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It’s been over four years since I moved to a cheaper area to become debt-free as a single mom of two on a moderate income — and the impact it has had on my finances has been life-changing.
I moved to my current city because the lower cost of living was enticing. I pay $700 in rent, and as a result, I’ve been able to clear out all of my debt, build five figures in savings, and invest for both me and my children’s futures.
The strategy of moving from one place to another for a cheaper cost of living is called “geo arbitrage.” It helps people save money and find financial independence sooner. You don’t have to move permanently. Even a short move for a few years can have a massive impact on your financial life — if you budget accordingly.
This move has required sacrifices though, like giving up square footage and settling for low light due to few windows in my apartment. I’ve also given up nearby access to restaurants and activities, which were what I loved most when I lived in the downtown Little Rock area. Above all, I’ve been intentional about creating a safe environment for my family.
All in all, it’s been worth it for my kids and me. Here’s why I did it, and how you can do the same.
How Geo-Arbitrage Worked for Me
I started my debt-free journey in September 2016, when I was making roughly $32,000 per year. I knew I could leverage my income more if I lowered my housing costs. Newly free of childcare costs, I moved to an apartment $20 cheaper than my previous one, but soon found out I was pregnant again.
With childcare back in the budget, I calculated how much I would need to keep my debt payments the same. I made the decision to move to an even cheaper apartment once my lease was up. Rent was $125 less and came with free water, saving me another $55.
I needed $200 a month to keep chipping away at my debts, and this move was saving me $180, so I knew I only needed a minimum of $20 from side hustles to keep making progress. Using my writing degree, I started freelance writing for individuals and companies during nights and weekends, making up to $400 per month.
Then, in 2019 I launched Money Boss Mama …….
Source: https://time.com/nextadvisor/in-the-news/geoarbitrage-pros-cons/
