The Financial Benefits of Living in the Inner City

At the end of today, we will be halfway done with June. Meg and I made it a priority to write or produce some type of content every day during the month of June. We needed to jumpstart our blog site and this seemed like one way to accomplish that. 15 days in and we haven’t missed a day yet. Sometimes we forget to hit publish or put something out there without a picture but for the most part, as of this morning, we have 28 unique thoughts about living in the inner city.

One thing we haven’t talked much about are some of the tangible benefits of living here. I think the half way point of the month is as good as any place to do that. So, let’s talk about the financial benefits of living here, specifically the cost of housing and investments. We bought our home for $75,000 in 2006, and starting renovating it in 2007 or 2008. The attic was the first big project. The plan at the time was to have a couple of tenants rent out the upstairs while my wife and I lived in the downstairs. Our home used to be a duplex until I converted it back to a single family home. Meg actually found the paperwork at some office downtown that shows the permit for changing the house from a single family to a duplex back in the mid-40’s and a copies of those documents are hanging on the wall in out sitting room. I would say we have spent another $40,000 on renovations and $15,000 on the garage.

We paid off everything in 2015. There were three things that helped us do that, besides committing to getting out of debt. The first is income from the first set of tenants we had. It really wasn’t a ton of money, but it did help to pay for some of the initial renovations on the house. The second was and is that the taxes are so low. Our tax bill has rarely exceeded $1,000 for the year. In 2006, 6 months into our married lives, we made a combined $36,000, so the minimal tax bill really helped out. The third there is little competition for showing off your wealth here. I can’t think of a time when my neighbor had something that I really wanted. I don’t know that I have ever been jealous of anything one of my neighbors has directly bought. I’ve been jealous of yards or that their houses are a little longer or taller than mine, but that’s about it. It’s freeing and financially beneficial to not try to keep up with the Joneses.

In fact, it’s much easier to control your lifestyle living here. I wrote about the hard time I was having trying to decide if we should buy a Jeep. It is almost like the reverse of living in a suburb. There is no expectation to try and out do anyone here. In fact the opposite is true, the expectation is that you respect the modest incomes that my poor neighbors have.

It’s weird to say this, but we have been the richest people on our block for a while now. I think our house might legitimately be the nicest house in the zip code and if it isn’t the nicest it is probably the closest in appearance to what you would find in areas where the homes are worth 2 and a half or 3 hundred thousand dollars. In fact, if our house was 1.5 miles east of where it is, right now it would sell for about $300,000. The injustice of that can be covered in another blog post. I guess if I were to some up the financial aspects of living in the inner city it would be the following.

It is easy for us to live below our means here. The housing prices are low and there is little financial competition or motivation to overspend on things we don’t need. We naturally question spending money on large purchases and take a lot of time talking out spending money that we have already saved up because there is more at play than just accumulating things because we want them. We have a ton of nice stuff, but much of it was bought mindfully and with genuine appreciation for the circumstances in our lives that got us to the point we could afford to buy that stuff. I know I would have been the type of person that would have overspent on something I wanted but certainly didn’t need after seeing a neighbor buy it. If you are finding yourself living above your means, spending some time or even considering moving here would help fix that pretty easily.