Is It Really Cheaper to Live in a Low Cost of Living Area?
In small-town America, life may be cheaper, but it’s not easier. The bills don’t shrink with your paycheck.
People move from places like New York or California to small towns in the Midwest, expecting to live easier on less. But the math isn’t always simple.
You will spend less on housing, but you’ll probably earn less, too. And many costs don’t drop at all. I live in central Illinois, where I’m about to make my final mortgage payment. But even here, we still feel squeezed. The truth is, low cost of living doesn’t always mean low stress.
HCOL areas have more job opportunities. It’s easier to get ahead when you’re constantly surrounded by people who already have. You’re almost certain to earn more money if you live in a big city.
But a lot of people living in those areas with far higher incomes than mine still struggle to make rent and know they’ll probably never be able to buy a house.
Meanwhile, in LCOL areas like mine, we can own, but we still can’t breathe.
Low wages, no cushion
It costs a lot less to live in places like central Illinois, but you will probably earn much less money. And while a lot of things are cheaper, certain things cost about the same wherever you go.
If you’re ordering online, they don’t offer you a discount because you earn less — or because your rent is killing you.
Paying off your mortgage
I have one payment left, but my budget won’t really change. Some costs are the same everywhere, and even in a cheap housing market, the rest of life doesn’t stay cheap.
Half of my house payment is property taxes and insurance, which I’ll have to pay directly now. Only $550 per month was actual house payment. Rising utility and food costs ate up that margin before we even got it.
I’m actually making less than I used to make, because a big chunk of my freelance income recently disappeared (thanks, AI!), Medium has stopped paying writers well and Substack is a big old question mark lately.
Yet some people have all the same issues but still have to pay roughly our entire monthly income on rent. So that’s the advantage of living in a LCOL area.
Some costs are equal
Unless you live in a city big enough to provide good public transportation, purchasing a vehicle is about the same cost for everyone. If you could get a significantly better deal on a car by driving a few hours, everyone would do it.
When you need to make a household repair, the kitchen faucet or whatever costs about the same everywhere, especially if you purchase it online. Nails cost about the same.
Whether that purchase is going into a $750,000 house or a $100,000 house is irrelevant.
Rent vs. buy
People talk about real estate as an investment. That only works if your house appreciates. Mine didn’t.
Some people my age — I’m 59 — bought a house many years ago that has appreciated to the point that they could sell it today and make hundreds of thousands of dollars in profit.
That kind of appreciation just doesn’t happen here. My home is worth barely more than it was in 2008. The amount of money I’ve put into it greatly exceeds its appreciation.
If I were to sell the house in my low cost of living area and try to move to a HCOL area, the entire worth of my house would only amount to a down payment.
It works better in the other direction. If you own a house in California, you could sell it and purchase a very nice house in a LCOL area and still have enough left to finance a good portion of your retirement.
But when people airily insist you ought to use your money for investments, not for a house, I have to laugh.
Um, where are you going to live? Can you live in a stock portfolio?
In my LCOL area, I wouldn’t save a dime by renting instead of buying. It’s just as cheap to buy a house as to rent, and you have more control. And although you will be on the hook for every plumbing leak or dead appliance, the house payments do eventually end.
Even small splurges feel like luxuries
I try not to purchase anything but absolute necessities. But I bought five sets of blackout curtains for my bedroom recently because I am a terrible sleeper and nothing else has worked.
The longest were too long, the second-longest too short, and now I’ll be hand-sewing them for weeks. In an old house, nothing fits and nothing’s standard. And honestly, they might be helping my tired old dog sleep better than me.
For someone with a New York salary, those curtains would barely register. (They could afford custom-made curtains to fit their windows.) For me, they were a luxury. Each time I glance at a curtain, I think how expensive that darkness is.
Where you live isn’t always a financial decision
It tends to come down to questions like where you were able to find a job or where you happened to be born or where your partner is rooted.
Because I hate winter, I wanted to move to Florida. My then-husband tried to find a job there when we finished college, but fortunately he didn’t get that job. (The beaches and warmth would have been great but I’d have hated dealing with Florida’s politics!)
Here I am still in central Illinois. I will never stop feeling guilty that my second husband, who is Dutch, gave up affordable, high-quality healthcare, better food, a better work-life balance and a better social safety net and so much more just to marry me.
So is it better to live in a low cost of living area?
I wish I knew.
When I read about the great pay some people in HCOL areas have, I immediately wish I were in NYC. Then when I am reminded of their inescapable high costs of everything, I am grateful to live where I do.
I used to think a paid-off house meant freedom. But in a LCOL area with no margin and shrinking income, it doesn’t.
Maybe the real question isn’t where life is cheaper, but where it’s still possible.
Don’t miss my current special series, Poverty and Privilege, which comes out every Saturday:
Poverty and Privilege is the story of Richard, a man with generational wealth, and Lauren, a single mom struggling to keep her household afloat. The twist is they both have Ivy League educations but life has turned out very different for each of them. The story is true but names and certain identifying details have been changed.
Part 1, Unlikely Allies in an Unequal America
Part 2, The Country Club Lunch
Part 3, One Family’s Fall From the Middle Class
Part 4, Billable Hours Don’t Pause for Birth
Part 6, How Marriage and Divorce Shape Financial Futures
Part 7, Why the Rich Don’t (Usually) Get Divorced
Part 8, Privilege Starts in the Playroom
Part 9, Intelligence and Education Are Not Enough
Poverty and Privilege will take a hiatus while Richard and his wife vacation in Europe. It will be back on Aug. 16!
About Michelle Teheux
I’m a writer in central Illinois. If you like my work, subscribe to me here and on Medium. I also have a new Substack aimed at authors who want to self-publish books, called The Indie Author. My most recent book is Strapped: Fighting for the soul of the American working class. My most recent novel is The Trailer Park Rules. Tips gratefully accepted via Ko-fi.
All wealthy families are alike; each poor family is poor in its own way.
— Leo Tolstoy, if he had written about a trailer park
For residents of the Loire Mobile Home Park, surviving means understanding which rules to follow and which to break. Each has landed in the trailer park for wildly different reasons.
Jonesy is a failed journalist with one dream left. Angel is the kind of irresponsible single mother society just shakes its head about, and her daughter Maya is the kid everybody overlooks. Jimmy and Janiece Jackson wanted to be the first in their families to achieve the American dream, but all the positive attitude in the world can’t solve their predicament. Darren is a disabled man trying to enjoy his life despite a dark past. Kaitlin is a former stripper with a sugar daddy, while Shirley is an older lady who has come down in the world and lives in denial. Nancy runs the park like a tyrant but finds out when a larger corporation takes over that she’s not different from the residents.
When the new owners jack up the lot rent, the lives of everyone in the park shift dramatically and in some cases tragically.
Welcome to the Loire Mobile Home Park! Please observe all rules.
I have lived in metro CO my entire life, back when it was a “cow town.” With nothing much to do.
I moved to a rural area of MN thinking much like you , that the costs would be lower. Nothing could’ve been further from the truth. You’d think that services like lawn mowing would be lower - this was actually MORE expensive than the city. And with less help than I’d get from a neighbor as I’d had surgery that summer. The service providers are rare, most people do their own landscape lawn care. The ones in biz, charge a lot and they assume you’re wealthy , or you’d be mowing the lawn yourself.
Same with other areas like simple 20 move of some furniture pieces - had to have a 12 yr old and bro do the work, and then had people drive up from the cities (an hour a half drive). This was the most painful aspect as I’m single and I rely on hired help and neighbors. Cost a lotta money and hard to find.
Property taxes - don’t even get me started lolz. Property around a lake, you’re usually voting in another locale- so every time votes come up to stick it to part time dwellers, they’ll do it. I was not going to be a part time resident, but was still hit with heavy property taxes.
Have to drive FAR for everything - closest major shopping area 1 -1.5 hrs away. Time = money, driving = wear n tear on the car even if gas is cheap.
Eating out was not a deal, it was about the same is in city. No fast food - could be good(do t eat it) could be bad (good food more expensive)
Homes were older , like you say, and u less you can do home improvements on your own or hire someone , and hiring is difficult , and expensive. I thought it might be like renovating in the metro but waaaaaay more difficult.
I eventually ditched my idea of the idyllic rural retreat and returned to metro area due to cost and difficulty of living . I think if you have 2 incomes , are in a partnership or family, know how to do most/all your own work- you could handle it and it would be a reduction in costs.
I’d add that if you know to work on homes and reno- update them, you would have a steady income
And could probably use homes your updating to live in while working there. Just an idea- if you like to work , there’s plenty of it. Single or couple , partnership could do this and live on lakes, fish, hunt, hike etc. definitely opportunity for those so inclined .
It depends as much on how you live as where you live to some extent. What I see is that there isn't any place to run to when food prices and utility prices are so high. There's only so far people can be squeezed.