How to be Frugal in a High Cost of Living Area?

Mr. Money Mustache is one of the modern day gurus of financial independence and early retirement, and he is pretty darn cool. I have been enjoying his blog (plus others like Camp F.I.R.E. Finance, Get Rich Slowly, etc.) and stories for more than 6 years. His story is so inspiring as a guy with a family that retired in his 30’s from “regular” work. His method is basically extreme frugality and what he calls “badassity” and “stashing cash” in a “mustachian” way. Many of these early retirees still work in a way because they run their blogs and brands which inspire many people. And it’s actually a ton of work to run a successful blog. Lots of work, but your the boss!

What I personally grapple with is how to be more “Mustachian” in high cost of living Southern California? Any others out there managing this reality?

In MMM’s home town in Colorado, the average home price is $366,000. Where I live in Southern California the average price in an area with good public schools is about $650,000! Ouch! I’m at a major disadvantage. And the price is just the beginning. Remember this adds to the taxes, cost of repairs, closing costs, and interest paid on the mortgage. It’s a major hurdle to stashing more cash! I have managed to build investments up over the last 15 years following the “mustachian” and “Get Rich Slowly” ways and my own. But without the housing thing under control, what does one do? Here are a few options I have thought about: 1. Move. Easier said than done when you love where you live besides the cost. Also, I enjoy my job, friends, family and everyone is well rooted. But, always an option. At the end of the day this is kind of in the “probably won’t happen” column. 2. Sell investments to pay down the mortgage. Is this a good idea or not? On one hand the housing costs could be significantly reduced. On the other, I would be missing out on dividends and compounding big time. I’m torn! 3. Continue to practice frugality. My strategy up to now has been to be as frugal possible in other areas of life in order to afford the mortgage and continue to invest. This has required some serious effort. Used furniture and clothes. Thrift store shopping. Low cost meals and extreme leftovers. Owning a used older Honda, the one I bought by going bald: 4. Make the house as affordable as possible. Some things that have helped is low interest rates, a good size down payment, low water landscaping, reduced energy use when possible, doing some repairs myself. See Xeriscaping for ideas on low water landscaping: I guess this post is more of a question to you than about all the answers. Does anyone have some strategies they have used to reduce housing costs in an extremely high cost of living region? I would love to hear from you. At this point I am toggling somewhere between options 3 & 4. Let’s face it, moving your family is hard and scary. We all most likely have to make the best of where we are at the moment, especially if you enjoy where you live and have friends and family close by.  

2 thoughts on “How to be Frugal in a High Cost of Living Area?

  1. I also live in Southern California and face this problem every day. We do #3/4 and think about #1. But moving gets less likely as we become more rooted to the place. We even got pretty lucky with our home purchase and aren’t that susceptible to peer pressure and it’s still hard. I’m thinking we have just have to earn more or hack our housing by building an accessory dwelling unit.

    1. Great idea about the accessory dwelling. I have heard the rules for that have become easier to support permitting and construction. I love the beauty of So Cal and the economy is strong, hard to leave. Thank you for your comment! Greg

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