Can I afford to move?

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anonturtle
Posts: 1
Joined: Sat May 28, 2022 10:08 pm

Can I afford to move?

Post by anonturtle »

Hi,

I'm a 25 year old looking for advice both on my investments and some advice about moving to another VHCOL area. I moved back home for about 2 years to finish graduate school and currently still live at home in a VHCOL area. I got a job around 7 months ago working remotely, and I'm looking to move to another VHCOL area closer to the office in case I need to go into work.

Investments:

Brokerage account:
- 132k, 90% VTSAX, 10% stocks

Roth:
- 42k vtsax, maxing fully each year

401k: (diversified in total market and international)
- 15k (Traditional)
- 5k (After-Tax) (plan to roll over into roth)

Ibonds:
- 28k

ESPP:
- 5k

Cash (emergency/buffer):
- 14k

My monthly take home after 15% ESPP deduction and 401k max is 3400, which I'm currently saving most of as I'm living at home.

My questions are as follows:
1) Are there any improvements in diversification I should make to my investments?
2) The VHCOL location I'm looking at is around 2200 in rent, with an additional expected 1k a month in expenses, meaning I won't be able to save any additional money. Can I afford this, and will the benefit of being in a new area and networking with new people and making new friendships outweigh the monetary price?
3) How do you get out of the mindset that you're not saving enough? I consistently get anxious that I am not saving enough, especially looking at the housing affordability in the locations I would want to live in.

Thanks in advance for the responses.
trek83
Posts: 42
Joined: Mon Dec 28, 2020 2:51 pm
Location: Midwest

Re: Can I afford to move?

Post by trek83 »

Congratulations on your savings & investment dollars at the age of 25 - $241 K if I added correctly.

Investments - Look great to me. Long term allocations to equities at your age is appropriate in my opinion.
I would have 6 months of living expenses in cash = $20,000

VHCOL rental of $2000 + another $1000 in expenses obviously will not work on your take home pay of $3400

Sharing apartment rental expenses with roommate(s) would be the first , easy way to make it more affordable.
Otherwise , living in a lower cost area may be your only choice , if that is even possible.

Buying a house ? Depends on pricing, but sounds like it will be out of reach for at least 3-5 years in your VHCOL area. Save like crazy until that time - which will make your upcoming move situation a very important decision for low cost living.
invest4
Posts: 1905
Joined: Wed Apr 24, 2019 2:19 am

Re: Can I afford to move?

Post by invest4 »

anonturtle wrote: Tue Aug 09, 2022 8:04 pm I got a job around 7 months ago working remotely, and I'm looking to move to another VHCOL area closer to the office in case I need to go into work.
Can you elaborate on the need to move at all? Is your employer requesting this or you think its a good idea? Assuming you are otherwise fine with your current living situation, I believe your best move is to stay where you are at a bit longer and continue to save and focus on career.
muffins14
Posts: 5529
Joined: Wed Oct 26, 2016 4:14 am
Location: New York

Re: Can I afford to move?

Post by muffins14 »

Living at home has different social outcomes compared to living in the city as a single 25 year old.

You’re saving a lot, which is great, but either taking your $3400 and moving in with roommates or buying less into your ESPP may be a good idea if you want to use some of your 20s to explore and make new friends etc

Most 25 year olds are not maxing their 401k and ESPP. It’s OK to not do so right now if you expect your salary to climb through age 40 for example. You can max it out in a year or two but have also moved into the new location, made friends, and become independent. You’re only young once, so I’d try it out. If you hate it, you can move back home and continue saving more.


For your investments, I’d own more international and not worry about the ESPP until I was happy with my living situation.
Crom laughs at your Four Winds
Jags4186
Posts: 8198
Joined: Wed Jun 18, 2014 7:12 pm

Re: Can I afford to move?

Post by Jags4186 »

If your expenses are $3200 with rent, and you have $3400 income, you can afford to move out. You’re still saving $20,500 into a 401k and whatever an additional 15% into an ESPP so it’s not like you’re not saving. Now, whether or not your new life can expand into that $200 excess is another thing. Consider dropping the ESPP, or at least look at spending some of it after you purchase at a discount and hopefully immediately sell.

I’ve never lived alone. I moved into an apartment with my best friend from high school after college and we lived together for 6 years, then I moved into an apartment with my girlfriend, now wife. If you have a friend you could move in with, I would look into that. It’s a ton of fun. If you’re moving in with a stranger, do your best to find someone with similar prospects as your own.

I highly recommend moving out of your parents house and going off on your own.
tashnewbie
Posts: 4284
Joined: Thu Apr 23, 2020 12:44 pm

Re: Can I afford to move?

Post by tashnewbie »

My first thought: is your employer requiring you to come into the office? If your job is 100% remote, you don't have to move to be closer to the job, unless and until your employer requires some time in the office. Maybe you want to maintain current status quo at least through the end of the year to allow you to accumulate a bigger cash buffer for emergency purposes and expenses when you do move?

I agree with others that it is better from a social and personal development perspective not to live with your parents indefinitely, though. That doesn't mean you have to move to the city where your job is located. If you want to move to that city, I think others have provided good advice about things you can explore to reduce costs.

I think you're doing a tremendous job of saving at your age. You're ahead of probably 99% of your peers. Good luck!
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