Lessons from Living in an Expensive Area: A Money Mindset Shift
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Chapter 1: Growing Up in an Affluent Environment
Living in Orange County, California, I experienced a sheltered, suburban life. The region is often portrayed in reality shows like Laguna Beach and The Real Housewives of Orange County, showcasing a luxurious lifestyle. According to PayScale, costs in Orange County are a staggering 54% above the national average, a figure that resonates globally.
During my travels to Japan, my host expressed surprise at the costs associated with my hometown—illustrating how perceptions of expense can vary. For me, Beverly Hills epitomized luxury, while Orange County felt average—until it didn't.
After relocating to Washington four years ago, my financial worries diminished significantly. My income stretched further, allowing me to grow my investments and enjoy greater disposable income.
Here are three pivotal lessons I learned from living in a high-cost area.
Section 1.1: Learning to Live Below Your Means
In high-cost environments, necessity often breeds frugality. Before I even started earning a paycheck, I learned to manage my budget. My parents cooked nearly all our meals at home, limiting our dining-out budget to rare treats at In-N-Out. We opted for a home we could afford, shunning the pressure to keep up with others.
In California, it’s common for young adults to live with family or roommates, not just until they reach adulthood, but as long as necessary. This was particularly true in my Vietnamese culture, where living at home until marriage is customary. My parents had no urgency to push me out, allowing me to save money instead of falling into the trap of reckless spending.
To maximize our finances, my friends and I adopted various strategies:
- Staying at Home: Living with my parents allowed me to save for a future home.
- Roommate Living: Many of my friends continued to share living spaces even post-college, keeping rent under $1,000/month.
- Affordable Activities: While Disneyland was popular, we preferred free beach outings and nature walks.
Section 1.2: Developing a Mindset Against Lifestyle Inflation
Residing in an expensive area instilled habits that helped me make my money stretch further. I chose to live in a modest one-bedroom with my partner instead of upgrading unnecessarily. I remained conscious of how quickly an affordable area could become costly, ensuring that my lifestyle upgrades aligned with my genuine desires, not merely my financial capacity.
Chapter 2: Pursuing Career Opportunities
Cities like New York and San Francisco command high living costs due to abundant job opportunities, often with six-figure salaries. Most of my friends achieved six-figure incomes or pursued side hustles alongside stable jobs.
In my role as a recruiter, I noticed that companies in high-cost areas readily offer competitive salaries, unlike those in rural regions, where wages can be as low as $15/hour. This reality pushes you to step beyond your comfort zone and embrace the hustle. In my youth, this involved striving for academic excellence to gain access to premier institutions.
Section 2.1: Embracing a Growth Mindset
Rather than obsessing over every penny, I learned to think bigger. I leveraged my skills to negotiate better pay even when I felt underqualified. I now focus on creating multiple income streams, making wise investments, and exploring travel hacks to maximize my experiences.
While saving is crucial, prioritizing income growth is even more vital. Fixating on the cost of a $5 coffee preventing homeownership is shortsighted; we should instead prioritize significant financial factors.
Section 2.2: Understanding What Matters
After moving to a more affordable area, I reevaluated what I truly needed. Despite leaving California’s sunny beaches, I realized that the weather wasn’t as significant as I once believed. My initial struggle with Seattle winters gave way to a newfound appreciation for outdoor activities, which I would have missed out on in California's heat.
As I grow older, my perspective on life and finances evolves. While some friends chase city nightlife and high-end dining, I find contentment in my suburban home near Seattle, enjoying the balance of city access and a peaceful backyard.
Chapter 3: Cultivating a Conscious Spending Mindset
Rather than adhering to a strict budget, I adopted a forward-thinking approach after assessing fixed expenses, investment goals, and savings. I began asking myself what was truly important to me.
I consider my home a sanctuary, cherishing my time there while still desiring to explore new places and cultures. This duality enriches my life.
Ultimately, I’m willing to invest more for a location that offers good food and outdoor activities, but I refuse to let housing costs consume my income, leaving little for travel and experiences.
Final Thoughts
Here are the crucial lessons I've gleaned from my experience in a high-cost living area:
- Embrace living below your means.
- Seek the best career opportunities.
- Evaluate what truly matters in life.
While I’m not advocating for everyone to live in an expensive area, I recognize the invaluable lessons that can arise from such environments. Many people become complacent and are later priced out, whether due to inflation or rising housing costs.
Adopting a mindset against lifestyle inflation is essential. This doesn’t mean forgoing upgrades entirely; rather, they should always be less than your income increases. Cultivating a growth mindset will help you seek continual improvement, while a conscious spending mindset allows you to invest in what you love and eliminate unnecessary expenses.
The first video, Mind & Money pt 1: Coping with the Rising Cost of Living, discusses strategies to manage finances amidst increasing living expenses.
The second video, How to Save Money in the Cost of Living Crisis // Money Mindset 2023, offers insights on maintaining a healthy financial outlook during challenging economic times.