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Move short term HCOL –> LCOL for student debt?

Home Personal Finance and Budgeting Move short term HCOL –> LCOL for student debt?

  • Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    Actual tax rates for property ends up more than 2%, sometimes 3% in texas. I paid as much for a low 100k house in tx as I did a 400k house in ca.

    #234352 Reply
    Liked by Tim, ZZZ
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 324
    Joined: 06/10/2019

    I see your dilemma. I grew up in NYC, but didn’t really move to LCOL central FL until a lot of the extended family moved here. I was also just in CA for two weeks. I think my income, good as it may be, would only go a third of the way there especially given housing prices and state income tax, that annoying additional 4% sales tax they tack on, etc.

    It’s a very personally decision to decide to move and if so, where to. Others correctly pointed out tax implications, especially in the first year. I’ve not been to Austin, most say it’s more MCOL. You can go online and look up things like average home prices per sq ft, average annual household incomes in a given zip geography, etc. You need to compare. Our average home is about $100/sq ft in our area. That’s quite low relatively speaking.

    It doesn’t feel correct to make a short term move away from the family just for some tax savings, especially since it doesn’t look like Austin is really LCOL.

    I’ve lived in liberal NY, to conservative Central Florida, although most of Florida is closer to 50/50 with a slight conservative lean. Not sure you should let your political views adversely affect your finances. That transition never bothered me.

    Maybe you can find something more suburban (100K residents) although that may not be for everyone. We’re about 45-60 minutes from two major cities, attractions and the beaches. Who knows, maybe you can start a trend migration with the family like the pioneers in our family did. I have about 80 extended family members within a 50 mile radius here!

    Times sure have changed. I graduated med school with a miniscule fraction of your educational debt and paid it of in my residency years. You seem to be fine paying it down even if you decide to stay put.

    #234358 Reply
    xraygoggles xraygoggles 
    Participant
    Status: Physician
    Posts: 93
    Joined: 10/26/2018

    Not sure how this post got resurrected, but I nixed that plan after a few weeks of deliberation. I’m staying in SoCal for the forseeable future.

    My income has skyrocketed over the past year (no joke, my take-home net pay has increased 40% as a 2nd year attending), due to a combination of heavily incentivized wRVU bonus pay and working a few extra shifts on every off week. I have much more discretionary income this year than I did last year.

    The problem I now have (which I imagine most of the new docs on here have) is how to properly allocate between debt paydown/investing/savings etc.

    “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

    #234359 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    Not sure how this post got resurrected, but I nixed that plan after a few weeks of deliberation. I’m staying in SoCal for the forseeable future.

    My income has skyrocketed over the past year (no joke, my take-home net pay has increased 40% as a 2nd year attending), due to a combination of heavily incentivized wRVU bonus pay and working a few extra shifts on every off week. I have much more discretionary income this year than I did last year.

    The problem I now have (which I imagine most of the new docs on here have) is how to properly allocate between debt paydown/investing/savings etc.

    Click to expand…

    This is not a problem my friend.

    #234420 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3032
    Joined: 09/18/2018

    @zaphod,
    You are so right. 2.3% . Zero income taxes.
    Of that, 58% is school district taxes. If I was concerned about that, I would move to a lesser funded district.

    Sales tax, income tax, and property taxes add up. I think I’m gonna cut it in half downsizing. Property taxes are real expenses, just not as steep as income taxes. Taxes are gonna happen, some states have more and some less. CA has more. When I see income tax 10%+ and sales tax 6%, 1% property tax doesn’t make it even.

    I pulled out my property tax protest letter I received last week. Ten frigging taxing entities wanna get paid! Geez.
    Life goes on regardless. The original was pulled from the internet.

    #234483 Reply

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