I wrote about how I finally started turbo-charging my school loan repayment in 2014, after 4 years of making no progress. As I had mentioned, this happened after taking a real and very necessary look at how I managed my money and spending, driven by a finance deep-dive with my now husband. A series of events enabled me to finally make headway, and that included one of the biggest changes in our lives.
At the end of September 2014, literally weeks after we got married, I moved from my hometown of Brooklyn, New York to Houston, Texas.
The move was the culmination of nearly a year’s worth of job-hunting, in which I made the jump from an internal business management role at the bank to a client-facing corporate banking role. In doing so, I took a demotion in terms of title and salary, but I knew it was only going to be a very temporary monetary setback. The trajectory of my new career path was steep and I would be getting regular salary increases annually and would benefit from significantly larger bonuses. It was the nature of the work. I went from a steady 9-6 job to one that was highly unpredictable and deal-driven environment that would demand 55-60 hour work weeks. But the workaholic in me relished this type of environment. And within a few short months, my total compensation (salary + bonus) exceeded that of my previous role.
Along with the salary boon, I was living in a state that had no state income taxes. It was not something I fully appreciated until I moved – by eliminating NYC taxes and state taxes, I calculated that I effectively saw an 11% increase in my take-home pay. My expenses in Houston were also substantially lower. I had some initial upfront expenses, including purchasing a used car and putting a down-payment on a 1-bedroom apartment, but generally speaking, everything was just cheaper, from buying groceries to dining out and entertainment. I honestly could have paid less than for my apartment, but I found the $1,390 a month rent to be reasonable given it was in a luxury mid-rise building located in the Museum District, only 15 minutes away from the office, and included access to pools, gyms, and shared grilling and common areas, all of which I used frequently.
And given the move to Houston, I had to do something about my little studio apartment in Brooklyn. Coops are restrictive in terms of subletting, so as to eliminate investors from buying and renting out their apartments and devaluing the overall property. My apartment complex’s sublet policy allowed me to rent out my apartment only if it had served as my primary residence for the last 3 years. I could then rent out my apartment for 4 years, whereupon it would have to be my primary residence again for another 3 years before I could re-sublet. That limitation wasn’t a big issue for me, though, as I had just made the 3-year cutoff point and could at least sublet the apartment for the time being.
I enlisted a high school friend of mine who was a real estate agent to help me list the apartment. Within 2-weeks, we had found an eligible candidate. After going through the board approval process himself (a complete chore, and another reason why coops are not good investment properties), he moved in. Excluding my fixed costs – monthly mortgage and maintenance fees – I still pocketed $500 in profit a month.
My decision to move, while predicated solely on making a career switch, ended up being a financial boost in so many ways. I was following a more lucrative career path, I no longer had to pay city and state taxes, I generally enjoyed a lower cost of living but not a lower standard of living, and I was making money by renting my apartment.
With these changes, I felt like I was no longer always strapped for cash. I found myself in a much stronger financial position and was finally able to start to make material progress towards reducing my school debt. In the two short years that I lived and worked in Houston, I ended up paying down over $50k of debt. Up until the point I moved to Houston, I had barely paid down $5k. I can’t say I planned for that outcome, but making the decision to relocate to Houston stands as one of the best financial moves I have made in my life.