Young parents, considering moving to city

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kotrfa
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Young parents, considering moving to city

Post by kotrfa » Thu Nov 07, 2019 3:22 pm

Hi,

we are young parents (<30) with a single kid (3 yo) living in Europe. We have been living in a small village since we ended our universities, as the village is our hometown and we have both families here (so grandparents could look after the little one). We have been living very cheap here, paying rent just about ~20% of the average salary in our state (AS). The total income is about 3-4 times of AS and most of our savings actually went to savings and investments, being able to put 10*AS into bonds and 20*AS in stocks (being about 12%+ now). We currently have about ~100k USD in savings in total (equivalent to 80*AS), so even if [things take a bad turn], we are pretty much fine for a few years. Our families are mid-class and could always help us financially and it's still a place to live if we really needed to (it's about <1.5h from the city).

Unfortunately, being in the small village hits its limits now. We want good kindergarten for the little one (bilingual, we see it as an investment) and all of our friends and social stuff (which are making us grow) are in the city nearby, nothing we could do here. But moving to the city will mean paying a quite high rent (equivalent to single AS) and the kindergarten is something like one more ~AS as well. Therefore we would basically stop saving anything as our expenses for food and social stuff will be another ~AS for a year. That is our current plan - we want to give it a shot for a year to see how it works for us. There are some weak advantages such as a potential for higher income, given that it's better in the city, but I don't think it would be that much (maybe 1-2 more AS).

I am curious what bogleheads think here. We are torn between living while we are young and can invest in early education (such as that the little one would learn English when it's the easiest) versus saving as much an early as possible.

Thanks for ideas. Feel free to ask clarifying questions, I tried to use an average salary to make it a little bit more comparable.

[Edit by moderator oldcomputerguy]

3504PIR
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Re: Young parents, considering moving to city

Post by 3504PIR » Thu Nov 07, 2019 4:16 pm

Hello, I assume AS is referring to Austrian currency?

Assuming that, this seems to be a basic math problem along with how you would qualify your quality of life in both places. I would recommend looking at it from those two aspects. Can one or both of you take a train to work in the city for a while as you continue to decide if this is financially a good choice?

On the surface, it seems like you’re current situation will give you more options for the future with your savings rate in your village not to mention your families being there to support you and your child. I would only move if I knew my long term goals would be similar. Good luck!

wilked
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Re: Young parents, considering moving to city

Post by wilked » Thu Nov 07, 2019 4:17 pm

What does AS mean?

wilked
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Re: Young parents, considering moving to city

Post by wilked » Thu Nov 07, 2019 4:18 pm

What will it cost in absolute money to move to the city?

rjbraun
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Re: Young parents, considering moving to city

Post by rjbraun » Thu Nov 07, 2019 4:27 pm

3504PIR wrote:
Thu Nov 07, 2019 4:16 pm
Hello, I assume AS is referring to Austrian currency?
I think "AS" may refer to "the average salary in our state". The euro is now the official currency for Austria.
kotrfa wrote:
Thu Nov 07, 2019 3:22 pm
<snip>
We have been living very cheap here, paying rent just about ~20% of the average salary in our state (AS).
<snip>

ohai
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Re: Young parents, considering moving to city

Post by ohai » Thu Nov 07, 2019 4:46 pm

Seems like this depends on the city... if you are moving to NY City for family life, for instance, I'd say you're crazy. All other cities are probably on some scale of cost/lifestyle.

3504PIR
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Re: Young parents, considering moving to city

Post by 3504PIR » Fri Nov 08, 2019 12:48 am

rjbraun wrote:
Thu Nov 07, 2019 4:27 pm
3504PIR wrote:
Thu Nov 07, 2019 4:16 pm
Hello, I assume AS is referring to Austrian currency?
I think "AS" may refer to "the average salary in our state". The euro is now the official currency for Austria.
kotrfa wrote:
Thu Nov 07, 2019 3:22 pm
<snip>
We have been living very cheap here, paying rent just about ~20% of the average salary in our state (AS).
<snip>
Good catch, thanks!

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LadyGeek
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Re: Young parents, considering moving to city

Post by LadyGeek » Fri Nov 08, 2019 9:47 am

This thread is now in the Personal Consumer Issues forum (where to live).

For those questioning the acronym "AS", it's Average Salary.
kotrfa wrote:
Thu Nov 07, 2019 3:22 pm
paying rent just about ~20% of the average salary in our state (AS).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

wilked
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Re: Young parents, considering moving to city

Post by wilked » Fri Nov 08, 2019 10:12 am

LadyGeek wrote:
Fri Nov 08, 2019 9:47 am
This thread is now in the Personal Consumer Issues forum (where to live).

For those questioning the acronym "AS", it's Average Salary.
kotrfa wrote:
Thu Nov 07, 2019 3:22 pm
paying rent just about ~20% of the average salary in our state (AS).
So this sentence from OP
“ We currently have about ~100k USD in savings in total (equivalent to 80*AS)”

So average salary is $1,250 USD / year?

sjt
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Re: Young parents, considering moving to city

Post by sjt » Fri Nov 08, 2019 10:25 am

wilked wrote:
Fri Nov 08, 2019 10:12 am
LadyGeek wrote:
Fri Nov 08, 2019 9:47 am
This thread is now in the Personal Consumer Issues forum (where to live).

For those questioning the acronym "AS", it's Average Salary.
kotrfa wrote:
Thu Nov 07, 2019 3:22 pm
paying rent just about ~20% of the average salary in our state (AS).
So this sentence from OP
“ We currently have about ~100k USD in savings in total (equivalent to 80*AS)”

So average salary is $1,250 USD / year?
I read it as 100k USD saved which is 80% of the average annual salary in the state. Which puts the Average Salary at about $125k (not sure if that's for a couple but I assume yes). Would be much easier if OP used actual currency and not Average Salary and percentages of such.
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

Topic Author
kotrfa
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Re: Young parents, considering moving to city

Post by kotrfa » Fri Nov 08, 2019 10:56 am

Hi. Thanks for moderation and sorry for the confusion. Yes, AS states for Average Salary per month (didn't realize that in US, an average salary is usually per year). I am happy to use absolute numbers but from my past experience, this forum is quite US-centric and I have had some issues when using absolute numbers.

An average salary in our country is roughly €1100 (~$1200) per month if that changes anything.

(unfortunately, I can't edit the original post anymore as it has been moved by mods)


> Seems like this depends on the city... if you are moving to NY City for family life, for instance, I'd say you're crazy. All other cities are probably on some scale of cost/lifestyle.

It's a mid-sized city with a lot of opportunities for young people (as a matter of fact, many of them are moving there as well).

wilked
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Re: Young parents, considering moving to city

Post by wilked » Fri Nov 08, 2019 1:46 pm

OK, think I cracked the code:

In USD

-Married couple, ~27 years old, 1 child (3 yrs old)
-Combined Income: $50K
-Current Rent: $240/month
-$100K in the bank
-Potential rent in the city: $1200/month
-Current expenses: $1200 / month
-Potential salary increase in the city: ~$15K

If they move to the city savings would dwindle to a small number

Is the city life worth the expected increase in costs?

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