not interested

Increase My Lifestyle 100 Percent? – Not Interested

We sometimes face decisions that, seen only in financial terms, would have such a huge positive impact on our financial wellbeing they would seem to be no-brainer solutions. Yet we often do not choose those solutions because they have so much emotional charge. An example of such a choice is relocating. Sometimes a move could resolve a great many financial stressors, but it’s typically a solution that is blown off almost without even exploring it.

Suppose that you and a friend have similar jobs in the same career field. One of you lives in Rapid City, South Dakota, and the other is in San Diego, California. Which of you is likely to be better off financially? Two assumptions probably shape your answer to that question: that the cost of living is higher in San Diego than in Rapid City, and that the employee in San Diego receives a higher salary than the one in Rapid City.

The first assumption is likely true. The second is likely false. My firm competes on a national stage to hire financial planners, and I have learned that planners are paid at similar levels across the country. Someone in San Diego and someone in Rapid City would have comparable salaries, even though the cost of living is higher in California. This means the person in Rapid City would enjoy a higher standard of living.

To put it another way, a salary of around $70,000 in San Diego would provide a comparable standard of living as a salary of around $45,000 in Rapid City. In a field like financial planning where salaries are similar in both areas, moving from San Diego to Rapid City could greatly increase someone’s lifestyle. (Especially when you take into account that California has a state income tax and South Dakota does not.) If you want to explore this further, there is a cost of living calculator at Forbes which will allow you to compare living costs in cities all over the country.

Seen only from a financial perspective, if a firm like mine in Rapid City offers a position to a planner living in San Diego, the choice to relocate would seem obvious. Yet KFG is not staffed by professionals who have moved here from areas with a higher cost of living. This is far from being a simple emotional decision.

There are many reasons why a person would make a conscious decision to live in a certain place even if it means a lesser lifestyle. They see value in factors other than the money—factors that may have a huge emotional charge. Those might include one’s perceptions of wider employment opportunities, more entertainment options, more diverse or specialized communities, and climate. I have discovered, for example, that many people will choose bumper-to-bumper traffic and higher living costs over shoveling snow. And, of course, being close to family can be hugely important.

If you are facing a decision of this type, whether relocating, changing careers, or something else that would seem to be an obvious choice given its financial benefits, I encourage you not to say yes or no without digging deeper. Spend some time exploring the emotional side of all the things involved. What might be your money scripts affecting the choice? What are your fears? What are your hopes?

Consider the emotional anchors that could hold you in a position of continuing to struggle financially. Give yourself a real opportunity to listen carefully to the parts of you that resist the idea of change and those that want change. This process makes it more likely that your decision, whatever it may be, will ultimately lead to greater satisfaction and wellbeing.

Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.

Sign up for our weekly blog for more useful information.

Scroll to Top