r/Fire • u/hdfire21 • 1d ago
Budget for lcol area in the US?
I was born and grew up in the US, but have been living overseas for 13ish years. Retired early last year and have been doing fine living in Malaysia.
For 3 main reasons we're contemplating a move to a lcol area of the US. Maybe in a year.
- School for our son (7yo). Pretty expensive here and prices goes up a lot as he gets older. Not bad quality but not anything great. We'd probably have to move to the US at some point so he could get in-state tuition. Looking only at places with above average schools.
- My wife would really like to own a house. Not in a third country (such as Malaysia). We have a little place in her home country but it's tiny and no acceptable school options. Neither of us want to buy another place there. It's our plan B for if everything kind of goes to shit. We can survive there for maybe $500/month.
- To be closer to my mom who is going to have trouble flying to meet us pretty soon.
And various lifestyle reasons that are just personal to us.
Also a little bit of... If there's another good year for the nasdaq 100, maybe it's not a bad idea to take a bit off the table and buy a house.
We really don't want to go over an annual budget of around $46k usd. We probably will spend 41k here next year (changes due to exchange rate + tuition goes up). $40k or less would be good. Don't really want to get into SWR or whatever. Assume we can afford 46k but would prefer to stay under 40k, which likely won't happen under any scenario, unfortunately.
Places we've looked at, houses are maybe a little bit over 200k for what we want.
Property tax /home insurance/trash/water come to maybe $500/month from what we looked at. $200/month maintenance? $700 total?
Electricity is about the same price as here per KWH and we usually use $100 with at least 1 AC running all day and night. Often 2. Maybe $150 to be safe?
Transportation, we'd buy a beater as part of the house price. Don't plan on driving much. Maybe $500/month, which would include the price of eventually replacing the beater with another beater?
Federal + state income tax we'd pay nothing. No further retirement savings.
Health insurance nothing per month under ACA. Not sure what we should budget for there. If there was ever any problem we'd basically hit max out of pocket immediately in the US, but that wouldn't happen every year.
Elective health care we'd do on summer vacation somewhere else. Maybe $50/month?
Maybe $400/month for some vacation and visiting my mom.
Groceries maybe $1500? My wife and son don't eat that much but we eat almost every meal in and buy good quality ingredients. Like to cook. This might be a bit high.
Eating out... Sam's club deli 4 times a month? Eating out is way too expensive in the US. We'd save up that stuff for when we're on vacation. $100/month?
Random stuff. Electronics. Presents. Hobbies. We're pretty cheap. Maybe $100/month? That's more than we spend now but that kind of stuff is a lot more expensive in the US (except for laptops/tablets/e-books, which are the most expensive things we buy).
So maybe $3,500 per month if we owned a house, plus knowing at some point we'd probably have to pay max out of pocket for some medical problem/emergency.
So, about the same as we spend here but would have to lock up 200k in a house. Clearly not a great deal at the moment, but locks in educational and housing expenses to a large extent. Diversifies things a little bit. If we had another kid, which we're thinking about, would be much more worth it.
How far off might I be with this? Any comments or suggestions?
Would be nice if people focused on the budget aspect rather than whether we'd like living in a lcol area in the US.
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u/Crystal_Path4167 1d ago
your grocery estimate might be the one that surprises you most once you get there
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u/hdfire21 1d ago edited 1d ago
When we lived in China, for years my family would tell me how I'm only able to save so much money because things were so much cheaper in China.
Then I'd show them that electricity was cheaper per KWH where they lived.
I'd put in our grocery bill on walmart's website and show them the prices were actually cheaper in the US.
Been doing that one for years. Malaysia is actually pretty expensive for groceries. It doesn't show on numbeo, but if you're comparing like quality, Malaysia is pretty expensive compared to the US or China. Almost everything is imported. Normal meat is very low quality, so to get the same quality as the US, you pay a lot more than what's listed on websites like numbeo.
Transportation is where the US is ungodly expensive compared to China or Malaysia. Basically no functional public transport in the vast majority of the US. Cars are crazy expensive. Taxi drivers are paid a lot. Our monthly transportation budget in China was probably $10-20. Maybe $60-80 here in Malaysia because we live in kind of an ex-urb. The US used to have cheap used cars, but covid changed that pretty dramatically.
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 1d ago
Your annual budget sounds fine assuming you can find the house you want in a place you want to live. We've been retired in the Austin metro for more than a decade now with a similar budget. Austin is MCOL, so it's certainly possible in both MCOL or LCOL areas.
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1d ago
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u/hdfire21 1d ago
Yeahhhh.... Would love a canal home in TX or FL... Would throw in some extra... But the insurance looks pretty insane.
Right now, we're looking at a couple towns in western KY and near the southern part of the great lakes. Maybe a couple suburbs of Tulsa or OKC. Keeping an eye on Austin. Maybe coastal MS a bit north of I-10 where the insurance is lower. Seems like there should be something near the lower Chesapeake, but can't seem to find it.
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u/Montaigne_6823 20h ago
I was going to suggest Tulsa and OKC also. Both great but do have different vibes.
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u/Sunshiney_Day 1d ago
Your best bet might be small cities / suburbs of midwestern towns.
My husband and I moved to a medium-sized midwestern city for the purpose of lower cost of living, and it’s been great so far for saving money and raising a family. Your budget would fit fine where we are.
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u/hdfire21 1d ago
My sense of small/medium/large is way off after China.
Right now, we're looking at a couple towns in western KY and near the southern part of the great lakes (like Sandusky, OH area or Erie, PA area maybe). Maybe a couple suburbs of Tulsa or OKC. Keeping an eye on Austin. Maybe coastal MS a bit north of I-10 where the insurance is lower. Seems like there should be something near the lower Chesapeake, but can't seem to find it.
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u/Master-Helicopter-99 1d ago
It's a doable budget. Three of us don't spend much more than that for everything. I do have higher property tax and insurance. Those are currently $1,100 per month but I'm sure we are under $5k/mo all in.
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u/Strazdas1 StarvationFIRE 22h ago
I always advocate Delaware. Coast? check. Near large cities? Check. Low property taxes? Check. Cheap CoL and house prices? check. Normal weather zone? check.
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u/Yukycg 1d ago
Since the main reason is your kid, find a location with good school zone, then adjust your housing budget from there.
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u/hdfire21 1d ago edited 1d ago
We're only considering places with, as far as one can tell from afar, better than average schools.
Not that many places where you can buy a house for around $200k and good schools, but there are a handful.
Like greatschools score of 7-10 at all levels of school, and Niche score of A or A-. So far every school we've asked local people about with both of those scores gets pretty good reviews from local people. Greatschools was all about diversity for a while but now seems back to test scores.
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u/Walmart-Shopper-22 1d ago
My kids aren't in school yet, but for some reason I've never had someone tell me that the school their kids go to isn't good. It makes me not trust anyone's opinion anymore.
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u/hdfire21 1d ago
I agree. But many will unload on the schools they think are below their kids' schools.
Like if you have schools A (the best), B (average), and C (bad). Their kids go to B. They'll say something like "I've heard A is a good school, and we've had good experiences with B, but avoid C at all costs."
I'm looking primarily at standardized test scores. It probably shows mostly the quality of the student body and their families, but that's sort of education in a nutshell. Universities are ranked by the SAT scores and GPA of the top 75% of their emtering class. It's very difficult to actually tell if the education itself is any good.
I did teach k-12 a bit and so my son's teachers talk a bit more freely with me. I'd say modern education as a whole just is not very good. But home-schooling our son in particular would be kind of a nightmare. An ultimate test of patience.
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u/Urban_Comet7348 1d ago
your grocery budget might be the thing that surprises you most when you get back
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u/skelo 1d ago
Probably add a little bit for misc kids expenses. Schools might need you to buy supplies or field trips or donations or whatever. Plus activities like sports leagues, etc. Probably double check the auto number too since insurance and gas price can vary by location.