It’s Easy to Have a Low Cost of Living When You Make a Lot of Money
By: Rocco Pendola
Tags: Inequality, Money, Budget, Personal Finance, Self

I write a lot about a low cost of living as the most critical element of sound personal finance:

In Los Angeles, I live in a studio apartment that costs $1,350 a month. That’s below the $1,549 citywide average for a studio (as of August 25, 2020) and significantly lower than the $1,860 average for a studio in West Hollywood, the neighborhood where I’d live if money wasn’t an object. Start dealing in one- and two-bedrooms and you head north of $2,000. I could technically afford to pay $2,000 or more, but I compromise… Compromise isn’t a bad word. It’s just a choice you make in one area to get something you want more in another.

It’s easy to “compromise” when you have a choice. Choice springs from luck and privilege:

We don’t acknowledge the role luck and chance play in not only where we end up in life and how much money we have, but how and why we got there. It’s easier to set goals and have dreams when you were born on the relatively comfortable turf of third base.

It’s easy to have a low cost of living when you have choice.

Think about it. I’m all like, “I could afford more than $2,000 a month on an apartment, but I choose to only spend $1,350.”

What a load of privileged crap.

This doesn’t mean it isn’t useful, privileged crap that applies to and helps inform my and maybe your personal financial situation. But it’s still privileged crap.

As budgets go, it’s a lot easier to start — or at least have the financial capacity to start — from a number that’s significantly higher than where you want to end up. If I was renting a $2,500 apartment, then suddenly decided I wanted to drastically reduce my cost of living, I could — with a few phone calls and clicks — get myself into a $1,350 apartment. Privilege in the inverse direction, maybe?

However, if I was barely able to make rent at $1,350, the situation gets considerably murkier.

To improve my budget situation, I’d have to get a roommate, except it would be incredibly tough to have a roommate you’re not having regular, committed sex with in my tiny studio apartment. I could move into a bigger place — with a platonic roommate — and split rent where my share would come in below $1,350. Or I could do what a lot of poor people in expensive metro areas do and move further away from the urban core. This can result in a super long commute, often on substandard public transportation.

But I digress. That’s yet another issue for another day.

The point is when you have choice, it’s easier to make choices.

We’re getting deep in the semantic weeds here. I’m basically creating my own distinction (that I don’t think actually exists) between the two words. I refer to “choice” as having the broad capacity to be able to make and successfully implement and execute specific “choices.” Or we can just call them decisions.

In any event, the more I ruminate on this thought trajectory, the more I come to the conclusion that a low cost of living is actually a luxury. Because there’s a difference between a low cost of living as one of the lifestyle choices you make (because you have choice) and a low cost of living where you have no choice in the matter.

There’s no other decision to make because you don’t have options (or you have fewer options).