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Discussion Starter #1
I've posted similar posts in the past and still am confused.

I'm trying to figure out which is financially better (personally better is subjective isn't it?) - a) living in a larger city where wages are higher, but that means both parents working and paying for daycare, but does not necessarily require vehicle ownership (or at least avoiding having two cars) and the strong possibility of being able to rent out part of your home (rooms or a granny suite) with ease. Option b) is to live in a smaller town where one could pay cash for a modest home and live off one income.

Has anyone else struggled with this? Our personal preference is larger city, which gives me more work options, houses generally sell easier (we will be selling again in two or three years) and more ammenities in general. But I am trying to determine financially which is advantageous....!
 

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You are assuming the price of real estate will vary significantly by location - which may or may not be true.

Another option (for what it's worth) is to keep housing costs low by renting - if you do indeed want to live in a big city. And *especially* if you will be selling before 5 years have elapsed.

I lived on a farm in rural eastern Ontario for a decade, and now I live in Canada's biggest city, so I have experience with both situations!
 

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It all depends on work. Do you have the sort of job which is typically only found in a large city? Live where your work is.

For quality of life, the rural lifestyle can't be beat. Cities have way too many social and transportation problems. Small towns are where it's at in my opinion. How nice to be able to breathe fresh air and not have to worry about traffic, parking, construction and constant fire engines.

Will you be able to go to Tim Horton's and Wal Mart in this type of town? No. You'll need to drive in to the city for that stuff.

And if you want to live close to a city, you may end up looking at a bedroom community which can be very costly but don't have many of the social problems found in cities.
 

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We worked in Toronto but now live in Canmore. Toronto is still a nice place to visit...but Canmore is fantasic. Going for a nice bike ride to Banff in a few minutes. If you can afford it here it is a wonderful lifestyle.
 

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Define "large" and "small".

Large to me is Toronto
Small to me is Peterborough
Tiny to me is Bath


As an ON govt employee I have the option to move to T.O. where there are more opportunities internally. However, while people love to think govt employees are filthy rich, we're far from it. Middle class (and happy about that). Thing is, we choose to stay in Peterborough. Why? Pretty much real estate and what we deem to be quality of life. My private sector cousin has an older house in a great neighbourhood in T.O., and we have a very similiar house in a great spot in Ptbo. They paid 2.5x as much for theirs and they still need to TTC to work whereas we walk 10 minutes to our office.

Would I move to Bath if our office moved due to RE prices? Unlikely if I had the choice - quality of life also includes entertainment and amenities.
 

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The problem with living in a small town is that your assets accumulate at a lower level which is probably more than plenty to live in the small town, but aren't enough to move to a big town during retirement... in the reverse, if you build up assets with a high income, even though expenses are higher, when it comes time to liquidate the assets you'll have more options as to where to go.

That's assuming, of course, that the salary premium of the big city is equal to or greater than the additional costs for a similar job... some jobs don't pay well no matter where you are.
 

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Strictly from a financial standpoint, if you can get a "big town" job, in a small town setting, that's the best bet. Actually, if you can get a good job in a economically depressed area, that's best. For instance. My wife an I have a have a combined salary of only60ka year. But in the town I live in, $165,000 will buy you a 2800 square foot home on a half acre within view of Lake Erie. People here who can make 100k a year (municipal employees and the like) can really live like kings.
 

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Discussion Starter #8
More details: All moving costs would be covered as well as the costs incurred to sell/buy a home. If we end up in a larger city we will get an allowance, which is taxable and sometimes makes a big difference (ie Toronto) or not (ie Halifax).

It's difficult to leave the personal preferences out, but I'm trying in order to get a good picture if it's financially better.

My husband will make the same wherever he goes, not huge salary, about $57K/yr which may go up a K or two next year. If I work in a reasonably sized city (Winnipeg, Halifax for instance) I make in the low 40's for income. If we end up in small town (Trenton or Petawawa for example) chances are slim to none I would get anything in my field of work, but housing costs are a lot cheaper than in Halifax (we're talking core of Halifax, near Dal).

Hopefully this information will help people give me some advice. Sometimes I wonder if I even know what I'm asking!! :)
 

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The lower cost of living in smaller centers is related to the corresponding lack of jobs in those centers. So if you're saying your chances of finding work there are slim to none, that lowers the $ appeal of living in such places, even if all the other factors as I mentioned above are better. Ask yourself if the loss of your income is worth it and sustainable to the household. Cost and benefits.
 

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sounds like addy has a military spouse!

I just moved from halifax to trenton - what i can say is that housing is cheaper here. my salary remained the same, my wifes is around the same so we live a little nicer now.

Living in a small town has allowed us to be a 10 minute walk to downtown and the grocery store.

As people have mentioned, you lose out on ameneties in a small town, but what you generally gain is space and openess. If the salary stays the same, i'd say small town is better. if salary increases enough, large city is probably better
 

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I think it's very difficult to answer, because the reality is that the 2 income situation is generally better than 1, even accounting for living costs. However, I think there are so many variable factors: family, lifestyle, etc. that it makes it difficult to point out personal preference.

My wife is an urbanite. You stick her in rural Canada and every day of my life I wouldn't be hearing the end of it. For me, I'm in a subspeciality in medicine that confines me to an academic teaching centre. Moving to a rural area may be profitable, but I wouldn't be using my subspecialty skills. So there are a lot of factors that tie us to a city.

At the end of the day, on a pure financial basis, it also depends on the potential upside and gains. But to me, living in a city is about the personal choices that are most acceptable.
 

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It is dependent on your career- there aren't many varied work opportunities outside urban areas.
I live in a hamlet of 1000, 10 minutes to work in a town of 20,000.
I'm a unionized employee (OPSEU) so I get paid the same here as someone doing the same job in downtown Toronto.

I'll guarantee you my standard of living is much higher...

I know I do my job better than when I worked in the megacity. My head is clearer. I feel I have many more recreational options.
I live in a setting that just doesn't exist in the city.

I have a Loblaws and several Tim Hortons within 5 minutes of home or work if I chose to go to one.

I can be in Toronto for a concert or show in 90 minutes.
 

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I just moved from small town to big city (with the same company) and financially it has been very good move. Renting is definitely the way to go to avoid inflated real estate prices. Apartment downtown can be more expensive, but avoiding the commute is one of the things I think is worth the extra money. Being within walking distance of work saves on car insurance, gas, parking, etc... to make up for the price difference. Overall, my cost of living is roughly the same, but I traded my house for a small apartment.

As far as quality of life, that all depends on what you like to do. I spent a month in a hotel eating out at different restaurants every day (maybe why I am a cheap tipper). This would not be possible in the small town I came from.

If you are set on buying a house and raising a family, the city can be expensive.
 

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The problem with living in a small town is that your assets accumulate at a lower level which is probably more than plenty to live in the small town, but aren't enough to move to a big town during retirement... in the reverse, if you build up assets with a high income, even though expenses are higher, when it comes time to liquidate the assets you'll have more options as to where to go.

That's assuming, of course, that the salary premium of the big city is equal to or greater than the additional costs for a similar job... some jobs don't pay well no matter where you are.
I live in a city of 150k and houses are at least 5x cheaper than Toronto. I highly doubt I could make 5x the salary I make now, in fact a very small % in Toronto do. I am the same as addy, and if I had to move to a big city I would be compensated for the cost of living but it would certainly not be multiples of my salary (more like 25% at best). Having a mortgage 5x bigger or more means paying far more CMHC insurance and mortgage interest. I couldn't care less that someone in a big city is "accumulating" more RE assets (read: RE bubble) when I can bank the money I save on interest

The region I live in does have one of the highest income-RE ratio in the world and is also know for some of the best night life in the country. I can walk to the bars, and I can do whatever outdoor activity I want from my backyard (open public land) and there are even trail systems to cross private land. My salary is about the same wherever, but a spouse making min wage (and tips) here would probably be a better situation than making average in TO with the added expenses

Income and RE aside, I can be to work in 5 minutes flat if I catch the green lights and I even pass a Timmies. With construction and accidents I imagine a big city resident can spend like 10% of your life commuting! 10% of your LIFE. I spend this time on leisure activities outside almost everyday if not catching up on household chores

The smaller the city the better imo. If I could I would live in a rural area where I know and trust my neighbors but a "small" town of 100-150k is a nice compromise to me. Maybe I am missing the allure since I am from the country but visiting the big cities from time to time is more than enough for me.

I could go on about pollution, crime, water, noise, space etc but I digress
 

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Big cities offer many more alternatives, including employment choices. Working for life for a single employer did not appeal to me. I have lived in Sarnia and London, Toronto, Edmonton and Vancouver. Small is great but it tends to limit your outlook.

Also my friends in Sarnia have found that their children have moved away in search of careers. They have now retired in the same home they bought in 1969 so their housing costs have been much less than ours. But our net worth is higher than theirs and we no longer own in a big city. Sold in Toronto and now rent in Vancouver and own in PV.
 

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Someone in a big city is forced to invest more in RE and luckily for you it boomed. How much further can the income-RE ratio be stretched in the big cities? Who knows

Someone living in a smaller town is likely to spend more money on something else rather than invest it (if they don't have a $500k mortgage payment to make they probably blow it on something else). If they banked/invested the money they would spend in a big city, they should also have a high net worth. What if your friends in Sarnia pretended they had a huge mortgage and bought REITs during the same period

Children move away from their parents everywhere. They get to see the world and can still visit about as much as most who live in the same city

I would love to live in the same house for 20-30 years but I would also not want to do the same job. Even if you work for the same company there should be career progression if you want it. I can't imagine companies in big cities are valuing their HR enough if people are changing companies so often to progress
 

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It's not just about money, of course. I lived in rural areas most of my life because I love nature, am a birder and amateur botanist, and could have all the free entertainment I'd ever want simply by stepping out my back door and going for a walk. Plus I had a garden, a canoe, and a big network of friends, so I was just as busy as I've ever been living in a city. Cities always seemed incredibly boring to me; it took me a long time to get used to life in a big city and I was miserable here for the first four years or so.

In contrast, some people need a big city and all its choices in order to be happy; they'd be bored out of their skulls in a small town or out in the country. That's fine too -- you just have to know yourself and what makes you content.

There's also the health factor. I was just reading about a study that found that people who live in compact, walkable urban neighbourhoods drive 30-40 percent less than people who live in dispersed areas, are more than twice as likely to get the recommended daily 30 minutes or more of physical activity, and weigh 10 pounds less on average than people who live in dispersed areas such as rural or small towns.
 

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Discussion Starter #19
There's also the health factor. I was just reading about a study that found that people who live in compact, walkable urban neighbourhoods drive 30-40 percent less than people who live in dispersed areas, are more than twice as likely to get the recommended daily 30 minutes or more of physical activity, and weigh 10 pounds less on average than people who live in dispersed areas such as rural or small towns.
I agree with that, moving from Vancouver to Winnipeg was a huge eye opener... the women here are much.more.hefty.!!

I prefer large urban living - I really enjoy walking out my door, walking 5 or 10 mins and picking up some organic milk at the health food store, walking another few minutes and picking up fruit and veggies from a small independant. Or walking 10 mins to church or to a community centre or public library (still can in a small town but chances are way less you could walk to ALL these places).

Financially, in general larger cities you pay more tax (not always though!) and the property is more expensive. How about these considerations:

* city, most likely hire taxes due to higher RE
* city, extra expense of additional interest you would pay on a higher mortgage
*city, higher second income your spouse could bring in
* city, strong possibility we could easily rent out a room or two to students
* city, (in our case) small "bonus" for higher cost of living - for some it would mean a higher income depending on employer
* smaller town, strong possibility of being able to pay cash for a modest house
* smaller town, spouse still has the option to work (just for less $ likely)


Honestly I really like the idea of having a house paid for... which would mean small town living. But then I get totally bored in a small towns.
 

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>still can in a small town but chances are way less you could walk to ALL these places

Not sure I agree. Most small towns have a main business district on (you guessed it) Main Street. Ever been to Beausejour? Everything is on main street and you can walk the whole thing across in probably 15 minutes.

The issue is more of desire. I for one don't want to walk all the way across town carrying several bags of heavy groceries. If you just need a couple of items to finish off a recipe then it's great being able to walk nearby but when you've got a list chances are you'll want to drive to the store. But nothing says you can't park centrally to your places and just walk to each, put the stuff in the car, walk to the next etc. That's what I do.

>But then I get totally bored in a small towns.

I don't get this. What is it that big cities have (which small towns lack) that keeps you from getting bored? Have you lived or spent much time in a small town?
 
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