I’m starting to think that personal finance advice should be tailored to where you live.
But what about other types of advice, the kind that’s commonly bantered about by the talking heads on T.V. and the “experts” on the Internet? For example, it’s commonly accepted that you shouldn’t spend more than 30% of your monthly income on housing expenses. HA! Say the people living in New York, Los Angeles, D.C. and all of the other cities in the U.S. coasts. I personally spend 38% of my monthly income on housing expenses and my apartment is a steal for where I live.
Or what about the experts who suggest getting rid of your car and using only public transportation? HA! Say the people living anywhere besides New York and D.C. Suggesting a car-free lifestyle is just not realistic advice for the vast majority of Americans, especially if you live in a rural area.
Putting aside major aspects of personal finance that are affected by geography – like transportation and housing costs – what about the less tangible financial effects of where you live? A lot of the women I know who live in New York admit that they feel pressured to look really stylish all the time (it is one of the fashion capitals of the world, after all), which leads to more spending on clothing and shoes. Also, if housing costs are high (again, N.Y.C, D.C., L.A.) apartments are usually small, and if apartments are small inviting friends over for a pot luck or a movie night is hard. Socializing almost always has to take place outside of the home, which is costly. I could never, for example, invite friends over for drinks. There would be nowhere for anyone to sit because my apartment is so damn tiny. If I want to get together with more than two people at a time, we have to go out. These seem like small cultural things, but their cumulative effect on your wallet can be huge.
We all like to say that “personal finance is personal,” but I also think that personal finance should be personalized. Like, personalized to your age, gender, and, yes, where you live. Of course, that would really complicate things for people like Suze Orman and Dave Ramsey, who thrive on giving general advice to the general population, but let’s face it: I want advice from someone who understands me and my personal situation. And part of my personal situation is that I live in a super expensive city. So yeah, it would be really hard for me to keep housing costs to only 30% of my monthly income. Does that make me a personal financial failure, or just another urbanite? (See, this more complicated than you thought!)
So what do you think? Does geography influence your personal financial picture? How might moving somewhere else change the advice you listen to and the advice you don’t? Do you think there’s any PF advice that applies to everyone?