Is moving closer to work financially worth it?

In major cities, living closer to work will save you time and money on parking and transportation costs. But you'll end up paying much more for your living space. 

Charles Dharapak/AP/File
Motorists drive in the rain north, top, on Interstate 270 in Rockville, Md., out of Washington. Moving closer to work cuts down on commute times and transportation cost, but high living costs tend to make up for it, Hamm says.

It’s a classic problem for people who live in a city. Initially, they choose to live well outside the city because it’s less expensive to find housing. Eventually, they start to realize that it’s not the great deal they thought it was. The commute is long. If they’re driving a car into the city each day (usually, they are), the cost of gas and maintenance starts to add up.

Before long, people start wondering whether it’s worth it to pay more for housing and live closer to the city.

The advantages are clear.

If you live closer to work, your commute is shorter. If you can shave 15 minutes off of your commute each way, then that’s another half an hour each day that’s available to you for personal use. If you shave 30 minutes off of your commute, that’s another hour each workday. Some people like to commute, but I know that a lot of people loathe it.

You may gain access to public transportation. This may save you on parking, fuel, and maintenance on your commuting vehicle. It also opens the possibility of actually reducing the number of cars owned by your household.

The big disadvantage is that you’ll likely pay much more per square foot of living space. In general, the greater the population density of an area, the more expensive it is (though many other factors play a role). So, if you’re looking for an area closer to the city center with many of the other factors staying the same, you’re going to be paying more per square foot of living space.

The consequences of that are a smaller living space and/or a bigger mortgage, depending on what choices you make.

Depending on your personality, the move into the city might make for better living conditions… or it might make for more challenging conditions. It really depends on what you value in your life. Some people value more personal space. Others value greater access to cultural events. Some people like more opportunities to explore nature. Others want more immediate access to services. Some value having lots of people around, while others like to have plenty of space.

For example, Sarah and I would rather live in a rural situation far from cities, as we like being able to explore nature right out of our backdoor and not having people nearby. At the same time, I perfectly understand why other people would prefer to live in a city or in a suburban situation. These desires have little to do with money.

This still doesn’t answer the question: is it a good idea to move closer to work? I don’t think there’s an immediate “yes” or “no” answer to the question because there are so many variables in the move, as alluded to above.

What you need to do is pick an area where you intend to move and do a careful side-by-side comparison of the area where you live now and the area where you would move to. Here’s a list of things to consider.

1. What is the monthly cost of housing in each location? This includes things like rent, property taxes, monthly mortgage payment, and so on.
2. Would the new location provide what you need from housing in terms of space and access to services?
3. How much shorter is the commute from the new location? How much time does it save each day?
4. Are you going to be working at your current job for long enough for this move to make sense?
5. Do you have access to public transportation at the new location? Would you use that instead of your car to commute?
6. What about the other services in the area? What is police coverage and the crime rate like? What’s the average education in the area? What are the school districts like (particularly important if you have children)?

Many people will go through these questions and still find themselves unsure because of the difficulty of putting prices on non-monetary things. For most people, it comes down to a question of what free time is actually worth to you. Is 30 or so minutes of time not commuting each workday worth the change in scenery and (likely) additional cost? To know the answer to that, you have to have a strong assessment of what free time is worth to you, which is something that no one can answer but you.

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