8 Cheap Places You'd Want to Live (And How to Find More)

One of the money saving tips I'm recommended several times (and people seem to hate, BTW) is that if you're having a hard time making ends meet where you live, why not consider moving? It's an economic fact that a move from New York City, San Francisco, Boston and the like to, say, Indianapolis, can make a positive impact on your budget and net worth -- even if you have to take a pay cut when you move there. It's just that much cheaper to live in some places than others. Yes, larger cites offer more options, but do you really need to fork over all that money just so you can go see Pirates of the Caribbean at 3 am if you want to?

Here's a piece from MSN that suggests 8 cheap places you'd want to live. They suggest you look for a strong economy, a college and low crime in addition to a place being affordable. In addition, they added in an "X" factor:

But we were looking for something else -- that spark, that liveliness, that extra something that makes a city, however big or small, an interesting place to be. Because let's face it, there's still plenty of cheap real estate out there; the problem is that it's in places few people would want to live.

Using this criterion, here's what they recommend:

• Asheville, North Carolina: Cost-of-living index 90.7 (read: "9.3% cheaper than the average U.S. city")
• Austin, Texas: Cost-of-living index 90.6
• Boise, Idaho: Cost-of-living index 91.2
• Fayetteville, Arkansas: Cost-of-living index 88.2
• Minneapolis, Minnesota: Cost-of-living index 124.5 (24.5% more expensive than the average U.S. city)
• Nashua, New Hampshire: Cost-of-living index 117.7
• Olympia, Washington: Cost-of-living index 107.8
• Prescott, Arizona: Cost-of-living index 115.0

I know that some of these (the ones with cost-of-living indices over 100) are more expensive than the average U.S. city, but they're still way cheaper than some of the larger, expensive U.S. cities and thus represent a great savings.

For fun, I went to Sperling's Best Places and compared the cost-of-living indices for major U.S. cities to that of Minneapolis, Minnesota (the most expensive city above). Minneapolis's cost-of-living index looks like a major bargain compared to those of these cities:

• New York, NY: 172.3 (in other words, for you could earn $125k in Minneapolis and be as "wealthy" as someone earning $172k in NYC. Just think what you'd save if you moved to Austin!)
• San Francisco, CA: 207.7
• San Diego, CA: 157.3
• Boston, MA: 145.1
• Washington, D.C: 137.4

FYI, the most expensive cities in the U.S. are:

• Manhattan
• San Francisco
• Los Angeles
• San Jose
• Washington, D.C.

Ok, the data from one site to another is a bit off, but there are regulars at the top of any "most expensive city" list.

So let's say you like the idea of moving to a cheaper location, but don't like any of the suggestions above. What do you do? You simply follow MSN's suggestions for locating your own great place on the cheap. here's what they suggest:

• Look for a healthy economy.
• Try to avoid a place in the middle of a huge boom.
• Look for places on the outer fringes of metro areas.
• Seek out that college presence.
• Do some basic research.
• Get the local newspaper.
• Visit.

So if you're in the mood to save anywhere from 10% to 50% of your salary, you may want to consider this simple tip: move. Even if you want to stay in an expensive area, there are affordable, nearby alternatives (see the chart at the bottom of the page on this link).

Comments

[Dus10]

It was nice to see that Indianapolis, IN has a cost-of-living index of 82.8%. Housing is the largest driver of this index, being at 59.8%. I can say, compared to the prices I see elsewhere, the housing market prices in Indianapolis has always seemed excellent.

[Rhea]

The eight great places to live sound pretty cool, but I know that my friends and I would have to leave a certain 'comfort zone'. For example, my Jewish friends could never imagine themselves in Fayetteville. But change is change, right?

[Laura]

Chicago is a great place to live because it has many of the features of new york city with a MUCH lower cost of living. I'm paying the same for my 2-bedroom apartment here as my friends in austin are for a very comparable place.

[Foobarista]

We sometimes toy with the thought of moving out of Silicon Valley, but our criteria are hard to meet:

1. It must have a large Chinese community. DW is Chinese and likes to have a selection of Chinese markets to buy groceries and such.

2. Good weather. Anything beyond a small amount of snow is not allowed, nor is humidity. We native Californians get spoiled by such things.

3. Lots of nearby hiking and outdoor nature adventuring, available year-round.

4. I need to be able to find a job in my rather esoteric field. Taking a massive pay hit while changing careers would ruin the whole point of moving...

So, even though we toy with the thought of moving, very few places make it past the above "filters".

Given that many of us in expensive areas are in similar situations, an interesting article would be "how to do well and save money without leaving The Big City"...

In our case, it would include:

1. Low-ball your car expenses. Just because everyone else drives a BMer or Lexus doesn't mean you have to.

2. Enjoy what you're paying for - day hiking, the beach, and weekend backpacking trips to Yosemite and Lake Tahoe are cheap and fun. Use them.

3. (Not for us, as we bought years ago, but decent advice for young people) Here, rents are much lower proportionately than purchasing. A 2 bedroom apartment in our city would rent for about $1000, while a similarly sized condo would cost $400K or more. A house could be rented for $2K/month, while it would cost $700K or more. Renting is probably a better option than buying at this point...

4. Other LBYM advice works just as well across the street from Google HQ as it does in Cheapville, ND: don't have silly debt, avoid Starbucks, monitor and prune ongoing expenses - however small - and you'll do well.

[Pete]

Here's another vote for Minneapolis. We live in the Minneapolis area and it is a great place to live. We actually moved to one of the outer ring suburbs here and commute into the city for work -and it is a great deal. In one of the suburbs we got a 4 bedroom 4 bath house for probably 100 grand less than we could have in the city. Plus we're close enough to Minneapolis that we can drive there within 25 minutes or so.