’t want too big of a gap in my resume as it might reduce my earning potential in the future. If we can be even more frugal with me staying at home with the baby, it would give us more options in terms of what kind of paid work I could pursue in the future.
Where the FrugalBrooklyns Want To Be In Ten Years:
- Finances: In ten years, we’d like to have 3 times our annual income in retirement savings. Right now we have one times our annual income. It would be nice to have a solid downpayment for buying a house in LA and great if we could buy a duplex and rent out the second unit. We’d like to stay in LA for around a decade and then most likely return to New York City when the kids are a bit older and ready for high school. Mr. FrugalBrooklyn wants to run for political office in NYC, hence the return to NYC in order to develop that aspect of our lives.
- Lifestyle: We’d like to own a home in the Los Angeles area, continue to travel with our children, and continue to be physically active, active in our community, and living a healthy lifestyle.
- Career: We don’t have defined goals, but some ideas we have are to be managers of some sort, to do something entrepreneurial, and generally increase our level of expertise and professional development. That could mean working in an office, working from home, or some variation. We don’t have goals to necessarily retire early, but it would be nice to have the financial security to allow us to develop our careers without worrying about our finances.
Mr. and Mrs. FrugalBrooklyn’s Finances
|Mrs. FrugalBrooklyn||$2,443.54||After taxes, transit pass, and IRA/Brokerage contributions, which are not sponsored by my work, but something I save independently. My employer does not offer a 401K/403b.|
|Mr. FrugalBrooklyn||$3,967.26||After taxes, pension, 457b (government equivalent of a 401k), college savings (529), and health insurance contributions.|
|Rent||$1,749||750 square foot one-bedroom with a dining room that we use as a “spare” room. Pretty affordable for NYC/Brooklyn!|
|Travel/Vacation||$650||We tend to go on one international trip/year, one west coast trip/year, and a few local surfing & skiing trips/season. We have a JetBlue Travel Rewards card.|
|Groceries/Pharmacy||$450||Costco, Trader Joe’s, CSA in the summer/fall|
|Health/Fitness/Co-pays||$185||Co-pays due to my pregnancy make this a higher amount this year than is typical|
|Household supplies and laundry||$100||Laundry, Target, Bed Bath & Beyond, and household supplies such as laundry detergent, cleaning supplies, towels, etc|
|Restaurants/Bars||$100||About 1 restaurant and 1 bar/month|
|Personal/Professional Development||$75||Conferences & Trainings|
|Utilities||$50||Electricity and Water (Building Management pays for gas)|
|Internet||$50||Internet-only plan through Optimum|
|Mrs. FrugalBrooklyn Discretionary||$50||After-work networking & social/work lunch outings/coffees|
|Mr. FrugaBrooklyn Discretionary||$50||After-work networking & social/work lunch outings/coffees|
|Gifts||$50||Birthday & Holiday gifts – we have a pretty big family|
|Clothing/gear||$40||Usually winter/fall clothing, some maternity clothing (most maternity clothes were hand-me-downs)|
|Personal Care||$35||Haircuts, face wash, lotions|
|Transportation||$20||Mostly uber/lyft and transit fees. This is so low because my husband’s office reimburses his transit pass and I pay for mine as a pre-tax deduction.|
|Cell Phone||$0||My parents pay for my cell phone and Mr FrugalBrookyn’s parents pay for his. We don’t want this to continue and would like recommendations on low-cost cell phones and data plans.|
|Total Monthly Expenses:||$3,804|
|IRA & Roth IRA||$84,127.88||Combined total for Mr. and Mrs. FrugalBrooklyn|
|457b (Mr. FrugalBrooklyn) and 401k from a previous job of Mrs. FrugalBrooklyn’s.||$28,283.37||No match offered by employer. Mrs. FrugalBrooklyn’s current employer does not offer a 401K.|
|Pension (Mr. FrugalBrooklyn)||$21,092.80|
|College Savings (529)||$722.69|
|Cash (High Yield Savings Account)||$27,324.07|
Mrs. FrugalBrooklyn’s Questions For You
- Given that we will be in Brooklyn for two more years and live a moderately frugal lifestyle already, we want to know how much more we could cut from our spending. We’ve had trouble getting to the next level of frugality; for example, we still spend a good amount on eating out and I think our grocery bill is too high. Since we just welcomed a new member of our family, I want to see if we can trim more in order to get to a higher savings rate (our average savings rate is currently about 41%). What would you suggest?
- Should I consider a longer leave to stay home with our baby? How might this impact my future earning potential? What efficiencies could be created by my staying home? If I do stay home, should we consider moving to LA sooner rather than later?
- How should we go about procuring a car? Buy used? Lease new? Any tips on how to be economical and practical regarding parking in the city?
- Would it make sense to then sell the car when we move to LA or should we use it to drive to LA for our move? I see two scenarios: 1) we move all of our stuff via moving company; 2) we sell all of our furniture and start fresh in LA, thus necessitating we drive ourselves cross-country. Which would be more economical?
Mrs. Frugalwoods’ Recommendations
First off, mad props and gigantic congratulations to the FrugalBrooklyns for: 1) being debt free! 2) having a healthy emergency fund! 3) saving for retirement! WOO HOO!!! These are the first three tenets of being a financially responsible person in the world and they are killing it. Way to go!!! If you are reading this right now and do not have those three things on lock down, start working towards that magical trifecta immediately. And now, let’s dig in!
The overarching imperative that comes across as I read the FrugalBrooklyn’s story is that they need to prioritize their goals and aspirations. I LOVE that they are thinking longterm and planning out where they want to be financially, in terms of having kids, and geographically. However, I think they’re at a crucial juncture right now where some prioritization will serve them well. The FrugalBrooklyns have several major life goals on the horizon:
- Potentially having Mrs. FrugalBrooklyn stay home with their baby
- Buying a car
- Moving cross-country to LA
- Buying a house in LA
- Having a second child
- Moving back to NYC in ten years
- Running for political office
Whoa buddy! That’s a lot of big goals! All of them perfectly fine and all of them well-articulated by Mrs. FrugalBrooklyn. The challenge is that they don’t currently have enough money to fund all of these dreams. And that is not a bad thing–it gives them something to work towards! However, the rapid timeline in which they’re discussing losing an income, buying a car, moving cross-country, and buying a house just isn’t financially feasible with their funds on hand.
Dreams Cost Money
At present, the FrugalBrooklyns have $32,801.03 in liquid (non-retirement) funds. This is a fantastic amount of money to have saved up and they should be proud!! However, we need to break down the costs they can expect to incur with their near-term goals.
I’ll address staying-home-with-baby and buying a car in just a moment. First, I want to turn my attention to the move-to-LA plan. Primarily I question if this move would really lower their cost of living. While LA is a tad cheaper than NYC, it is by no means a vast departure from high cost of living. Both NYC and LA are listed among the top ten most expensive cities in the USA.
I did note that the FrugalBrooklyns posit they’ll increase their gross salaries in LA from $99K to $120K/year and $62,500 to $80K; however, this is only a total gross increase of $38,500 (which’ll be much less after taxes and other deductions). On top of that, the FrugalBrooklyns are looking at dramatically increasing their housing costs. They currently pay really inexpensive rent, which is allowing them to save at a fairly high rate every month.
Buying A Home In LA
Mrs. FrugalBrooklyn said that their homebuying budget for LA is $800,000. For a purchase price of this amount, assuming your mortgage lender requires you to put 20% down, they’ll need $160,000 in cash saved up, plus another 2-5% of the purchase price for closing costs, which for $800K would be $16,000 – $40,000. That means the FrugalBrooklyns would need a grand total of $176,000 to $200,000 saved up in cash.
Even if they’re able to find a great mortgage interest rate that’ll allow them to put down less–say just 10%–that’s still $80,000 in cash for the downpayment plus the $16,000 – $40,000 for closing costs, for a grand total in the neighborhood of $96,000 – $120,000. Now, these are totally doable amounts of money to save up on their salaries; however, I’m not seeing how that’ll be possible in their under-two-year timeline.
Another good data point to keep in mind is the hefty monthly mortgage payment that an $800,000 home will levy. I used this online mortgage calculator and input the data points of a 4% interest rate on a 30-year fixed-rate mortgage with 10% down on an $800K home and learned that the monthly mortgage payment would be $3,437.39. However, it’s crucial to note that this total does not include homeowner’s insurance, PMI, property taxes, or home owner’s association fees (Mrs. FrugalBrooklyn said they’d likely be able to afford a condo, many of which come with monthly HOA fees). Using that same online calculator, I input estimates for all of those figures and came out with a total monthly cost of $4,979.06. This is obviously not a precise estimation, but it’s a good approximation of what their monthly outlay would be on a home in the $800K price range.
This is a vast departure from their current monthly rent of $1,749. What this total also neglects to include are utilities (at present, some of their utilities are covered by their landlord), maintenance (as the owner of two homes I can testify that something is always breaking), upkeep of the yard, and sundry other homeowner expenses. I’m not saying all this to deter the FrugalBrooklyns from their dream of home ownership, but I do want to provide a serious reality check on the actual costs. If their goal is to enjoy a lower cost of living, I’m just not sure that a move to LA–and the purchase of a home there–is going to facilitate that dream, especially in light of the fact that the LA salaries they cited aren’t a tremendous increase over their current salaries. It seems that with that level of downpayment and monthly mortgage, the FrugalBroolyns would make themselves quite house poor with very little–or nothing–leftover for savings, travel, or flexibility.
Thinking Hard About Moving To LA
The other red flag for me here is their plan to move back to NYC in a decade or so. While it’s possible their LA home would appreciate in that timeframe, there’s no guarantee that it will, and it’s a lot of cash (and hence a lot of opportunity cost) to tie up in a house in the meantime. Additionally, I’m not clear on the feasibility of running for political office in NYC after living in a different state for a decade. Admittedly, I am no expert in this area, but I believe that living in district for a period of time is considered advantageous, if not mandatory, for political campaigns. Just another factor to consider if running for office in NYC is a true goal.
Furthermore, I wonder about their desire to move back to NYC when their kids are in middle/high school. Having moved myself in the 6th grade, I can tell you that this is a moderately traumatic time to move for a kid and I wasn’t too thrilled about it. Granted, I turned out fine, but it is something to consider. Moving little kids is much less of a big deal, but once kids are entrenched in school and friend networks, it represents a much larger disruption to their lives.
I encourage the FrugalBrooklyns to ponder this move very carefully and consider if it will actually meet their goals. Additionally, I want to point out that I’m a firm believer in living where you want to live, regardless of the cost of living. And if they truly desire to live in LA, then go for it! However, the fact that they would eventually be moving back to NYC makes me question the rationale for moving out to LA. If what they’re looking for is a lower cost of living locale for a decade before moving back to NYC, I encourage them to research lower cost of living cities where urban planners are in demand. LA is not a cheap place to live, but it’s worth it if that’s where they want to be regardless of the cost of living.
Buying A Car
If the FrugalBrooklyns make the move to LA, I think car ownership is an inescapable fact of life in LA and they should definitely budget for the purchase price, maintenance, insurance, gasoline, registration, repairs, parking and all the other fun expenses that come with car ownership.
They noted an interest in buying a car while still in Brooklyn, but it doesn’t sound like they’d use a car all that often in the city. I’m wondering if they’ve explored instead getting a ZipCar membership to use for their infrequent car trips in the city? Alternately, renting a car from an old school rental place might be another economical option. Cars are expensive to own–even when you’re not driving them–and I’m not sure they need to go whole hog on car ownership while in Brooklyn.
If, and when, they do decide to purchase a car, I cannot recommend highly enough that they buy a used car. I have several posts devoted entirely to this topic because buying or leasing a new car is truly one of the worst financial decisions you can make. I don’t come down that hard on too many things, but I do on cars. Briefly, buying a new car is like shooting yourself in the foot not once, not twice, but three times. Here’s why:
- The mark-up on new cars is astronomical.
- The opportunity cost of buying a new car–even if you pay cash–is profound.
- Most car loans have interest rates, which means you’re spending even more money on a majorly depreciating asset.
I won’t rehash the whole argument against new cars here, but will instead direct you to the following post: Why We Buy Used Cars And You Should Too.
In terms of parking in the city, if the FrugalBrooklyns decide to buy a car while in NYC, I highly recommend they try out street parking for a few months before making the decision to rent a garage spot. We parked on the street when we lived in Cambridge, MA and while, yes, we did have to move our car on street cleaning days and yes, sometimes it’s tough to find a spot and you have to walk a few blocks, it wasn’t really that much of a hassle. Mr. FW and I originally thought we’d rent a parking spot in Cambridge, but after testing out street parking for a few months realized it wasn’t that big of a deal–even with infant Babywoods in tow. Plus, $150/month on parking is a pretty darn big outlay of cash!
To Mrs. FrugalBrooklyn’s question on buying the car in Brooklyn and then selling it before moving to LA, I advise against this. Buying anything big–a house or a car–entails so many mind-numbing details (registering it at the DMV, getting it inspected, etc) and expenses that it doesn’t make financial or practical sense to go through all that hassle only to turn around and sell it and do the whole process over again out in LA. If they buy a car in Brooklyn, I advise they plan to drive it out to LA and use it as their car in LA as well.
Having recently bought two used cars as well as a house–with a tiny infant–I can speak from personal experience that I would not recommend that anyone make these transactions more complicated than necessary. I cannot tell you how much time and money goes into buying houses and cars–oh wait, I can! It’s all here on Frugalwoods! I’ll summarize thusly: moving, buying a house, and buying a car are all massive drains of time and money. No way around it. Even when you’re frugal about it, these are expensive, time-consuming, red-tape-filled, paperwork-explosion exercises to be done as infrequently as possible (in my opinion).
Staying Home With Baby?
This is a tough one. Mrs. FrugalBrooklyn summed it up perfectly when she said that there are “opportunity costs and benefits cutting both ways with this decision.” She is 100% right. Losing Mrs. FrugalBrooklyn’s income–possibly for just a few months–to allow her to stay home with their baby would represent a decrease of $2,443.54 per month in income. With her husband’s salary, and their current rate of monthly spending, they’d be saving just $163.26 per month. This means that it IS feasible–they wouldn’t be dipping into the negative, but it’s a massive cut to their savings rate.
On the other hand, as Mrs. FrugalBrooklyn sagely noted, a nanny share would cost them in the neighborhood of $2,500-$2,800/month, which would, in effect, eat up the entirety of Mrs. FrugalBrooklyn’s salary. However, that doesn’t necessarily mean that it would be more financially viable for her to stay at home.
As she pointed out, the opportunity cost of staying at home could mean a potentially harmful gap in her resume that could serve to stymie her future earning potential. Thus, it’s not just the cost of the nanny in the present moment that should be taken into account, but also the potential future earnings she might be giving up.
That being said, if Mrs. FrugalBrooklyn does decide to stay home, I would posit that there’s a lot she can do from home to stay current in her profession. She mentioned several times an entrepreneurial desire and this could be her time to pursue those ideas. While it’s not possible to work full-time from home with a baby, I’ve been able to successfully work part-time from home with a baby on both writing my book and doing the work I do here on Frugalwoods. Hence, don’t assume that no “work” will get done while doing the even-more-difficult WORK of raising a child.
Another factor to consider is the couple’s stated interest in having a second child fairly soon. Double daycare costs would push this decision over the edge and would make it more financially viable for one parent to stay home with the kids. Obviously, this second baby is still just a plan, but daycare x 2 is something to take into consideration when determining whether or not to stay home with baby #1.
Given the essential wash of this decision from a financial perspective, I strongly encourage the FrugalBrooklyns to assess this decision from a place of what feels right for their family. If Mrs. FrugalBrooklyn wants to stay at home with their baby, then that is what they should do. They can afford it and they should pursue this life path. Their frugal lifestyle has made this an option for them and they should take it if it’s what they want. This is the crux of why I encourage frugality: you never know what life will throw your way. Before their baby was born, Mrs. FrugalBrooklyn hadn’t considered staying home, but now that the baby is a reality, her feelings on the matter have changed. By living a frugal lifestyle, they’ve put themselves in the fabulous and enviable position of being able to make the decision they WANT to make, not the decision they HAVE to make based on financial imperatives. Congrats to the FrugalBrooklyns for creating this option for their family!
What I also have to point out here–and I hate to sound like the grim reaper of home buying–is that either decision regarding childcare will gobble up their savings rate, which, unfortunately, will delay their home buying aspirations.
Savings Accounts Side Note
One of the easiest ways to optimize your money is to keep it in a high-interest savings account. With these accounts, interest works in YOUR favor (as opposed to the interest rates on debt, which work against you). Having money in a no (or low) interest savings account is a waste of resources because your money is sitting there doing nothing. Don’t let your money be lazy! Make it work for you! And now, enjoy some explanatory math:
- Let’s say you have $5,000 in a savings account that earns 0% interest. In a year’s time, your $5,000 will still be… $5,000.
- Let’s say you instead put that $5,000 into an American Express Personal Savings account that–as of this writing–earns 1.70% in interest. In one year, your $5,000 will have increased to $5,085.67. That means you earned $85.67 just by having your money in a high-interest account.
And you didn’t have to do anything! I’m a big fan of earning money while doing nothing. I mean, is anybody not a fan of that? Apparently so, because anyone who uses a low (or no) interest savings account is NOT making money while doing nothing. Don’t be that person. Be the person who earns money while sleeping. Rack up the interest and prosper. More about high-interest savings accounts, as well as the ones I recommend, here: The Best High Interest Rate Online Savings Accounts.
I was excited that Mrs. FrugalBrooklyn requested advice on ways to reduce their spending because I love doing that in every case study anyway! With each case study, I always preface my advice with the caveat that everyone has to make their own spending decisions and everyone needs to decide what matters most to them and how they want to spend their hard-earned money.
I think that with the FrugalBrooklyns, we’ve identified a need to save more money–both to pay for childcare/a loss of a salary–and for their future plans to buy a car, move cross country, and buy a house. That being said, only they can decide what they want to eliminate and how that will impact their quality of life. They are also already doing a bang-up frugal job, so we are mostly trimming around the edges at this point. Here goes:
- Travel/Vacation: at $650 per month, this represents their largest area for saving. Eliminating this line item would net them $7,800 in savings per year. Plus, I can tell you from experience that traveling with a baby is not, uh, among the greatest experiences of my life… ;). Even a reduction in this category could represent tremendous savings for them.
- Groceries/Pharmacy: $450 per month is actually quite good, but could probably be reduced with some serious frugalization. I refer them to this post for guidance: Our Complete Guide To Frugal, Healthy Eating.
- Health/Fitness/Co-pays: $185 seems like a lot per month, but as Mrs. FrugalBrooklyn noted, this was higher due to her pregnancy. I imagine those co-pays should reduce now. If they are paying for a gym membership or similar, now would be the time to cancel that and explore the many and varied ways to exercise for free!
- Restaurants/bars: this $100 should be fairly easy to eliminate now that they have a baby on board ;). While we do occasionally take Babywoods out with us, it’s just not quite the same and having a kid can be a great motivator for enjoying at-home dinners and cocktails! That’ll be $1,200/year saved.
- Personal/professional development: I’m wondering if there’s any way to have this $75/month covered by their employers? Depending on what the specific costs are, seems worthwhile to explore if reimbursement is available.
- Discretionary: Hard to say since I’m not 100% sure what this encompasses, but seems like another area ripe for reduction. This would be another $1,200/year saved.
- Gifts: I’d say now is the time to embrace the ethos of frugal gift giving in order to reduce this $50/month (also known as $600/year) expense. Here are some posts for inspiration:
- Clothing/Gear: Time to enact a clothes-buying ban! This’ll be $40/month ($480/year) saved.
- Personal Care: Not a huge line item at $35/month, but could be reduced with home haircuts–here’s how for short hair and long hair.
Since the FrugalBrooklyns are gunning for quite a few expensive larger goals, and looking at a dramatic reduction in income through either childcare or the loss of one salary, I think carefully assessing every line item will be a help to them. This exercise will hopefully illuminate for them where they are spending in alignment with those longterm goals and where they can save more.
The other end of this equation–income–should also be considered and if the FrugalBrooklyns are able to find higher paying jobs, or take on side hustles, they’ll be able to save more and hence, reach their goals more quickly.
In summary, I advise the FrugalBrooklyns to do the following:
- Prioritize their goals. They’ve done a great job of outlining a lot of fabulous longterm plans. Now’s the time to crunch numbers and figure out what they can reasonably accomplish in the near-term and what will need to be delayed a tad until their savings can catch up with their dreams.
- Decide on childcare arrangements. Whichever path they choose–staying at home or hiring a nanny–that choice should be made soon. Mrs. FrugalBrooklyn should allow for plenty of time to discuss options with her employer and/or they should begin looking for a nanny (or nanny share) immediately. In hearing from my parent friends who live in the city, nannies and daycares often have lengthy (6 months or more) waiting lists and so they’ll want to get their names in ASAP if they do plan to hire out childcare.
- Assess the viability of moving to LA. How much lower will their cost of living truly be taking into account the possibility of buying a home? Owning a car and driving much more frequently? Planning for a move back to NYC at some point?
- Examine their needs for a car. Could ZipCar or car rental serve their purposes while in NYC? If they do decide to buy, I strongly encourage they explore the used car market and also test out street parking before paying for a garage spot.
- Look for ways to increase their savings (through spending less, earning more, or both). Whether they decide to pay for childcare or have Mrs. FrugalBrooklyn stay home, they’re going to experience a rapid decrease in their savings rate. At their present rate of spending, without Mrs. FrugalBrooklyn’s salary, they’d save just $163.26 per month. In light of their other goals, they’ll need to find more areas from which to trim expenses (and/or increase their income).
Ok Frugalwoods nation, what advice would you give to Mrs. FrugalBrooklyn? She and I will both reply to comments, so please feel free to ask any clarifying questions!
Would you like your own case study to appear here on Frugalwoods? Email me (email@example.com) your brief story and we’ll talk.
Update from Mrs. FrugalBrooklyn on 11/13/18:
Thank you to everyone so much for their amazing comments and ideas, which gave us a lot of food for thought! In general everyone’s comments helped us prioritize.
I’m happy to say that we were able to make some great decisions with everyone’s help:
- On LA versus BK- It helped so much to understand that LA will most likely not be cheaper than BK, and that we have a pretty good set-up here. That being said, we are still on the lookout for jobs in LA and still plan to move, because the job market for urban planning is on more of a growth trajectory and we do have family there. If it doesn’t work out, then we will be perfectly happy to stay in the NYC area and have looked at other parts of the region as well for potentially lower costs of living especially if we plan to buy.
- On buying a house in LA – we realized that buying a home in LA would not be a good financial move for us especially not anytime soon because housing prices are so high. We decided that if we move to LA, we would continue to rent a model apartment.
- On buying a car – we decided to buy a used car! A 2014 Subaru Outback, which was previously a lease, and had really low mileage and wear and tear. We paid in cash and realized that our frugality enabled us to be able to purchase the car!
- On childcare – we decided to do a nanny share, where we employ one nanny and she takes care of two children, which was a middle ground financially and care-wise between daycare and an individual nanny. I did decide to extend my maternity leave to almost 6 months, which was a really special time with our baby.
- On the job situation – I’m happy to report that I was able to obtain a better paying job upon return from maternity leave, which yielded a 15% pay increase! That’s been helpful for our financial situation.
- On expenses – we’ve kept many our costs down and are continuing to find ways to decrease our spending. In many ways, having a baby helps (eating out and entertainment costs have decreased) but we did go on a few cross country and an overseas trip, which added to our expenses. We don’t anticipate any big ticket traveling until next summer, so we hope to frugalize by traveling locally and frugally.
Thank you everyone for all your advice. We will continue to prioritize our goals and we are currently happy in Brooklyn so will continue being the FrugalBrooklyns that we are.
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You guys are killing it with savings! Also, it’s super impressive to see you guys have dreams, and are executing them!
I bought a brand new car last year, and it wa a huge mistake. Buy used with cash!
Also, it seems like you guys have a wonderful, full life in NYC making good salaries. If you plan to move back, why not just stay in Brooklyn? You have reasonable rent, won’t that be hard to find again if you leave? 🙂
PS move to Nashville where I’m at, and feel free to come cook for me 🙂 all that food looks delicious!!!
Hi Steph!! Thanks for the comments. If we do decide to buy a car we are definitely buying used with cash!!! That’s why we love frugality. Without it we wouldn’t be able to make big purchases with cash on the table.
You make good points re staying in Brooklyn. We definitely have open minds and are happy to be convinced. Something about wider open spaces appeals to us and the exciting urban planning changes in LA are compelling. But it’s nice to also know that if we stayed in BK life would be pretty good as well.
Nashville looks amazing. Mr. FrugalBrooklyn went there for his bachelor party! If we visit, we definitely can make some nice home cooked meals for you 🙂 Only if we can also go for some Hot Chicken!
Such an interesting study! Thank you Mrs. Frugalwoods for carrying on with this series. It is one of my favorites on your website.
All the best to the FrugalBrooklyns! Exciting decision-making-time isn’t it? 🙂
Thank you!!! It is very exciting
I agree. This is definitely one of my favorites!
I wish you the very best in what you are doing! Three comments:
Having served in elected office, I believe Mrs. Frugalwoods makes an excellent point about not being perceived as a “transplant” if you wish to effectively pursue such a position. (And while a desire to serve the community is admirable, when taking on the expense and challenge of trying to attain an elected position, one other thing to consider is that potential constituents may often consider it a conflict of interest when a government employee runs for office–depends on the person and the position, of course, but in urban planning this can be a real issue. I know because I am a planner, though I wasn’t one at the time I served in public office. So I would look and plan carefully and realistically in terms of how relocating, public service, and professional goals mesh, because ultimately that all affects your finances. Last, I wholeheartedly concur with Mrs. Frugalwoods assessment of new car purchasing/leasing options. There is a good reason Dave Ramsey refers to car leases as “fleeces”! It only takes one tour through the lease agreement’s small print (especially on trying to sunset your agreement) to see why!
Good luck with your goals and decision-making!
Ah! Good to know that you also have served in elected office. We have done some thinking about how the move to LA and back may not serve Mr. FrugalBrooklyn very well if he wants to run for office in NYC. Agreed re government job being a conflict with public office especially urban planning. I think at that point, Mr. FrugalBrooklyn would be out of the public sector and most likely teaching or consulting or at least that’s the idea. All that being said, I think Mr. FrugalBrooklyn is open to being in office in LA/Cali or wherever we end up landing post NYC. Although if he really wants an NYC political career we might want to think twice before relocating. Lots to consider!
Ah good to know re leasing and “fleeces!” At this point we are looking into ZipCar and if we buy a car then used in cash.
Being a recent mover, and assuming non-Spanish speaker, all hinder political goals in LA area. California politics are VERY cutthroat, outsiders, which your husband would be, are looked upon with suspicion, and being a transplant from NYC is NOT a bonus in local politics, rather seen as a negative. Further, Californians largely consider East Coast liberals to be far too conservative, in California most East Coast liberals would be considered Republicans. Unless he’s willing to put in 10 to 15 year to build up community support, and preferably has backing from at least one local ethnic group, he’d be far better served pursuing political office in NYC.
You are killing it congrats!!! It sounds like you all are spending money on things that you actually value. Personally, I would go to LA and never go back to NYC but that’s just me 🙂 In terms of what you can do, I definitely wouldn’t buy a car until you moved to LA. I’d take advantage of Uber and Lift until you things are set with LA. On top of that I would potentially look to reduce the vacation expenses in anticipation of the move. That will give you more breathing room and set you up when you get there. Good luck in whatever you decide 🙂
Thanks!! I appreciate the positive feedback. It does indeed feel really good (and it makes our bank accounts happy also!) to be able to optimize the funds we do have through frugality. Yes, I agree re LA but I think Mr. FrugalBrooklyn is pretty attached to NYC. Perhaps if/when we move to LA, we will never look back!
Good feedback re car in NYC. Cutting down vacation costs seems logical since it’s our biggest expense. I saw in later posts re travel hacking. I haven’t heard of that before so I’ll need to look into it!
I would go to LA and never move back to NYC either, because I do not “do” cold weather….lol. I also agree with you, I would not buy a car until I moved to LA.
Thank you for sharing your plan and questions with us, Mrs. FrugalBrooklyn!
I think it’s a great idea to secure at least one job before you move to LA. LA might be cheaper than NYC, but it’s still very expensive. I’d rent a place and navigate the area before committing to buying a house/condo somewhere. These are the items you can consider cutting/reducing from your budgets: traveling/vacation, gifts, clothing, personal care, and gym membership.
You might want to see how you feel about staying at home with your baby after 3-6 months. I took a 1.5 month break after having Baby FAF and realized that my mental health would really benefit from me going out and interacting with my colleagues. As Mrs. Frugalwoods mentioned, you might also consider working part-time if you do decide to be a SAHM.
I was going to say something similar so I’ll piggyback–two months was the peak of my postnatal hormones and emotions after having my baby last year; by the time he was three months I was totally ready to go back to work!
Hi Mrs. FrugalAsianFinance!!
I completely agree re securing at least one job before moving to LA. We are hoping that with LA expanding public transit and rapidly developing the career options will be advantageous for our move.
Agreed re renting at first before buying in LA.
I will def consider the working part time idea. Perhaps as someone recommended in a later post a combo of part time nanny share, part time work and being home with the baby will fulfill my want to have some career options while spending quality time with our baby.
This was some of the best advice I ever received was it’s hard to know how you will feel about working vs not working until you’re in the thick of things.
My attitudes have evolved as my daughter has grown, some ages and stages are more pleasant than others.
Agreed. I had no idea how I would feel!!! I’ve always been really into my career and advancement in that arena. I thought I would just easily go back to working full time no problem. Once I had the baby I really shifted my thinking. I didn’t realize how much I would enjoy being a mom and all the things involved with it. And the baby so cute!!! Now, flexibility is key to me. Hopefully I can find an arrangement that feels good.
Hi there – exciting times! A few comments, for what they’re worth: I worked in politics for a while, and (aside from the other posters’ very true comments about being from CA and a NYC liberal being essentially conservative in CA), politics is all about who you know and your networks. I would think you would have a tough time re-creating those networks in LA, especially as you are entering the phase of life where most of your free time is spent raising babies vs. networking. This is especially true as you mentioned Mr. FB is an introvert.
In terms of being a stay at home, my advice would be to find a flexible solution that still keeps you in your career field. I had a really hard time going back to work with my first baby (now 3). It started to feel a bit better when she was 6 months, and it felt even better still at 12 and 18 months. Now she’s three and I can’t imagine being home with her (she would be so bored with out her friends and school!). I also have a six month old little boy, and though it was tough to take him to daycare at first, with this one I know it will get better as time goes on. I think a flexible solution would serve you well so you could bring home extra income on the side and still be ready to move back into the career world if you decide to do that.
Having a 10-year-old, I wouldn’t even want to think about a move to another city. It feels that they might want to concider where do they wish to live long-term, instead of moving back and forth. And yes, there are many factors involved (for example, the grandparents who live in the LA area).
I worked from home while my child was young and it did us both good. Nowadays I’m both employed and self-employed on the side. It wasn’t hard to find a job, because I listed the self-employment in my CV. I do live in Germany though, and don’t know how it all works in the US…
Thanks! Yes we do need to consider how the kids will take the potential move. By the time we would potentiallu want to move back to NYC the kids will be pre teens/ teens. Which I have been advised is a pretty difficult time (and I remember vividly also).
Thanks re career and working from home and or staying at home. I hope that with more people finding flexible work arrangements whatever we do decide doesn’t reflect too negatively on my resume. I have hope that employers are starting to become more cognizant of workers needs for flexibility!
OK, I have to say. I moved at 4, 5, 6, 7, 11, 12 and 16 and I absolutely survived unscathed! And I have friends from many areas!
I too am pondering the move to L.A. when they say they wish to move back to the NYC area. My assumption is that the urban planning jobs pay much higher in L.A. because L.A. is so car-centric and in need of an overhaul, so the talent demand is high. Perhaps there’s another city in the US that also needs better urban planning but that’s cheaper than L.A., at least for housing?
LA is very exciting career and quality of life wise because it’s growing in leaps and bounds and is also a big megalopolis like NYC. It’s got all the fun stuff NYC has with more growth potential, better weather and access to nature. We also really enjoy surfing so being able to surf year round would be fabulous. That being said, we have been considering other less expensive cities that might be growing as well – Seattle, Denver, and Austin come to mind. The only thing with those cities is they aren’t as exciting and cosmopolitan as LA or NYC. Plus no surfing. But some things to consider for sure.
The FrugalBrooklyns should definitely look into travel hacking to help reduce that $7800 figure for vacations/travel. It would also cut the costs of traveling to see family on the West Coast, which sounds like one of the reasons they are considering moving to LA in the first place. There are so many cities outside of
Hi! I don’t really know what travel hacking is but it’s its the use of credit cards and points it always has seemed more work than its worth. We aren’t very good at keeping track of stuff like coupons and points but if I can be convinced that it’s worth it then I am open minded. I really would
like to reduce our travel bill without compromising our love of travel too much!
With the amount of travel you are doing, I would definitely look into it. The least hassle-y thing to do would be open two credit cards that come with big opening bonuses. Eg. If you and your husband each opened a Chase Sapphire, I believe that would be 100k points right now, worth over $1000 in flights. (there are often better deals that pop up). The main pain would be spending enough money to get the points (usually a few grand in a few months has to go on the card). It’s honestly been a game changer for me, but I can see why people avoid it.
They’re in a great position right now, great savings rate! I can see the logic behind all of their goals with the exception moving moving to LA. I understanding wanting to be closer to family but moving back after 10 years, that’s leaving a lot of money on the table from realtor fees etc. Having said that, cost is one side. Intangible reasons can outweigh those. It sounds like being closer to family is a strong desire for them. Understandable with young kids. I wonder if this was a compromise, between both their needs (wanting to be closer to family and political career aspirations).
Honestly, mostly I got lost with all the scenarios and numbers being thrown around. I’d suggest building a spreadsheet with each combination of scenario in a separate column and run the numbers. Research the numbers the best you can, I know some of it will be making assumptions. With that, you might quickly see what is realistic vs not financially. That might make it clear right then. Even if in the process your preferred choice becomes clear and it isn’t good on paper (do the math), you’ll be able to focus on tackling what makes it not financially viable so that it makes it a feasible financial reality.
Hello Whymances! Very astute points re the LA move. Many people are wondering why move to LA if we are planning to move back to NYC anyway. In many ways it is the compromise we have been navigating. Since I am from LA, I have missed it and also it’s a super dynamic and exciting place to be at this moment – train lines are being built left and right, lots of development near transit, infrastructure improvements. Mr. FrugalBrooklyn is also intrigued by the changes, but he has a strong desire to strike it as a politician in his home city, NYC. Thus, the ping back.
I really love your suggestion of building out a spreadsheet for each scenario. That way we can compare and contrast. We will do that as a next step!!!!! We love scenario planning —- or any kind of planning — after all that’s our profession!
Scenario planning is THE best! Spreadsheeting is my digital downtime. Sounds like your timeline has a couple of years. So you can take 6 months to slowly build and work at the scenario planning. Numbers are important but I find as I research and put numbers down, I learn so much more. I think of things I didn’t consider, it sparks conversation as a couple….
Best of luck with scenario planning!
I agree with MrsFW. You guys are doing really well but watch out for lifestyle inflation. Do You really need to buy a car now? And do you really need a nanny? Wouldn’t daycare be cheaper? Where I live, it doesn’t make financially sense to have a nanny unless you have at least 2 kids.
Agree re the nanny. Assume it would not be a live-in as there is no extra room in their current home. But I think it would also increase their food and household costs even if only daily from 9-5. Another adult using utilities, maybe 2 meals a day, even tp and tissues. And if nanny is doing chores like grocery shopping, that could impact if not tightly controlled where purchases are made. It all adds up. Creche or day care would seem a cheaper option if good quality can be found. Objectively, the move to LA does not seem like a good idea, but unobjectively, the heart wants what the heart wants. I raised my 2 children 3000 miles from my family, and though I wasn’t always happy, you somehow make it work. With Skype, free phoning via apps…it’s not such a big deal now to keep in touch. Being originally from the east coast, I have to agree with the thought that many local voters won’t be overly thrilled with someone who “left their great state” for CA and now wants to tell them how to run things. I hope that isn’t mean, but it is how liberal easterners tend to think. I wish you luck.
Good points all around. We will consider lower cost child care options. I also hadn’t considered that the nanny would incure a higher food & household bill.
Good points re east coast voters. It’s a rough ride out there! Mr. FrugalBrooklyn & I will need to think long and hard about which one of our figure goals is more important.
Daycare in NYC is actually extremely expensive and sometimes a nanny or a nanny share makes more sense.
Truth. Sometimes it’s easy to inflate things — we noticed this once we had the baby we started to make a lot more purchases on Amazon because it was convenient and we felt justified due to the baby. Now that we are coming out from under the fog of newborn-hood it’s time to trim the costs back up. As far as car and nanny is concerned it’s true we should be careful not to just inflate our lifestyles due to having a kid.
Thank you for sharing and congrats on fantastic retirement savings and thinking strategically about your future!
I wanted to offer a perspective, and hope this comes off as politely as possible, but as some with an urban planning degree also working in the NYC market, I am afraid it’s not realistic to expect a 20% higher salary (for him) and 30% (for her) just 2 years from now. Especially all the way across the country (it’s very hard to job-search remotely) unless you have tons of professional contacts in LA? If anything, a lower cost of living generally equates to lower salaries (though I also agree LA is barely any cheaper than NYC at this point). I would be cautious and maybe come up with cash flow estimates for your life there based on your existing salaries to be safe. Either way, best of luck and thank you for sharing this!
Good points re cash flow estimates if the LA job situation isn’t as lucrative as I imagine it to be. We do have a good amount of professional contacts in LA but it is still tough to find a job remotely. We shall consider all of this and do some cash flow analysis!
A fan of the site and series, I was excited to see fellow Brooklynites featured. Our son’s room is also our dining room! The transaction costs of moving cross country seem high, particularly purchasing a home there. $800k is A LOT. What about a large house appeals to you? Would a country home close to NYC fulfill that need? There is a picture of the Poconos in the post, there are REAL cheap homes in that area to get away and possibly use as a rental stream. If you’d consider staying in NYC and planning on getting a car, I would recommend looking at neighborhoods that are less trendy but where you can get a 2-bedroom apartment for half of your dream budget. Yes, they still exist in safe neighborhoods! Our mortgage and maintenance on a 1-bedroom is less than your rent and 100 sq ft larger. As for children, we are set with one, but sibling discounts do exist, though slight. I personally cannot give up working because I’d go insane, so I’m not help there. Good luck!
Hi, great response. I currently live in Manhattan and spend $3000 for a 875 sq ft L-shaped studio. I would love to move to a less expensive apartment ( smaller but at least 450 sq ft.) with hopes of purchasing a small condo in a few years. What neighborhoods are as inexpensive as you mentioned? I would be very grateful if you would share this with me as I feel I have looked at about 15 apartments that were less expensive but either 300sq ft or in dangerous neighborhoods. Please advise. Thanks!
Ditmas Park, Kensington and Midwood are safe and convenient locations in BK that are still affordable. Bay Ridge and Sunset Park are nice also.
We live in a 900 SQ foot 2 bedroom in Manhattan for $2100 a month, in a very safe neighborhood (Wash Heights). The deals are definitely out there if you look hard enough! Check Street Easy, Trulia, Zillow, RentHop, and Craigslist.
Ok! Which less trendy neighborhoods do you rec in BK? If we decide to stay in NYC, then I would like to know where to start looking! We have thought about buying a vacation home in the woods and renting it out if we wanted more open space on the east coast. Good thoughts and nice to hear from a fellow Frugal Brooklynite!
Can we get a follow-up in a few months with what FrugalBrooklyn decided to do? There’s a lot of life-decision whittling that needs to happen, and now I want to know what happens on next week’s episode!
I provide updates from all of our Case Study subjects several months after their case study publishes. You can check out past Case Study updates by scrolling to the bottom of the posts. Just go to the Case Study section of the blog :).
I love the updates! Could you do a short post alerting to when the updates are added? I never remember to go back to the old case studies to look.
I post it to the Frugalwoods Facebook group when I put in an update :).
Some of us don’t do Facebook! I try to go back but just forget some times!
Yes, that would be really great.
I’ve been thinking about this a lot. I wish there was more info/reminders.
The reason behind following this site is actually the case studies. They are the best to read and learn.
Hi — impressive savings and savings rate!
I don’t have experience with NYC or LA living, but can a family live in LA without 2 cars?
In any event, don’t forget to include car insurance, gas, maintenance on your vehicles, all expenses that don’t exist in your current budget.
Thanks for the reminder re car costs! I think a family in LA can just have one car — just helps to live in a Transit or walk friendly area if so.
I’m a resident of LA. We have been a one-car family of four for nearly five years. We live on a bus line and have many neighbors who live here with one car (or none! But those folks tend not to have kiddos) It can be done!
Hi FrugalBrooklyns – congratulations on the new baby! I completely understand the desire to be near family when your kids are young – having my parents nearby has been so helpful with our son. However, I don’t see how LA will really fulfill your desire to live in a “walkable, central, transit-friendly neighborhood.” Unfortunately, most of Southern California is completely car-dependent and there aren’t a ton of transit options available. Maaaaybe in the heart of downtown LA, but if you’re looking for good schools, you’ll likely be in the suburbs. You would absolutely need a car there, probably two if you both commute to work. I’ve lived in Orange County, LA area and San Diego and while the weather is nice year-round, everyone drives everywhere. Plus it’s still soo expensive, compared to other cities in the U.S. Do you happen to have family somewhere in the middle? 🙂 Alternatively, would it be possible for your family to move closer to where you are now, so that you can stay put? Particularly if you want to move back to NYC in a decade.
As for the stay at home decision, I would float the idea of working part time for a bit with your employer. And look into doing part-time daycare, or a part-time nanny, for the rest of the days. That seems like the ideal compromise for all of your goals – spending more time with your baby while also keeping your foot in the door at work and getting money coming in.
Good points about LA and SoCal. Hopefully we would be able to find a few neighborhoods that are transit friendly enough to fit the bill. I know that the region is really improving regarding transit as well so it’s nice to see. But you bring up some real constraints to the region. We have been thinking about Colorado or Austin or somewhere in the middle as well as it would be splitting the difference for both sides of the family (Mr. FrugalBrooklyn has family in NYC, me in SoCal / Orange County).
I do like the idea of part time and then nanny share or day care the other days when I am at work.
It seems to me like the FrugalBrooklyns have a pretty good plan in place. I too used to live in the NYC metro area and I know how expensive it can be to live there. I was surprised that they didn’t have a category for public transport, which was a pretty decent part of my budget. The big thing that I noticed that they absolutely would be doing wrong if they decided to do it is to lease a car. This is the biggest waste of money ever! It’s just throwing money away. If they’re going to move to LA, they will need a reliable car, not zip car, and not a leased or brand new car. The best thing to do is to check out used cars through a website like cargurus.com and locate a car that is within their budget (yes, set the budget first! and remember to factor in taxes and document fees that the dealer will tack on after you’ve negotiated on the price of the car). I used cargurus.com to locate a 3 year old ford mustang for my husband. It had less than 50K miles and was in prime condition. I was able to talk the dealer down to $13,000 and after taxes and fees, we had a nearly new car for less than $15,000. So, do your homework on a good family car, set your budget, shop around, and buy a used car – don’t lease or buy brand new.
Great job and congratulations on the little one. I do not think numbers will show saving money moving to LA. Costs thousands just to physically move. If you do move, and then want to move back, don’t bother to buy a house in LA. Kids will adapt but I am not seeing an advantage to moving to LA then back. Definitely pay for your own cell phone. Prepaids are the cheapest, usually. If there are other ways to transport to see in-laws, avoid car expense in the city. Healthcare costs will probably go up with addition of baby. They do get sick, especially after they are exposed to other kids. But, you will probably find yourself travelling less so that will probably cut back. If not, travel hack because now you have a 3rd person to travel with. Keep your restaurant night for your date nights with a babysitter. I like the suggestion of deciding on priority. If goal is low cost living, I don’t think LA will get you there.
Hi! Just supporting Ms. FW’s suggestion of part-time work. After my first kiddo, I left my FT job (attorney with a nonprofit) to stay at home. I’ve found that working some (for me typically 10-15 hrs/week) has been helpful mentally, emotionally,and financially. It allows me to max a 401k (so my retirement contributions don’t stop) and keep up with 529 contributions for the kids. And given my elevated hourly rate/reduced need for childcare, it was a good move for me. It’s certainly not possible for everyone (I’m very privileged), but just a consideration to explore, particularly if your spouse has ER-provided health insurance.
This is such a well-thought-out case study!! The Frugal Brooklyn’s seem like they are poised for lots of great things!
I strongly agree with Mrs Frugalwoods suggestion of
ZipCar. Buying a car and driving it in Brooklyn is madness, I say from experience. ZipCar includes parking and avoids all the nonsense of oil change appointments and car repairs along with the details you mention re: the DMV.
I also agree that the travel budget could be halved at least. Traveling with baby is a hot mess and these goals are huge…. something’s gotta give.
Finally, I would suggest that Mrs Brooklyn Frugal should consider doing some work in the gig economy (Up Work, etc) during maternity leave as a way to discover whether the gig economy is about and get a taste of the entrepreneurial lifestyle without having to make a big decision first.
I would suggest that if they do decide to move to LA they rent rather than purchase a house. It gives greater flexibility to be able to move up or down the housing ladder depending on what happens in the future; second child, stay at home parent etc. and you have a much better control of what your actual monthly outgoings are. If situations change you can also move much more easily than if you buy. FW $4900 outgoings estimate are fairly accurate as our previous house was the same value, so this is a huge outlay on their salaries.
Moving kids is not ideal but as long as from the start you are upfront that LA is temporary and that eventually you will return ‘home’ to NYC then kids are way more adaptable than people think or give them credit for. As expats, my two (14/12) have moved a bunch, along with their peers, and they are all perfectly fine. We just spend plenty of time talking about moving, and what the benefits will be with each move that comes up.
Just a tip on the idea about trying to use a car share app- peer to peer car rentals are illegal in the state of New York (I’ve tried) so you would have to rent the car out to friends without the help of a dedicated app
I know this is a financial blog, but I recommend first ignoring the money and figure out what you want the most. Then figure out how to make the money work. Like Mrs. Frugalwoods wrote, you don’t currently have enough money to fund all of these dreams. Realistically, it’s rare that someone can fund ALL their dreams. If you know what’s most important to you, it’ll be easy to figure out the rest.
It sounds like you guys are doing a great job. You’ve put yourself in the position of being able to fund some of your dreams, which is wonderful. Thanks for sharing your story, and congrats on the baby
What a great case study! Kudos to the Brooklyns for their amazing savings and progress!
Agree that the move to CA may need some additional consideration. One thing to consider is Home purchase costs. In high-demand areas, it’s not uncommon for houses to sell well over list price. It wouldn’t be uncommon for a house with a list price of $800k to actually sell closer to the $1m mark. Crazy, right?
That’s not to say that the Brooklyns shouldn’t move to CA (Love it here!). But a plan to rent first might be a good option.
Whatever the Brooklyns decide, it will be wonderful!
Have you ever thought of moving to a state that doesn’t have a state income tax? Texas is a GREAT place to live. The cost of living is extremely low, comparing to both NYC and LA. There are several large metropolitan areas (Dallas, Houston, Austin, San Antonio) and the people are super friendly. I have moved cross country twice and it is expensive ($12-15K, depending on how much stuff you have). Florida is another state without state income tax. As for traveling, check out Travelmiles101.com. They show you how to travel using reward miles and points for virtually free travel. Best of luck to you in whatever you decide.
I put a plug in for Houston further down! Texas is great in many ways.
Be aware that property taxes on homes in Texas are high in taxes ,though. The money has to come from somewhere!
Having just moved our four kids from Portland, Oregon to San Antonio, Texas I have a couple thoughts. Driving for multiple days with our three year old was AWFUL, took twice as long as we expected, and had him crying for the last two days every time we buckled him into his car seat even with tons of breaks. Plan to fly, not drive from NYC to LA if you end up going!
Second, it’s been six months and our 10 and 8 year olds are still struggling to make new friends and are super homesick for their old friends. That would only be even harder for them if they were older.
Thanks for this! I didn’t realize how difficult it would be to drive with the kid! We thought it would be romantic driving across the country if/when we move but now we realize that we are most likely incorrect in that thinking. Flying seems to be the way to go if we move. Wondering if there’s a good age for the kids to go on a long road trip though? Any thoughts on that?
Good points re making new friends and being homesick. I wonder if there’s a better age than others for moving?
Every kid is different! My daughter loved road trips from infancy on and it worked fine. I guess “assume the worst” might be good advice, though. I think you’ll need/want two cars in California and most other places.
Again, every kid is going to be unique with the issue of moving. Mine was fine and I moved several times as a child, too. It was hard but long-term, worked out well!
It might be fun if you like that kind of thing. All families and kids are different. We drove from MD to CA and back this summer (much more affordable way for our family of 5 to see family in CA), and the kids (12, 9, 3) all did GREAT! We did some VERY LONG driving days too.
Driving with kids doesn’t have to be terrible. We drive from our home in Dallas to visit both sets of parents in Utah every summer (20 hours each way). We have 3 kids ages 6 and under and we’ve done this drive 4 times. We’ve built up a diaper box of toys that only come out on car trips (Safari, Ltd. Toobs, stickers, special markers that only color on special paper, balloons, glow sticks, etc) and we have movies and shows loaded on our tablet. We stop to run around about every 3-4 hours, and have learned it’s best to eat meals in the car (nothing worse than telling kids they have to use their break from the car to sit in a restaurant or at a park bench).
We prefer to do one day of 15 hours in the car and one day of just 5. We stopped at Arches National Park last time and wore the kids out hiking and it was the greatest thing ever! They all took naps for an least the next hour.
One thing I would recommend though, is to not have your first car trip be cross country. Do some 5-6 hour each way trips to help them get used to it (especially if they’re not used to being restrained in carseats). If you love traveling, teaching your kids to be good road trippers is an excellent way to save money on travel! We spend about $600 on driving to/from Utah each year including food, gas, and a hotel. There’s no way we could fly to Utah for that (especially if we then had to rent a car once we were there). You have to adjust your expectations a little (less romantic and fun, and a bit more work), but you’ll have to do that for any sort of travel you do with kids.
I agree that driving with kids doesn’t have to be terrible. They have to be trained! My two kids had 10-12 hour car trips from Washington State to California twice a year so we could visit my parents for about four years. When it was time for cross country move to Georgia, they had no problem.
FrugalBrooklyns, congrats on your savnings! It’s a nice springboard to a killer networth if you both keep working and increase your savings rate – you’ll be amazed what a few more years will do. Honestly, you’d have to consider living more indland in LA. The techs have moved to So. Cal and have MAJORLY changed the housing market.
I stayed home with my baby 4 months and LOVED it but i also enjoyed returning to work and the rest of my time went to my baby. We saved 100 percent of my income and I ‘retirer’ 5 years alter. If you decide to stay home, maybe you can run your own daycare or take in 2 other kids to sit so you won’t lose all income and your baby will have instant playdates :). Good luck!
Thanks Mimi, that’s exactly what I did. The thought of leaving my baby made me ill. Once she turned two, I studied and was permitted legally with my own childcare. Instant playmates and a salary. When she turned ten, we moved a mile away and yet it seemed like cross country to her. Once she started 6th grade, I switched to just before and after school daycare which left my days open for Spanish classes, chores, appointments, whatever. She’s thirty now and I never regretted my choice to be a SAHM after 18 years of federal government employment. For our family, it worked. Good luck!
I wonder if the FrugalBrooklyns might consider other metropolitan areas with a lower cost of living? I live in Minneapolis and it is a great place to live! There is a lower cost of living than coastal cities (for instance, you would be able to get a fantastic home in Minneapolis or a surrounding suburb for around ~400,000 rather than $800K!). There is a lot of public transportation and I know many families who manage with only one car per household. Additionally, Minneapolis is really a hub for corporations and businesses and is in the throes of much development right now. It may not be near your family, or you might prefer a warm ocean view than winter (I wouldn’t blame you!). But there are many advantages to perhaps considering another city for your relocation in order to achieve a lot of your goals! Good Luck!
Lucy makes great points. And I would add, we have scads ( I mean tons) of farmer’s markets and natural food co-ops that are open to everyone to shop at, and this above all makes it where I want to be because I feel better when I eat real food. Yes, the cost of living in Minneapolis *is* lower than coastal cities, but it’s rising very fast, and in my cynical perspective, Minneapolis is trending toward becoming a mini-Manhattan (crowding, cost-of-living, crime, congestion). Traffic and construction-driven congestion is exponentially worse than it was in 1997 when I first moved here. Condos, trendy apartment highrises, etc are sprouting faster than I can track. Just yesterday I went to Uptown/Lyn-Lake area to get some groceries not easily found in my neighborhood (Central), and found they’ve torn down old brownstones, shops and stores to make way for yet another condominium behemoth that is likely to be unaffordable to anyone without a high-paying job (I’m a case manager for people escaping poverty so I am sensitized to the issue of poverty and privilege, while acknowledging my own privilege about being able to buy organic food). TL;DR version: Minneapolis is amid the throes of an uncomfortable spurt of development that’s creating angst, contention and bitterness among existing neighborhoods that are feeling beleaguered and perceiving the character of the city changing, and not for the better.
Dear Mrs FrugalBrooklyn,
congratulations on your dreams.
LA is where my hubbys relatives live. Brother bought a townhouse in torrance because it is cheaper to live there. Two miles from redondo beach. He worked for The city of LA. Good jobs with pensions.
My parents drove a car towing a trailer to sleep in and eat in. They were looking for the perfect place to call home. If your perfect place is near family, choose that city. Commuting is awful. You will need two cars. You drive everywhere in LA. Family in Burbank don’t visit those in Torrance due to traffic.
We moved to Virginia in 1985. We always thought we would move back to the west Coast. Never did. If you want to live near your family, just go. Do it today. Live with family until you find jobs and get oriented. Sign a contract to agree on how to live together. Pay rent to them. Check out all the houses in the neighborhood. Find the retirees and make an offer before it is put on the market.
You are right about Torrance! There are buses aplenty to take you downtown or to the beach. They have shuttles to the Hollywood Bowl even.
Congrats and I love that you have big dreams! If a move to anywhere stays on the table, then I’d like to offer a few thoughts. (We have moved twice with 3 kids.)
First, moving is expensive even if your employer funds “all” of it. “All” truly doesn’t mean you have no costs. Eg. A full home inspection usually costs more than the stipend. Things will get broken and replacement value doesn’t fully cover replacement. Factor those costs into your move and truly purge beforehand.
Second, it takes time, energy and money to determine your new frugal options for groceries, pharmacy, etc. and to locate doctors, dentists and religious affilations. In my previous home I could easily shop at one grocery store with an occasional side trip. Currently that’s not possible even after making lifestyle changes. Many dentists here don’t take insurance- you pay out-of-pocket then submit a reimbursement. New and confusing traffic patterns coupled with HEAVY traffic forced an upgrade to our cellular data plan so we could use navigation services.
Third, moving with kids is challenging. There are emotional and social costs as well as financial ones. Each kid will view the move differently (excited, angry, anxious). Apart from all the physical move items on your punchlist, you need to factor in money and time to help make adjustments. Activities won’t cost the same or be the same and travelling to them will be different. School costs and what is required will vary (supplies, clothing, transportation, fees). You lose your help network- carpools, coverage for sick kids or late pickup, information sources-as well as knowledge of the neighbors, schoolmates, etc. (Is there a drug or anger problem in the household? Is there reliable adult supervision?)
Fourth, if you do move then embrace the differences. If it’s perpetually freezing out, learn a winter sport. If you live close to an awesome museum, park, etc use it. Give yourself a moving entertaining budget.
$650 for a month is a lot for vacation. I’m not saying don’t go on vacation but do so more freely only when you get more padding into your bottom line. You can blow through savings pretty quickly in LA with 2 kids! I agree with not buying yet in LA if NYC is the goal in a decade.
I have to disagree with Mrs. FW. I don’t think you need a car in LA. We live car free in Seattle (I consider my neighborhood not as developed) as LA and still manage just fine. I bet there’s tons of ride-sharing options like Zip, Car2Go, Turo, Reach Now etc. Car costs saves us $500/month. Our savings rate is 80% after taxes and I think a chunk of that to living car free. But if you will be purchasing a car, buy used big time. And buy small, LA traffic is hell. That’s one reason why I don’t think you need a car. You’ll spend more time waiting for the light to turn than get anywhere.
Your grocery bill looks fine to me 🙂
I think you can get by without a car in LA depending on where you live and work and where your kids go to school. But, I think doing so requires you to live and socialize in a fairly confined area, since riding a bus with kids is much harder. If you develop a community of friends in your neighborhood, it’s probably fine. But a lot of Angelenos have friends all over the city where it’s hard to reach people by public transportation. Also, given that they want to participate in a lot of outdoor activities, a car will make it significantly easier — hard to get to the best hiking trails without a car. I also don’t know how easy it would be to take a surfboard on the light rail and then walk it 4-5 blocks to the beach.
I don’t think you can get by without a car in LA if you have a baby. Too many things to consider — needing to drive the kid to urgent care, running out of diapers at 2am, etc.
One thing that might help you decide is a spreadsheet that shows your current rate of savings over the next ten years and what that number would be at the end of 10 years vs what it would look like if you do move to LA and spend $800k. I think it probably wouldn’t be that hard to come up with a few different scenarios. It might help you decide that your move to LA is worth giving up savings massive amounts of money, or perhaps when you see that number you might realize it is NOT worth moving. There is no right answer, only an opportunity cost. Also, you say that the cost of living is lower in LA – but that will not be your situation. Your housing costs will go up. It could be helpful to include some scenarios that show if you stayed in NYC and bought, stayed in your current apartment, moved to LA and rented as well as move to LA and bought. I’ve built these scenarios many times to make different decisions and it has always presented a clear picture and made it easier to decide whatever it was I needed to decide.
Great job, FrugalBrooklyns! You are rocking it in the savings department.
I firmly agree with Mrs. Frugalwoods on really thinking through your goals and prioritizing. If the long term goal is running for public office in NYC, I can’t see how a move to LA would assist this in any way, shape, or form. I believe public office officials need to be living where their constituents are, and networking locally, so it seems this move to LA would be a huge setback to this long term goal. I would think the best possible thing to do in support of this dream would be to continue living in NYC, and possibly even continuing to rent if that’s what most of the people voting him into office are doing. I don’t think buying a house in LA will lower the living expenses, since you mention realistically a condo would be $800k. A duplex – with much more risk considering a higher cost and potential for empty months with no income – seems far more expensive than your current lifestyle. I don’t think the move to LA seems prudent, based on your goals of saving more and becoming political officials in NYC. Talking out all your true goals and prioritizing what you want in life should really make the direction you want to take clear.
I live in Brooklyn, too, and just got back from a trip in LA, so I was really excited to read this case study! You guys are doing an amazing job being frugal in NY (way better than me and my husband), and I totally agree with Mrs. Frugalwoods’ recommendations. Just a few other thoughts from another city dweller’s perspective:
Housing in LA – What I would do is downsize our stuff and then rent a cheap place in LA, instead of trying to buy right away. That way you can get a lay of the land first, and have some time to save up the cash for a downpayment. Also, Santa Monica and Los Feliz are expensive neighborhoods. Besides that, you might want to prioritize where you live based on where you get jobs. Consider how much driving you’ll have to do every day. My friend just bought a condo in LA, and she chose to prioritize living in a neighborhood with a great school district for her kid. And in her case, crunching the numbers made a lot of sense–her mortgage is not much more than what she’d be paying for rent. Later she plans to hopefully sell the condo and then use the proceeds for a standalone house. But anyway, I feel you on wanting to buy a house in LA. The ones I saw on my trip were so adorable, and you get a lot more space for your money than you do in NYC.
Staying home with baby – I understand the desire to want to stay home with the baby for an extended period of time, but it’s definitely a risk for your career. Also, you have savings, but is it enough in case your husband loses his job? And consider daycare instead of a nanny to reduce costs, as the nanny will most likely eat up all the monthly savings, which means no money for a house, etc.
Cars – You don’t need a car in Brooklyn, and moving it every week is a total pain here. Wait to buy it in LA. Downsize your stuff and send everything over ahead of time. Then fly yourselves to LA.
In terms of things to trim, definitely take another look at the travel budget. Or better yet, as someone else mentioned, look into travel hacking to significantly reduce the costs. The rest of your expenses look pretty good, though!
I think the budgetary suggestions here are great. I’m only going to address two items-Car and your future landing spot.
Car ownership is changing rapidly and IMO will look completely different in the next 3-5 years. If you can’t solve your transportation needs with a short term commitment, ride share, public transit etc., by all means buy something inexpensive with a high residual. Best example Civic. A mid line used Civic will be worth nearly what you paid one year in. I am a proponent of reliable low mile used cars, but outside of a cheap OEM lease, it’s going to be difficult to find something as inexpensive to keep on the road both in maintence and gas.
Los Angeles! Well you absolutely will need a car. Taxis are vanishing, traffic and commutes are abominable and public transportation can be a long and arduous process unless you live within short distance to your workplace and services. I’m not sure there’s a more car centric region in the US. Note my family is from Brooklyn and I’ve spent time on both coasts.
If you love the outdoors, surfing, friendly communities, beer, cheap groceries, good schools and are intent on living on the Pacific..
Look at coastal San Diego. Pacific Beach, Bird Rock, La Jolla etc.. Great schools, walkability, easy access to an international airport, lots of job opportunities in around UCSD/Scripps. Rents are high, but if you can avoid a long commute, it’s pretty easy to do your shopping on foot with a granny cart. It reminds me of how my Brooklyn Gram never drove and had an easy walk to everything. Keep in mind rents and home prices are extremely high but the public schools in these areas are great, you won’t spend money on heating, heavy clothing, entertainment (the beach and parks are free and year round). Barely used furniture can be had for cheap with all the University students moving in and out during the school year. We have ethnic markets where you can buy romaine lettuce 10 for $1.00. Public transport is adequate but improving.
Inland life isn’t all roses-hot, also trafficked like LA. If you can keep yourself near the water however, its glorious.
“which would, in effect, eat up the entirety of Mrs. FrugalBrooklyn’s salary.”
Gah! I hate this way of framing things. Childcare is the responsibility of both parents and comes out of both of their salaries. Framing it as the mother’s expense is what leads women to ditching careers and then struggling to reintegrate into the workforce. (I know you go on to make the point about opportunity costs, but I had to comment because I find it so, so pernicious to look at childcare as solely the responsibility of the mother to fund.)
THIS. Child care is a shared expense, not one that can be solely docked against the woman’s salary. Why we treat men’s work as a given and women’s work as the optional is frustrating.
I wonder if she framed it this way because it is Mrs. Frugalbrooklyn who was considering staying home? If Mr. Frugalbrooklyn wanted to stay home it would make sense to compare childcare costs to his salary.
I do agree with you though that it should not be viewed as just the women’s responsibility.
It made sense to me re: cost of nanny compared to Ms. FrugalBrooklyn’s salary because the costs were nearly exactly the same in dollars.
That’s something I never thought of before, but you are totally correct. It shouldn’t be framed this way.
This drives me crazy. Child care is always and only a shared cost in a two parent family. As a culture we view men’s work as a given and women’s work as optional, i.e child care is needed only because mom works, not because BOTH parent’s work. This leads women to drop out of the traditional workforce for often much less stable part-time gigs. There are numerous studies that show the impact on wages over the long term from even taking a year out of the workforce.
I would never, ever espouse that childcare is solely a mother’s responsibility to fund!! In this case, the FrugalBrooklyns specially said that Mrs. FrugalBrooklyn would be the one to stay home, which is why I used her salary to do the math. Conversely, if they’d said that Mr. FB would be the one to stay home, I would’ve used his salary for the calculation.
Every kid is different! My daughter loved road trips from infancy on and it worked fine. I guess “assume the worst” might be good advice, though. I think you’ll need/want two cars in California and most other places.
Again, every kid is going to be unique with the issue of moving. Mine was fine and I moved several times as a child, too. It was hard but long-term, worked out well!
This comment was supposed to show up above, re: driving costs-country with a small child, and re: effects of moving on children!
I agree! I know Mrs. Frugalwoods doesn’t mean it this way or feel this way at all, and many women don’t, but I still think it’s an unfair and incorrect calculation. The truth is that women are most often the ones who who want to stay home and women most often make less (often far less) than their husbands, and so this is the way things are calculated. Without taking into consideration many of the opportunity costs.
If Mrs. FrugalBrooklyn does decide to take stay at home with her baby (a very personal and reasonable decision), I would strongly recommend continuing to attend trainings and conferences, continue to subscribe to email lists and literature for her profession, generally stay up-to-date on developments in the field, and to track these activities to be able to put them on her resume and discuss them at job interviews in the future.
I appreciate you pointing this out – I didn’t even blink an eye when it was written above but how we phrase things is so important! It really shapes how we view our world and making sure we talk about childcare as a shared expense is a step for equality. As you mentioned it’s much more than dollars – it’s opportunity costs and how we view women in the workplace. I will definitely be more cognizant of this in the future.
Ex Angeleno here wanting to chime in on living there. I too question moving to LA as it is so expensive and the commutes just about killed me. IF there were no accidents on any of the three freeways I had to take to get to work, it was 90 minutes ONE WAY in the carpool lane, and that was only 20 miles. My quality of life raised so much leaving LA that it is hard for me to imagine raising any kids there. Good luck with all your decisions though. You have lots of options!
I agree – as a Californian born and raised, the best decision I ever made was to leave for a neighboring state. Better job opportunities, lower cost of living, and higher quality of life.
Hi there! I moved from NYC to LA three years ago and I want to say – in many ways it is actually more expensive in LA than NYC. I cannot believe how much housing costs have gone up in the past three years- the market is absolutely insane. When we lived in NYC, we paid $1,500 for a one-bedroom in Washington Heights; when we moved to LA, we moved into a two-bedroom on the Westside (Pico-Robertson) for $2,000. I know for a fact (given other vacancies in our building) that our two-bedroom would go back on the market now for at least $2,600 if we were to move out. And we don’t live in a fancy part of the Westside – to be honest, our block is pretty crappy. A nicer area (you mentioned Santa Monica) would very realistically cost $3,000+ for a two-bedroom. $800,000 for a small condo is realistic, but remember that real estate is so hot here that you will need to offer above the asking price.
Also, I have not found wages here to be higher than NYC by any means; if anything, they are slightly lower (although I can’t speak to the urban planning profession). We make due with one car and use Lyft, which works fine, but only because we both live relatively close to work.
We are so glad we moved to LA and it I don’t say any of this to discourage you. I just want to dispel the idea that LA is cheaper, which is something I believed when we moved here, and quickly learned was not the case at all.
This! All of this! I am a born and raised CA girl, lived in LA for 4 years with my husband before moving to northern CA a few years ago. I would not say that LA or most parts of Southern CA would be a cost savings for you. The rent you are currently paying would likely be a steal for many areas in LA, but likely in really crappy locations. Plus factoring in the need for two cars (yes, LA is expanding transit, but it is years away from being a realistic option for most neighborhoods. Some neighborhoods are walkable, yes, but as a whole, things are incredibly spread out!), things add up, making it is just an expensive place to live. I would also be mindful of the nearly 10% income tax you would be paying in CA. Your increase in income will be limited once taking that into account.
I love CA and have no plans to move, but would recommend you start looking at other areas of the state, if it is CA you really want to be. Sacramento, for instance, is in a boom with more and more opportunities coming in. It is ideally positioned for nature (mountains and ocean nearby) and would garner a large house for half of what you intend to spend.
Good luck in your decisions! I look forward to seeing where you all land.
Another potential cost saving option would be to eliminate using uber/lyft, and instead relying on public transportation. It’s not a big savings, but every little bit helps!
Also, would daycare be an option for childcare? I know it is still expensive, but possibly it could be more affordable than a Nanny?
I think its awesome that you can keep your costs so reasonable in NYC!
Thanks for sharing your story and your dreams! One small thing I would encourage you to consider about moving to CA is the level of state income taxes. We just moved to SoCal (just east of Los Angeles) from Washington state. Now, granted, WA state has zero income tax, but we lose about $800/month in take-home pay due to state income taxes on salaries that are identical to what we made in WA state. I did a quick google search, and it *appears* that NY state has a lower income tax rate than CA, but I am no professional. It was something we didn’t factor in when we were looking at the cost of moving and the bigger picture of life here. Other things to factor into the move here: mandatory earthquake insurance, supplemental tax on your home at the end of the year (on top of what you are paying through escrow), steep jump in commuting costs, etc. You may have already thought about this, but just in case you haven’t…. I hope this is helpful!
I’m just curious, I’ve lived in NoCA all my life, mandatory earthquake insurance? It’s an option, but have never heard it’s mandatory.
It may be a county thing? We are in LA County. We also have a supplemental tax bill at the end of the year for our house, which is not covered in our escrow payment. Again, LA Count-specific.
This was a fun reader case study to read, as my husband and I found ourselves in a fairly similar situation just a few years ago. We moved from NYC to DC when I was pregnant with our first, and I decided to stay home after doing the math on my salary minus a nanny or childcare (and because I really wanted to). Fortunately I was offered a part-time position working from home just 7 months after my son was born, and up until recently, was able to do that work entirely without childcare (only 10 hours/wk). After having our second child, we decided that for my husband’s career and our long-term financial well-being, we needed to find a lower cost of living location, so we moved to Houston just last summer, and I’m starting 20 hours/wk of part time work next week!
As I read thru Mrs. FrugalBrooklyn’s narrative, I had a few thoughts:
1) Though there are rational pros/cons to staying at home vs. continuing to work, in the end I feel that those should mostly be put aside. It comes down to this: Do you want to stay home with your baby (and future babies)? For some women, this is not what they want, and they do not feel fulfilled in this role, and I completely respect that and don’t think it is “better for the baby” if mom is unhappy. But if your heart is pulling you toward staying home, don’t worry about rationalizing or explaining it. It is a great benefit for your child to have a loving parent and teacher at home, and you can’t put a cost on that.
2) Though there are definitely savings to be had with not working (like meals out, work clothes, etc.), staying at home with children can be very isolating and difficult at times. Though I applaud any efforts to save money (and I think this becomes an important part of the stay at home parent’s job), I would not count on significant savings. You may find yourself needing to pay for convenience to keep yourself sane!
3) I feel like there is a piece of the LA move that I’m not understanding. I understand that the cost of living is slightly less, but it looks like the COL index is 144, compared to NY’s at 167. Different, for sure, but it doesn’t seem like enough to make such a big move, especially since it seems like you will eventually be drawn back to NY. If your husband wants to run for office, it seems that a long-term commitment to the city and community will be an important element of that goal, and building those connections early will help. If you are moving to LA to be closer to family, is family close enough to watch the baby while you work part- or full-time? Is there a way to achieve the increase in pay that you are expecting without moving? Would you consider a move to somewhere that has a low cost of living?
As for specific questions:
1. I suggest trimming back in the areas Mrs. FW suggested to absorb additional costs of having a child. As Mrs. FW’s increased grocery budget since having babywoods shows, there are additional costs with bringing a new member of the family into your lives. You don’t need to spend as much as many people do, but it’s also just untrue that kids don’t cost you money.
2. I would consider a longer leave if that’s what you want. It will impact your future earning potential if you are out for years, but 9 months to a year should not be a problem. In my opinion, any savings found by staying at home will likely be eaten up by other costs or will only have a small impact on your overall savings rate. If you do stay home or you don’t, I would consider staying put or moving to a low cost of living area.
3. I would do zip in NYC now, planning to buy a car when you have two kids. I’ve driven a car in NYC and dealt with the parking issue–I would avoid that scenario. If you do buy a car, buy a cheap used car. Don’t sell all your furniture before moving. I’ve done that–it takes more $ to start fresh than you will realize. Rent a U-haul and have your husband drive that while you drive or fly with the baby. If you have a car, don’t sell it before moving until you know that you won’t need it in your new locale.
Congratulations on the birth of your baby! Good luck with these big life decisions, and let us know how it all turns out!
Have you discussed with your family that is in the LA area what their plans are for the next ten years? I’ve know several people who relocated near grandparents or didn’t move to where they really wanted to, only to have the grandparents move out of state a couple of years later leaving them behind and not in a good position to sell, move or change schools.
good call. I’m almost certain my family is staying in SoCal lol.
You are doing great with savings/retirement plans! Don’t buy a car until you move to California because they have different emmisions requirements than other states. Buy a used car with cash. You can probably get a condo with a garage in Calif. Cost of living is not really that much cheaper there – gasoline is really high, utilities are high, food is expensive. I grew up in Calif and moved back to north bay area in my 20s – very high cost of living, moved away and came back in my 40s – very high still, and political climate not ideal either. Moved to Colorado! If you really want to move to Calif find a job and see if they will pay for your relocation so you can get your move paid for. As for staying home with baby I think you should stay as long as possible, and if you are having more kids do it now and go back to work when they are both in preschool/school so you don’t have to pay most of your salary to daycare.
Great job with the savings! I would echo what FW say on whether it makes financial sense to move to LA and buy.
I live in So Cal. (Santa Barbara). We bought in 2004, and our tiny starter home with no garage was a hair under $800k. So, I know me some $4000/mo mortgage payments + $8k/year prop taxes + $170k downpayment woes. I also know the woes of watching the housing market plummet to where my house was worth $500k (luckily, we kept our jobs and were able to keep the house. Our neighbors were not so lucky.)
I’d like to add that our total income at the time was around $170k and we didn’t have children at the time, so we didn’t have childcare expenses. When we did have kids, they were spaced 6 years apart (unintentionally), so we didn’t have 2 kids in childcare at the same time.
Don’t buy a car in NYC.
Mrs. FrugalBrooklyn, great job with your savings, emergency fund, and ambitious goals. You are on track and doing a great job!!!
Just curious, have you made a trip out to LA to check out the housing situation? I don’t know anything about urban planning jobs and how well they pay.
My in-laws live in a small town near Pasadena and my sister-in-law and her fiancé live in an apartment in Silverlake. They are trying to buy a house but it is challenging even though they are two engineer with engineer salaries. My in-laws’ house is quite old and needs a lot of work to be livable. And they are confident that they can get at least $800,000 for it. (They plan to sell soon to retire out of a HCOL area.)
Have you considered a little trip out to LA to check out the housing situation both rent and buying? I do this often with my husband to check out different places in California. We do the math based on airbnb costs and Zillow to picture what it would cost for us to live in the area we go to. We’ve done this for LA, Reno, Sacramento, and many other places.
Sacramento is a place you may consider. There’s a lot of expansion and since the CA government is right there, there’s a lot of urban planning going on. Plus housing is still affordable but demand is increasing rapidly due to Silicon Valley people moving to Sacramento and Lady Bird portraying it in a very nostalgic way.
Sacramento also has its charm, being close to wine country, etc.
Let me know if you have any questions I can help you with.
I wouldn’t worry about how moving at certain ages would affect your child or future children … I grew up as a military kid and when orders come to move every three years or so, it just IS. Opportunity for new friends, new cultures, new experiences. Good luck!
Good points. I guess it also may come down to how we approach the move as a family and how adaptable the kids are. Hopefully we would be able to communicate with our kids our thinking and that we can have the potential moves be opportunities as opposed to traumatic experiences!
Seems like your heart is in LA so you should move there, stay there and run for public office there. The advice that you must own a car in LA is a limiting belief. If you rent when you get there you can locate a transit friendly walkable community, such as Santa Monica. If you keep crushing the frugality game eventually you will be able to own your dream house in Los Angeles. ChooseFI interviewed a couple who own a house in LA with a a very modest income. You just have to think a little bit differently. https://www.choosefi.com/041-high-cost-living-path-fi/
I hope they are not considering public middle schools in NY. That is the age when parents transfer their kids to private schools because the middle schools are so bad. A decent private NYC middle school is at least $10,000 per year and that is the low end.
This is absolutely not true. There are some great middle schools across the city. I don’t know anyone who hasn’t sent their kids to public middle school.
One practical point to bring up about NYC schools is the selective test exams for middle and high school. You can only take them if you are a current Resident so you need to know when to come back to NYC. Btw we some great public schools. I have one kid in G&T middle school in BK. Go Mark Twain!
Yikes. All I could think while reading was: you will not save money by moving to LA, or if you do, it will be negligible. My husband and I live here now with our 3 month old and are plotting our escape. We moved for his job, but even with the salary increase, the cost of living here is ridiculously high and frankly, for what? Even living in a walkable area (Downtown- the most walkable, besides K-town) we feel like we spend our whole lives fighting traffic. We like the outdoors too, but getting to the beach, hiking, etc means…you guessed it…wasting half the day fighting traffic. It’s not a great way to live.
You said your current rent is 1750 for a 750 sq ft condo- I don’t know what you can find for that here. I’m pretty sure a studio in Santa Monica would run you upwards of $2,000/month, it’s an extremely expensive area, and Los Feliz is not particularly affordable, either. Plus, you will be spending so much (in money and time) on driving…unless you get the magical job/work situation where you can efficiently commute by public transit , which is pretty unlikely here in general and extremely unlikely if you end up working on the west side. A commenter above who lives in Seattle said you don’t need a car in L.A. and that you can discount that as a cost-that is patently false, especially with kids, unless you want to spend all your free time riding public transit. I’m sorry to sound like a downer, but reading this, I just don’t understand- why L.A.?? There are so many other cities with opportunities for job growth and proximity to the outdoors. If it’s what you want, then it’s what you want, but I just want to give my perspective, since we moved here for similar reasons to you and can’t WAIT to get out once my husband finds a new job.
As someone who just spent 8 years and California and returned to the Midwest (Minneapolis), don’t do this! Your monthly income is modest for your dreams, and I don’t think you can bank on what you think will be higher wages as urban planners in LA. When I think of spending $800,000 on a smallish condo, well, it almost gives me heart palpitations. Have you considered a city like Minneapolis where the cost of living is much less and salaries healthy? You would not have to come near $800,000 for a lovely home, and it won’t drain your life savings getting into one here. By the time you add childcare and a vehicle in LA, I think you will be positively living on the edge.
Hi! I am very impressed with you, Mrs. FrugalBrookly! I don’t have time to read other reader’s suggestions, so I maybe repeating them, but I agree 100% with Mrs. Frugalwoods response. I would just add this:
– You mentioned if you had a car, you would consider offering it on a “car share app” so why don’t you use that app for yourselves, borrow your neighbor’s car, and keep saving your money?
– For cell phones my husband and I pay only $35 a month for our Smart phone service. It is $10 a gig for data, but they charge down to the penny. This is really motivating to utilize WiFi and save on data!
– I say stay home with your child because you are able. I stayed home with my children for seven years and I do not regret it in the least! What I did to cover the resume gap is I got another degree at night after a few years, so I reset my career and had no trouble securing a position. Also, have you considered starting your own home based daycare? Even taking in one child could really supplement your income and give your child someone else to interact with too. By staying home you will have time to be able to raise your child with a lot less stress for both of you (no need to get dressed up or wake up with an alarm clock, etc.)
I realize this won’t help you, but perhaps others will read it and benefit: When my husband and I married we planned that I would stay home with the children for a period of time, so we saved and invested 100% of my income. That was such a good decision for us, it meant we got accustomed to living off only one income, so once we had children, we gave up nothing.
-I think you should stay where you are and save money! NYC is a great city and you have positioned yourselves incredibly well for such a high cost city. It works for not having a car; works for low rent; works for you to stay home for as long as you want; works for your husband’s political carreer; and you two can still save money!
I would agree with others that I don’t think you will net a big difference in savings once you move. We are moving just two states away and it will cost at least $2,500 to move our things alone. Have you thought about Denver? It’s growing tremendously and could use some common sense urban planners. For reference we are listing our house this spring for $750k and that is for 2,300 square feet and a two-car garage. Hence why so many from the L.A. and NYC areas have moved here and paid cash for housing. Good luck!
We have been really considering Denver. It does seem like the best of both worlds – urban with fun neighborhoods but affordable and lots of outdoor activities. Wow nice price point re house listing. Paying in cash for a house would be one of my next level goals!!!!
As a former New Yorker who now lives in California, I have found that expenses here are HIGHER than they were in New York. Plus, a car will be a must for you here and they are like big expensive pets that you have to keep feeding (with cash!). I would definitely investigate why you think LA would be any cheaper than New York before moving there.
Ok. Perhaps the affordability argument isn’t really there for LA versus NYC, we will crunch the numbers carefully. But on its face even if car is more of a necessity in LA, it’s cheaper in terms of food costs, you don’t need all that winter gear, and maintenance costs in general are lower. But we will crunch the numbers! I’m sure like in NYC it also depends on exactly where in LA / Cali you live.
I want to encourage you to prioritize your dreams, make some compromises and consider some more options. Re childcare: I used a local grandma who loved my two kids alongside of her own grandchildren. Very flexible and inexpensive and loving. Ask all your friends who they use, many might use their own moms. I believe nannies are for women who make a LOT more than you do. I hear that you love surfing and warm weather…California is GREAT for that but you are looking in the wrong place, LA. Try San Diego and the 90 minute drive perimeter around it. Same with other large cities in California but not SF or LA. Not at all sure LA is right for you…it is NOT NYC and everyone drives long distances either in commuting or getting to fun areas. Find inexpensive vacations and ways to save money…weekly beach apartments, etc. Many smaller cities on the coast are expanding and need planners. Buying a house while you are expanding your family AND searching for a place that you will BOTH enjoy living…may or may not be out of the question…but you can’t have it all. There are places in California where you can buy a good house for $200,000…but it is not anywhere near LA…but it is near Sacramento! We are three hours from the ocean. You can get a $1600 monthly rental two bedroom apartment in Ocean Beach, San Diego, up the street from the beach…you might find you like it more than LA AND you are still driving distance to your family. Lots of things to explore re California, child care options, don’t buy a car until you live somewhere where you need it daily. If you love NYC life otherwise, then maximize those California beach vacations and go for a month every year. Another option you haven’t mentioned: look for greater work/salary opportunities in the NY/NJ area. That 1% NYC income tax is a killer, my daughter lives and works in Manhattan. Good luck to you!
Great feedback all around! The name of the game for us is to prioritize what we want, scenario plan and also be open to other potentially coastal or inland areas in Cali that would fit the bill for most of our desires. I actually do like the idea of San Diego, especially for the surf!
We def have been looking for higher salaried positions while we are still in NYC. So far no dice. Now that I am a mom more important than salary to me is flexibility.
Sounds like you guys have got your heads on straight when it comes to being smart with your money, and I’m sure you’ll make the best decision for you and your family! Being a stay-at-home myself, I highly urge you, if you do choose to stay at home longer, NOT to saddle yourself with the lease or car payment that a new car would likely incur upon you. We live very frugally and are able to save very little per month, but it’s been totally worth it for me to stay at home (and since my profession–teaching–is one that’s not difficult to find a job in as long as your license is current, I haven’t needed to worry about any gap in my resume. I don’t know how your career field works on that, however, so I don’t have advice for you there!). However, the only way I’m able to stay at home without worry is because we also have NO debt (other than our mortgage), so I highly recommend you stick with the good thing you’ve got going there.
Best of luck to you, and congratulations on your new baby!
I see. Noted – keep costs low so that the freedom of deciding to stay at home if I decide that is an option.
I’m hoping that the potential gap in my resume future employers would understand.
We will consider the car challenge and try and limit our expenses regarding that item.
I know this is not the advice you asked for, but if you are looking for a big city with a lower cost of living, wide open spaces, and a desperate need for city planners, have you considered Houston? You could buy yourself a whole house in many desirable areas for way less than $800k! The driving is horrible here, but I hear it’s worse in LA, and at least gas is cheap here. The weather is great, the people friendly, the food is inexpensive, and economy booming. That’s my unsolicited plug for H-Town! It sounds like you guys have lots of good thoughts and ideas, I would be cautious about moving if you plan to return to NYC.
We have considered Houston! When we visited a few years back we wanted to visit the Montrose neighborhood which I heard was quirky, walkable and had a fun vibe. We can keep it in mind. Yes, many people have said the same about leaving NYC when we plan to return anyway. I guess the main thing is even though we want to return to NYC, it feels a bit stagnant here in terms of the urban planning. Infrastructure is crumbling, the transit system needs a lot of work, and a lot of fresh, new innovative ideas get ignored. LA and other growing cities seem t be leapfrogging older cities.
Re: nanny: try finding a nanny share (one nanny for two families). We did that, and it was great: cheaper than a regular nanny, still a lot of personal attention, and a buddy to play with!
Re: moving with a 10 year old: we went to live in another country for a year when I was 10, and I didn’t miss my old friends at all, and would’ve been fine just staying there! Then again, maybe I’m weird 😛
Hi! Yes we are strongly considering nanny share — seems like the best of both worlds!
Yes, I hope that our kids are just as adaptable as you were as a ten year old but I guess we won’t know their temperaments and we would want to keep that in mind.
I have lived in Southern CA all my life; when I bought a house 7 years ago, I bought in a neighboring county and paid a lot less than buying in LA County (valued $400K); there is a Metrolink that you can take into downtown LA or nearby. LA County is outrageous in housing prices, especially Santa Monica or Los Feliz (values approx. & $700K 1 bedroom ). You will need a reliable car, tons of places to buy used cars. I would suggest you do your homework on it all; if you live near family, maybe they can help out with babysitting now and then and you can work part-time; medical insurance has gotten expensive. Good Luck
Thanks for all the feedback. True, we can live in an area that is easily transit – able to downtown LA and not necessarily in the city proper, especially if we are thinking of public schools.
Good to think creatively re childcare. And it’s unfortunate that health coverage is tied to employment but definitely important to consider re the Work versus not working scenario.
There are already a zillion and one comments on this post, but I thought I’d chip in with my thoughts 🙂
I’ve lived in both NYC and LA (well, technically the greater LA area). The way I think of California is a bunch of smaller “towns” connected by horrible highways. Kinda like New Jersey – you could probably get along fine walking within your town, but if you want to go to another town, it’s most convenient to drive.
In LA, try to get a car that can use the carpool lane all the time, even without 2+ people – I think some electric vehicles qualify for that.
I don’t recommend street parking in NYC. I’ve done it myself a couple of times, and in some areas it can be really hard to get street parking. People literally sit in their cars and waiting for the street cleaner machine to come around, leave their spot right before it comes, then slide back into the same parking spot right after. Also, you have to arrange someone to move your car if you go on vacation.
Good luck with everything! I will say the weather is better out here in LA 🙂
Thanks for the tips on driving & neighborhoods in LA / So Cal, and street parking in NYC! Ah good to know re cars that can always be in the carpool lane in LA – nice tip.
Haha. Noted re weather.
Congratulations on your new baby!!
Just a small comment. Make sure you actually want to stay home with the baby. I always thought I would like nothing more than to stay with my baby when she was born, but the reality was very different. I cant tell you how much I loved returning to work.
Best of luck!
Thanks for the comment! I will definitely make sure I consider carefully whatever decision I make re staying home or working or whatever in between. But I’ve been really surprised at how much I really enjoy being with the kiddo and all that there is with child rearing. It’s a whole new world I sort of have fallen in love with! That being said, my career is also important to me. Perhaps this is the season for the kiddos and the career can be picked up in a different iteration! We shall see.
Hi Mrs. FrugalBrooklyn! Thanks for sharing your case study. Have you considered moving out of BK but staying in the tri-state, rather than moving LA? I live in CT, right over the NY border (Danbury) and have a nice house and large property for $300k. Full-time daycare for my 19 month old costs me $1300-1495/month (depending on how many days each month is.) I am from Long Island and lived in Westchester County before moving to CT, and although they are all considered expensive, you can buy a house in any of those areas for way less than $800k. They are also all commutable to NYC if you’re husband wanted to keep his current job but you wanted to own a house in a cheaper area than BK. Good luck in whatever you decide!! 🙂
I live in Southern California. If you aren’t staying in the state for the long haul, don’t buy real estate here. Find a good rental if you are coming out, but I think since your heart is in NYC that you should look into staying there since you plan to go back to NYC and run for office. With high home prices in Cali and with you guys thinking about a condo, a lot of gains you may see in real estate out here will be lost in commission sales.
Also, i’m sure your aware that “LA” has a diverse culture and not all areas are the same in the city, but what you might not know is that the demographics change as the economy changes. A place you lived in for a year and thought was great can turn real bad, real fast with a crappy rental in an adjacent unit. I speak from experience. When we first bought our original condo, it was the bottom of the market after the bubble burst… LOTS of rentals were created after I bought as cash buyers bought up foreclosures… So the area kind of took a spiral down…
Now that prices are higher and the market is back up at the peak, we are seeing more families move in…. but also large families in small rental units because it’s expensive to live here… all these things change the community vibe. We lucked out and sold our 1 bedroom before the “creepy” people moved in across from our old place (Cops are called regularly). Our old neighbors tell us we sold at the right time when we got out and moved to the other side of the complex. The family above us rents a 2 bedroom. They are a family of 5 people and then they rent out the smaller bedroom to another person. Thankfully for us, the kids are really nice and respectful, but that’s not always the case… and since I know the kids have no space to play indoors, I don’t really get upset if they are playing near my front door because it has more shade. Others would be REALLY upset with kids running right by their front door when the steps only lead to your unit.
What a lot of wonderful dreams! There are so many good ideas for you to consider here that I am only going to address two. One is the major elephant in the room and the other is retirement.
Let’s take the easy one first. Retirement: Never discount Mr. FrugalB’s retirement fund. I am making the assumption that is only his contribution to what appears to be a PERS system (Public Employee’s Retirement System). If so, guard this with your life. Even if you move it will continue to build (both his contributions and those of his current employer) and down the road you will have a life time income from this. Don’t even think about cashing it in. Combined with your other income streams in retirement it will be of benefit to you. If he decides to accept another government job in some other State, it may not be transferable. I have two examples from experience: Washington didn’t accept transfers from California (me as I wanted to move sooner than I did, and didn’t because of this), but California accepted a transfer from Oregon for a friend of mine. More things to research when setting your priorities. You never know what the future will bring so it is wise to check this out just in case.
Now on to the ELEPHANT in this mix. Your husband will be in his mid-forties if you return to NY. That is really too late to get started. He should be starting now by investigating Boards and Commissions that will not interfere with his job. On my second round with a PERS system one had to declare to the employer any second jobs, etc.. That’s when I put my extra job hacks into “stop”(some really odd-ball ones from time to time) and concentrated on fixing up houses and selling them and moving around a lot doing same. Your notion of teaching, etc. is a good one. Does he have a teaching certificate and a Master’s Degree? If not, is it reasonable to buckle down and get that handled now?
If you move to another State it will be difficult, if not impossible, to get established there in the political arena. He can do that now in NY by getting involved in party activities and working on some one else’s campaign. Use this time as an apprenticeship in the political life. You both have a “presence” in NY and it is totally doable there. The west coast, and especially California has a very different culture and one that will be hard for you to enter.
The sad part about all this is that it puts the political hopes as the number one priority. Either stay in NY and go for broke politically now, or move to California and give up political goals and concentrate on family. I know this is not what you want to hear, but I feel strongly that this elephant has to be addressed and agreed upon. Keep working on this until you are both sure you are on the same page. This is only meant as something to chew on in your deliberations. If you still want to go with your original plan, or any other plan, I wish you all the luck in the world. It takes a lot of guts to even consider all the potential changes.
I am older and only commenting on the moving closer to grandparents issue. My mom moved two hours, to be closer to me to take care of her four (only) grandkids. I was an only child. My children adored “granny” and she adored them. When she developed alzheimers, my three sons helped take care of her….for eight years. My daughter was in the military and living thousands of miles away, so she could not help. I am thankful for the close relationship my kids had to their granny. I wish you blessing and success in your career and family, and hope you are able to live closer to the grandparents.
Hello. I haven’t read all the comments so this may be repetitive. I live in LA. It’s extremely expensive and property taxes are really high. Santa Monica is amazing but it’s housing prices are through the roof. I don’t think you could find a 2 bedroom condo for $800K. And if he wants to run for office in LA, Santa Monica may not be the best launching pad since it’s another city. Downtown is transit friendly but my guess is the schools aren’t great. Nannies and daycare tend to be a bit cheaper here than in NYC it SF. I also don’t know how realistic it is to buy a duplex. I know people who are buying a triplex right now, fully rented, and it won’t be cash positive for 5-10 years – and they aren’t living there, this is purely an investment. I actually know a lot of people in the planning field here and really exciting things are happening. But it is in no way a place you go to save money. The build out of the transit system will raise housing prices even more.
I’m sure there is incomplete information here, and maybe I’m reading too much into the disparities between what you way you want to do and what you say your spouse wants to do, but I’m not sure you should be trying to make these kinds of big decisions right now. It sounds like you and your spouse need to do a lot more talking about what you want to do and where you want to be. Frankly, your desire to live in LA and your spouse’s desire for a NY political career do not mesh well. If he’s interested in running for office in NY in a decade, he has things that he needs to do *in NY* now and in the near future to build to that goal.
My spouse and I had a variety of incompatible goals and had to do a lot of compromising. There are some things that are really place dependent, and sometimes one has to give up a bunch of other things to make those place dependent things happen. That said, if more contact with your family is important, could you pay for them to fly in and visit you more often? Especially if you have retired parents, they may be more flexible in terms of when they can get away than you are, and in a few years (no more lap seats) it will be cheaper to fly two people than four.
Great job on saving and Congratulations on a new baby, Mr. and Mrs. FrugalBrooklyn!
I think you could cut back on travel savings and focus more on free local entertainment. I would put international trips on hold especially with a new baby and bigger goals on the horizon.
I think you might be able to save more by focusing your shopping at Trader Joe’s. Costco has good prices, but sometimes food gets wasted when purchases are made in bulk. Try setting lower food budget goals each month.
Your household budget also seems high. Comparison shop as much as possible (w/o) a car. Switch gears from prepackaged cleaners and use vinegar and water to wipe windows and countertops. Buy a big bag of baking soda (at Costco) to clean your sinks and even get out coffee stains in mugs!
As a SAHM I find the first year is so important for bonding with your baby. They change so much in a short period of time! Definitely see what business you can start from home to offset costs and add to savings.
I’m really concerned about your move to LA. It seems like you should decide now where you want to call home. Maybe stay in New York and plan 2 big trips to CA a year? Or move to CA and settle in. I personally think CA is beautiful and love the warm weather there, but it is a different life from New York. A bonus to CA, you could save with the year round fresh produce! However you would want to add a car so you can make quick trips to the ocean and to all the neat parks.
Last, it takes time to develop trust and friendships if your husband wants to get into a political office, he may need to decide now. Happy planning!
These are all extremely expensive grocery options, especially by NY standards.
I know I’m late to the party, but a few thoughts about the car issue. Do yourself a big favor if you do come to CA and don’t buy a car before you get here. CA has some pretty stringent air quality requirements when it comes to cars and it would be very costly to retrofit a car from the east. Another thought, I am aware of others who have moved here and not easily found buyers for their east coast cars due to rust, salt, etc. just another consideration.
It seems like you are wrestling with the complications of a bicoastal relationship! I agree with the previous commenter who suggested the idea of a spreadsheet of pros and cons. That having been said, sometimes one desire or need will throw the spreadsheet to smithereens (grandparents etc). It seems like you are trying to split the difference with New York and LA, but ultimately you will have to pick one. I agree that the idea of going for ten years and then moving back sounds impractical, as well as unwittingly unfair to the little one. There is good evidence that moving is very bad for child development: https://www.washingtonpost.com/news/wonk/wp/2016/06/13/moving-as-a-child-can-change-who-you-are-as-an-adult/?utm_term=.ad36b68271ce.
If you feel that you can’t commit to NYC without trying a year or two in LA, move ASAP and give it a whirl. That way, if you choose to move back, you can return to NYC when your child is still small enough to adjust well to the move. But go with the idea that you will come back within 3-5 years or commit to staying until your child is of age.
As to the financial aspects, the concept of cars and nannies and huge vacation budgets are so alien to me as a native New Yorker that I don’t even know where to begin! I would avoid all three for the foreseeable future (I realize transit in NYC is in a death spiral, but use Uber etc). I’m not sure when you last lived in LA, but the cost of living has really skyrocketed there over the past decade, the schools are much worse, and you need two cars pretty much everywhere.
It’s hard being from two different places, especially with the inflexibility of modern corporate culture. But ultimately you will have to pick one place. My guess is if you try LA you will know within a year or two if it’s the right place for you.
My in-laws just moved to LA. We just visited, and I was shocked at how expensive everything was. We live in just outside Boston where things are also pricey, but not LA pricey. We also drove everywhere in LA. I did like the weather though!
Interesting points. But one point that is very relevant is the amount they plan to sink into housing. California real estate is very expensive and the economy is taking a hit there as businesses are relocating out of California due to the high cost of doing business there, so an $800,000 home may be difficult to seel in 10 years. Here is a link detailing the exodus.
So looking at renting for the first year or so to see if they really want to be in LA before they commit to such a monumental expense is wise. The fact that they are very responsible with their money is a breath of fresh air that would hopefully be welcomed by voters. Seems every politician seems happy to tax and spend promising everything to everyone without consideration of the financial implications. Also with the state of California being on the earthquake fault line, their LA home may be at risk, so having good insurance against such natural disasters and flood insurance is a consideration as I know people who chose not to buy a home when they/found out the home was considered in a flood plain and the added cost was over $10,000 a year! A significant deal breaker. Looking ten years or more out is definitely a good idea. While I am more of a rural lady that that is not planning on living in the metropolitan areas, the cost of real estate was a big factor for us as we wanted land with it for gardening, our orchards and beekeeping. Living in the big city means you have little space for those type of projects. And Mrs Frugalwoods is right that the $35 a month is not much for hair care in the big city. While she and Mr Frugalwoods are adept with the shears and clippers, not everyone is willing to try. My husband cuts my hair, my children’s hair as well as my mom’s and a couple friends of mine. He even sharpens his hair shears at home on a flat hone tool he bought, to keep them sharp, but among pretty much all of my friends, they say your husband is awesome doing your hair, but there is no way they would let their husbands cut theirs. And my one friend tried cutting her husband’s hair, and he had to go to the barber to fix it and the barber ended up just shaving him bald as he couldn’t salvage it. So knowing your limits on DIY are a consideration. But good luck in the adventure.
Kudos to the FrugalBrooklyns for their money-saving habits, and excellent financial position! Also a kudos to Mrs.Frugalwoods for so kindly and thoughtfully providing a reality check. I’d just like to add my 2 cents:
1. While I am ALL FOR working mamas, from a financial standpoint I don’t think Mrs. FrugalBrooklyn going back to work makes any sense. Unless you can find a nanny much cheaper than your expected cost, or enlist the help of familyand friends ( (is this an option? You didn’t bring it up, but I think it’s a great way that many families delegate childcare!) to help take care of Baby FrugalBrooklyn, I think hiring out help puts you in a much worse financial position, and honstly seems like quite a hassle for little gain. I know the decision of whether to work or not is complex, and emotional, and hard, and I’m a stranger on the internet 🙂
2. +1 to all of the money-saving recommendations. I think the key for you is to **find what you really enjoy** and prioritize that. There’s nothing wrong with setting aside $40 / month for wardrobe updates if you love expressing yourself through fashion, and would feel like life was less fulfilling without it. But do you really love getting your hair cut, or buying gifts instead of making them? Don’t live a miserly life, but don’t waste money in areas you don’t care about. And finding what you do and don’t care about is the real work to be done there.
3. I’ll just echo with everyone else that buying a home in LA seems….ill-advised. If you can find a cheap place to rent, great! If you want to move somewhere cheaper, great! But I really don’t understand why you chose LA, or why you feel the need to buy a house…
Ok, those are my harsh comments. Kudos to you for putting yourselves out there, and good luck!
Okay, let me play Debbie Downer. You guys have done so well financially up to this point. If you really want to move to LA, take 2 weeks, fly out, and do your research. I grew up in Los Angeles and I love it there. I left in 2000 because I couldn’t afford it any longer on a salary from a major utility company. Don’t even think about living in LA without a car-period. Oh, I know that you have heard about the new train system, and the bus system and expanding transit lines…..um, no! You need a car!! Going from Long Beach to LA downtown is a 2 1/2 hour one way commitment on a good traffic day. So much of your day will be “commuting” on freeways 6 lanes in each direction. And it is exhausting. $800,000 is nothing for a house in LA. A friend’s son works for a major construction firm, with state contracts up the ying yang. This kid has a masters in engineering and makes $10,000 a month. He and the girlfriend rent a duplex by LAX that is 750 sft, built in 1948, and he pays $4000 a month for this privilege. He is honestly considering a job transfer to Fresno (Fresno!) for the same salary and much lower cost of living. Don’t get me wrong: I love Los Angeles. It is exciting, fun, great people, fabulous restraurants and plenty to do. But, you will definitely pay for it. And once there, you will not volunteer for those frozen NYC winter days again! 😎 I say you guys need to exam your hearts, do your investigation, and then make a decision. Let me put in two cents for my adopted city: Sacramento. Fun city, great people, but much, much cheaper to live in. And-we are close to skiing, wineries, San Francisco, and hiking the beautiful mountains. Good luck!
Hi FrugalBrooklyns! I live in LA, have lived in Los Feliz/Silver Lake, and know a ton of recent NYC transplants. You get a lot more bang for the buck (more square footage, green space, parking), but it’s still expensive. I would plan on buying a cheap car or two; used cars tend to be in pretty good shape here because of the climate. Although I’m a fan of public transportation, I never take it in LA due to frequent delays. Sadly, public transit ridership has been dropping even as the city has invested more in it. That said, we are in need of good urban planners so please move out here! 🙂
The housing market is insane. Houses listed for $800,000 will sell for over $1M with 20+ offers, some all-cash. There isn’t really a condo culture here, and you might feel out of place living in a condo with kids. I would definitely rent while you get your bearings. Rent is high as well. Most New Yorkers still find LA to be a bargain, but you won’t be able to come close to matching your great rent in Brooklyn. Anyway, I feel like the LA housing market is peaking so I wouldn’t buy now.
I would only move if you plan to stay. (I’m a big “grass is greener” type and spent much of my 30s plotting to move out of LA for cheaper pastures, so I can relate.) $200K is still a good salary anywhere, and with a few adjustments (swapping daycare for nanny is a big one), you can live a comfortable life in LA. If you want more nitty-gritty details about neighborhoods/daycares/public elementary schools between downtown and Northeast LA, send me an email or DM me on Twitter. Good luck with your decision–you’re in a very exciting phase of life!
Hi! Love your blog!!! I definitely will reach out to you because of your perspective and experience on LA and you live in the kind of neighborhood we want to live in! I also like your more positive attitude about our potential move. I know it doesn’t really make financial sense for many people and I’m definitely giving it more of a second and third thought but it’s nice to know that it’s not completely ridiculous of a notion. It’s also nice to know LA is still in need of great urban planners. Honestly the thought of doing great work on a burgeoning urban LA really does entice us to no end.
Good points about renting before buying. I do see the housing market peaking in LA in the next few years.
I will reach out to u! Thanks for offering to connect!!!!!!
I would suggest not making any major life decisions for at least a year after childbirth!
I would also recommend settling in for the long haul by the time your kids start elementary school. Long term friendships are one of the best commodities out there! You can’t put a price on being a long-standing member of a well-established community.
We are in Denver. We love it here, however housing is crazy and you will need two cars here.
Ok. We can wait until Baby FrugalBrooklyn is a year old. Good points re long term friendships.
We have definitely considered Denver!
I second what someone else mentioned about travel hacking! If you’re taking one international and multiple domestic trips every year, you will save an enormous amount of cash doing this. We began travel hacking this summer and in just a few months we had enough points to book a round trip business class flight to Greece for 2 people for $203. For 2018, we are also going to Las Vegas, New York, St. Louis, and Costa Rica (staying at an all inclusive resort for free with Hyatt points). Plus we will still have points left over to go to Hawaii and Mexico in 2019. It’s worth looking into and it doesn’t take much effort really aside from paying your bills on time.
Also, as a NY native who now lives a country life–you absolutely DO NOT need a car in Brooklyn. Owning a car in a place like Brooklyn is just a luxury rather than a necessity.
So many people have mentioned travel hacking that we might need to start. How do you recommend we start? We have the Jetblue Rewards Card. Shall we look into others? I would be worried I couldn’t keep track of my accounts but then again I think it’s just a matter of being organized. We do love to travel so it would be nice to do so more affordably.
I highly recommend TravelMiles 101–they have a free travel hacking course, which I think is the best.
Just a random thought. I’m not sure how much of your thought matrix to moving to LA is to be with your family. When our kids were very little, it was easier and more helpful for me to have family come and stay to help out. Granted my husband deployed for a year and a half when our kids were 3 and 6 months old and I was not working, but the concept is the same. My mom would come, fill my freezer with food, give me time to catch up on any projects I had, then fly back home. My husband’s father is not as financially secure as my parents, so once a year we would buy him a ticket to our home, he could see the kids, and he and my husband often did a project together like staining the deck. This was more frugal for us because one plane ticket is loads cheaper than four tickets and a week in a hotel.
I realize that your situation is different as you have a one bedroom in NYC, but should you wish to travel without the children this is something to consider. It was so successful for us with our parents that is has changed our thinking about our “forever” home. We no longer think it is necessary to have a large home that all the kids can come home to. Rather, we plan on a small, more manageable house and being financially solvent enough to be able to go see our adult kids and help out with any future grandchildren.
I love thinking about these alternative and creative arrangements! Should we plan to stay in NYC, we would definitely spring for the west coast granny to come visit a good chunk. Also I love the idea of having grandparents be with the kid if we wanted to travel sans kid. Thanks for your thoughts!
Hi Mrs. FrugalBrooklyn,
I’m commenting for the first time on your post mostly out of homesickness–after 18 years in the city (10 of them in Brooklyn!) I moved to NJ last summer. Our life here is good but I miss my Park Slope neighborhood. Our move is not as far as LA, of course, but having had 2 kids in the city and now relocating elsewhere I feel like I can offer some advice.
First– We’ve used every combination possible of childcare over the last six years and the part-time nanny share was the cheapest. With my son, we found an existing nanny share with 1 full-time child and 1 part-time and we took the other part-time slot (so the nanny always had 2 kids to watch). Begin looking NOW on your neighborhood listserv or facebook group. Get the word out that you want an arrangement like this. It will take some hunting and many false starts to find, but I think you can. I loved working 2-3 days a week. It let me keep my sanity, make a little money (just enough to cover the childcare), and feel like I was maintaining my career but also gave me the time home with my infants that I needed.
Once my daughter was born the nanny share wasn’t practical any more. Nanny shares are tough to coordinate with multiple children in multiple families. At that point–he was 2– we switched my older child to part-time daycare and my daughter eventually did the same when she went into daycare 2 days a week at 10 months.
Another big benefit to staying in NYC is the UPK program. My son did his preK for free at our local zoned school (which was excellent) and had a great experience. If your school isn’t as good or the preK is full, I know many people who did UPK with one of the community partners and it was also great– though some preschools only have space for continuing kids, not new ones, so that’s worth considering as you make preschool choices. And now deBlasio is pushing for U3K! If we had stayed in the city this year we’d be sending both our kids to school full time for free. Thanks to differences in age cut-offs and moving to a town with a half-day K, we are instead back to paying double tuition.
Finally, we are spending more monthly now that we’ve left the “expensive” city. We need two cars, and while both were bought used, we have to pay for gas and maintenance. With taxes and insurance our house costs more than our co-op did. Many things–preschool tuition, groceries, swim classes–are cheaper here, but the big ticket items aren’t so it winds up a wash. But we get much more space and I have the comfort of knowing our growing family can fit into this house and our children have great education options until they go to college. NYC public middle school applications are rough. My husband especially loves being out of the noise and crowd of the city, though I miss it fiercely. My kids are still little– 6 and 4– and have adjusted well to the move.
Good luck to you! Sounds like you and your husband need to spend some time prioritizing the personal/political/career/money goals and figure out what will make the most sense then. But you seem like sensible people so I’m sure you can do it!
We bought both of our cars used with cash. I couldn’t recommend it enough. It is great to not have to remember another payment every month and you don’t have to pay the stupid interest.
Kids don’t have to be expensive. I recommend buying everything you need for kids used at consignment sales. We have saved hundreds, if not thousands, of dollars on baby/toddler things from consignment sales. And we can sell them all back to someone else for a similar price to what we paid for it.
Fellow urban planner here, incredibly jealous of those salaries since I have yet to make more than 50k/yr here in Southwest Florida, and that was as the acting Community Development Director. But the upside is great weather year-round and I bought my 2br/2.5ba townhouse for $175k.
I think you should stick around Brooklyn in the setup you currently have. You’ve got a great savings rate (and suggestions on how to save more), you don’t have to buy a car, and it gives you the flexibility to stay home if you choose to do so. For reference, I just calculated the total cost of ownership for my vehicle I owned from 2012-2017 (62 months) and it was almost $7000/yr BEFORE counting gasoline. Granted, I was an Uber driver on the side so that added unnecessary miles and wear&tear but depreciation, insurance, and maintenance are not insignificant costs.
Last comment would be to check out the free travel hacking email course already mentioned above TravelMiles101.com, I love that I could fly anywhere in the world right now and stay in a luxury hotel, all for free. I haven’t used many of my points yet but I’ve saved up nearly a million in free points and miles
My husband and I use Ting for cell phones. They charge by usage so if you’re smart about it you can save a lot. Data is the most expensive so I try to be on WiFi as much as possible. You can use apps like Whatsap to use less minutes too. In some cases you can bring your own device. We end up paying between $40-55 a month for two smart phones and if we worked even harder we could bring that down I’m sure.
Hi Mrs. FrugalBrooklyn! Thank you for sharing your story and let us weigh in with advice. I hear a lot of people saying don’t move to LA and I’m going to be one of them too. I grew up in LA and currently live here, but in a few months we’re leaving to the UK. My husband moved here from the UK 4 years ago and this whole time we’ve been struggling to enjoy Los Angeles. The prices are so high that a lot of our money is tied up in necessary COL expenses and it’s really been unaffordable for us to do almost anything except go on free hikes and try to take advantage of things like free museum days. We own a 3 bedroom home in LA, which we got for $435,000 in 2015 and is now worth at least $650,000. Property tax has been more than $5,000 a year plus homeowner’s insurance and earthquake insurance. So you can still get homes for less than $800k, but not in Santa Monica or Los Feliz. The tradeoff is a higher crime rate and worse schools, both things we experienced in our area. Between the traffic and extreme heat, we’re not enjoying it at all but everyone is different and there are lots of things to love in LA if you have extra cash to indulge in the activities.
However, as someone who also moved back here to be near my family, I totally understand that wish. As an alternative, is there any way you might be able to take longer or more frequent trips here or if time off work is an issue for you could you even use some of the savings from not moving here to help your family travel to you?
The other thing I wanted to add is about public transit. I take the metro frequently and have found it to be quite useful, but mainly because I try to go to things that are right off the metro stops. There are lots of times though that we have to get off and walk a few miles to get to where we want to go. The city is not designed with any shade so in the summer these long walks are a slog. We’ve waited for buses that never come and then we’ve been stuck too. It’s an exciting time to see the metro line extending, but it’s also a very slow process while you’re living here waiting for them to finish. Surely they’ll be further ahead in 2 years, but right now is a middle point where we can see all this development happening but it hasn’t become especially usable yet.
I hope you find a situation that works for you and your family! All the best!
Sorry if this is a double-up; I didn’t read all the comments (so many!)
There’s $50 / month for each of you (so $100 / month for both…or $1200 p.a.) for discretionary spending including after-work networking and coffees. Some things to consider:
Are these socialisation / networking things going to help your long-term goals? For instance, do you network with people who have contacts in LA who could help you find employment there, or are they people who can help you more in your current situation / careers, or possible long-term political aspirations? That might help you decide if they are worth continuing or whether you need to find a new group of people with whom to socialise, or even help you crystallize which goal(s) to pursue.
Assuming you continue socializing this way, perhaps consider switching water for coffee (yeah, yeah, sacrilege! horror!). I am assuming here that non-bottled water is free – you won’t be charged for a glass of water – as it is here. If anyone questions the switch, just tell them that you’ve heard that increased caffeine consumption increases the risk of not having a live birth (reduced fertility, higher miscarriage rate) – this applies to both men and women.
Hi! I don’t know much about CA. I live in South FLorida. We moved here from NJ 22 years ago. What I would like to point out is that there is a common mistake of thinking that if you live in a warm area, the cost is lower without winter gear, heating, etc. We have our AC running 24/7 for 9 months out of the year. Frequently the AC units in our home or cars need fixing or replacing. I am imagining it must be the same in LA. Lawns have to be mowed and upkept year round. So in a warm area you either have to plan for that or hire someone. If you live in a condo, they usually do lawn and pool maintenance as part of their Condo fees those can be very high per month and those get raised every few years. In fact living in a condo you are at their mercy. If the condo board votes to say…put new roofs on all buildings then you have to pay your share. My neighborhood has an HOA fee which also can be ridiculous. I just thought I’d mention some things everyone might not have thought of. We have to have hurricane shutters and hurricane insurance. We thought leaving the northeast would be cheaper. Some things are Harper but honestly most things are the same as they were up north, such as food costs, daycare. Some of the things they’re just different things you’re paying for like AC instead of heating. Do a lot of research no matter what! Best wishes to you.
May have already been said, but:
1) I live in California. With the current housing crisis, huge taxes and cost of living (yes, not much different that NYC) I’m not really sure it’s worth it to move here unless you have a crazy high paying job. I see friends in the tech industry who make ~$200,000 feel like they are struggling. Yes, they may be making non-frugal choices but also things here are expensive and they get more expensive as your kids age. There are ways around it, but it takes time and creativity which some people may not have the ability to do. You sound like you can, but do you want to? Also, housing is crazy over-priced for what you get here. Something that should basically be a tear-down costs about $1 MILLION in certain areas. Then they want to renovate. 🙂 It doesn’t make sense and makes people stressed and unhappy. Don’t move here unless you have a really good reason (family) or a super-high salary. Public employees are moving out of the Bay Area in droves or they commute 1.5-2 hours per way to get to the “high” paying jobs. I know you are thinking LA, but I don’t suspect it’s that different.
2) We own a duplex. It makes sense financially in high cost of living areas. We paid a lot, but find that the amazing tenant next door covers a lot since rents are high here. It’s a win-win for everyone – we get help with our mortgage/taxes and the tenant gets a high-quality home with a “property manager” who is always on call and fixes things right away. It works for us, but may not be for everyone. One other thing about a duplex in California. Traditionally, they are built in areas of a neighborhood that are “less desirable” Meaning, you could be next to a shopping center, parking lot, the back of a school. “Less desirable” is relative – we are near a school and shopping center, but I LOVE that because I can walk to both with my kids. Again, this isn’t for everyone who may want something more traditionally suburban. Also, if you move to California, we generally have excellent public schools. Try to find a duplex in a city/neighborhood that has top-rated public schools. You send your kids for free and make money from your home. If you decide to stay in NYC, save towards buying a brownstone – you live on two floors and rent the basement apartment. We have friends who do this in Brooklyn and it has really worked for them.
3) Again, keep schooling in mind when in NYC (or anywhere for that matter since you now have a kid(s)). Some places with affordable homes to purchase have terrible schools (we used to live in NYC). So while you may be saving in terms of home, you make lose out in terms of quality schools or having to pay for private education.
Good luck and it sounds like you are on your way!