My wife and I grew up living near extended family, and so understand how living close to family can make life cheaper. However in our early marriage my employer transferred us couple of times, so that we lived no closer than twelve hours from relatives, and we felt the economic impact in a number of ways.
As soon as we were able, we moved back close to relatives and bought a home we hope to remain in for the remainder of our lives. But by then some relatives had passed away, and others had moved to other regions of the country, including my parents. Though we tried to visit, it was expensive to travel, trips were few, and we have watched our children grow up barely knowing most cousins and one set of grandparents. They have almost no emotional bond with long-distance relatives, as compared to the relatives who lived close.
Over the years, I have been mystified to watch retirees pull up stakes and move to Florida, leaving their grandchildren behind. I have also observed other parents encourage their children to take on glamorous long-distance ventures, such as being foreign-exchange students, and going to colleges on the other side of the country.
I know two of these exchange students who married people they met in these foreign countries. One never moved back to the U.S. and the other now regularly takes costly trips back to Europe to see her family. The same happens with students who go to far away colleges: they often meet and marry people who live far away, or find employment near those colleges, and never return home.
None of our children ever expressed a desire to travel, and neither did we encouraged it. Instead, as our children grew up we talked to them often about the potential long-term benefits of ultimately settling close to their parents. Even if they might be enriched by long-distance ventures, there is a trade off. If they move away for a higher-paying job, I pointed out how this increased pay could be offset by the economic disadvantages of living far from relatives. But even more, I want my children and grandchildren to be enriched by the bond that happens when they live near each other. Those relationships will be important to them long after my wife and I are gone.
The economic benefits of living close are many. My grown children regularly avail themselves of the numerous skills and resources my wife and I have acquired over the decades. We have built or repaired their furniture, shared garden produce, loaned our cars when theirs was being repaired, done complex sewing, rescued them when their cars died in the middle of nowhere or in the middle of the night, offered free baby sitting, loaned tools, carpooled, found items for them at yard sales, etc. One can, of course do much the same with close friends, but likely never really to the same degree as one can with family.
I know that the relationships between parents and grown children do not always work smoothly. As parents we had to learn to stop parenting grown children, and instead treat them with the same respect and boundaries that we could treat a non-relative friend. It also means that we do not repeatedly bail them out for making poor choices (so far, not a problem). We do not allow them to mooch or take advantage of us. We refrain from offering uninvited advice as well, except in cases of things such as safety.
I regard helping grown children to be like putting pennies in a bank, as I know at some point in the distance future, I or my wife might want to remove some of those pennies. In the case of my grandparents, my wife and I often provided labor that enabled her to stay in her home (and out of a nursing home) for much longer than had she no area relatives. We did yard work, house painting, drove her to appointments, stacked her firewood, stayed with her when she was sick and so on. I wanted to do these things for her because she did so much for me growing up.
Our culture has become so transient and disconnected, that we have forgotten this obvious frugal strategy.