If we move back to our house in Seattle, what changes financially? To build any sort of a model, I've made assumptions. I've tried to call them out, but it's not a perfect science - more of an approximate.
Total Budget Numbers:
If we stay in California (assuming we keep our housing price fixed at $5200/month, which, is super conservative & assumes we don't buy & continue to find places to rent) - monthly budget = $14,750. Our monthly budget includes all of our standard fixed monthly expenses + amortized yearly expenses like summer camps, gifts, travel, etc.
If we move back to Seattle, and use our currently earmarked "California house down payment fund" to pay off our HELOC (because, we don't need to buy another primary residence) - monthly budget =$8,820.
What's driving the $5,930 difference between the two budgets?
- Paying off our HELOC on our Seattle house frees up $1,000/month
- Our primary residence expense reduced from $5,200/month (CA rent) to $3,000/month frees up $2,200/month.
- We stop paying for expenses on our Seattle house (now categorized as "primary residence expense"), as this is the gap not made up for by our current renters. This frees up $1,000/month.
- Because we will no longer need such a significant salary for me to save for a down payment aggressively, I plan to find a job where I can work around school hours. This saves $1,100/month in childcare, but does still include summer camps.
- It also includes a laundry list of other small savings, like less travel (closer to family), less frequent house cleaning (I'm assumed to be working a more flexible job),
The numbers don't completely add up, because some things are more expensive in Seattle: gas (we drive more, to see my parents, visit our vacation house, ski, etc)
You'll notice that I've only tried to estimate the cost/expense side here, and I've made no assumptions about income. That's because there are too many moving parts around the earning side. 1) we won't be paying state taxes 2) I won't be earning at the same level, which should reduce our federal taxes, and 3) we don't know how much M will be making until he actively starts searching for other jobs.
The income side is definitely less predictable, but what we do know is that moving to Seattle reduces our required monthly income by a giant margin - nearly $6000. This provides a lot of options & flexibility for my work, schedule & our family life. If we chose to, we could also use the rest of our "California down payment savings" and either completely pay off our vacation house, or greatly reduce the mortgage principal. I think we'd lean more toward buying an investment/rental house, though with the cash flow.
As you can see, there is a very compelling financial decision to be made for moving. The rest of the picture, of course, is that M & I both have stock through our employers that vest every month. Because of that, leaving at any time means we void all future vests, which is a staggering sum of money.
For me, money is a means to an end that will allow us more flexibility & a better lifestyle. I'm hoping that we can utilize the time we've spent in California renting & turn that saved down payment money into an opportunity for us to need less monthly income. I'm very excited about the possibilities, but again, there is more to this conversation than just money. More to come on how we're thinking about all of this!