Every time I see an article listing the cheapest places to live, I wonder, “Does it matter?”
Keeping a low cost of living is important, but having grown up in a cheaper city, I remember another side of the equation: A low cost of living doesn’t mean much if it’s hard to even earn a living.
Growing up in Ohio, I stayed close and went to college in Kentucky. But then I moved to New York and San Francisco and back again. My costs of living continued to increase. But so too did my salary — and the opportunities available to me.
Sometimes I miss the days of inexpensive living in Ohio, but I don’t miss pounding the pavement to get a job, any job.
There’s a lot more to a city than how inexpensive it is to live in. In the end, does it pay to live in a cheap place? Or does it pay to live in an expensive place that might have more opportunity and higher pay? The answer is different for everyone, but here are three things to think about as you decide for yourself.
1. Consider your field of work
I reached out to a few professional recruiters to find out if the same jobs in larger cities pay more. Both of the recruiters I spoke with said no.
Wade Pierson of Impact Talent Ventures told me his firm does a lot of hiring for Fortune 100 companies. He said many of them pay the same for most roles, regardless of location. And Angela Copeland of Copeland Coaching told me the same. However, they both said you’re only likely to see an increase when a company relocates you to a more expensive city.
“Cities like New York or Los Angeles have large numbers of professionals who are qualified to do many types of skilled jobs,” said Copeland. “That means that the competition between candidates is higher than in smaller markets. Because of this, there are actually times when a smaller, cheaper market may pay more than a bigger, more expensive one.”
That said, there are many companies who compete with each other for talent. So if you’re eligible for employment at one of those, you might find a different story. But that can come down to the actual field you work in. So think about what line of work you’re in, or want to be in; your field of work can be a huge factor in which place is best for you.
2. Go where there are opportunities
When I first graduated from college, my job didn’t exist in my hometown. But moving to more expensive cities exposed me to many more opportunities — and a bigger salary.
For example, a registered nurse with no experience in San Antonio, TX earns a median salary of $52,729, whereas, a registered nurse with no experience in Seattle earns a median salary of $60,638, according to Payscale. That’s a 15 percent increase.
Or if you consider a software engineer: One with no experience in St. Louis earns a median of $58,065 or $96,040 in San Francisco. That’s a 65 percent increase for entry-level software engineers.
Those working in niche fields may find more pay and opportunities in larger cities.
“If you are in technology … it may make sense to live in San Francisco for a ‘future’ career benefit,” Pierson said. “Another example may be in the advertising space. It may make sense to live in/near NYC if you are in this industry, as again, there are more opportunities, more companies in this space based there, and more opportunities to advance and earn more in this industry.”
3. Figure out the type of lifestyle you want
Pay and opportunity aren’t the only things to consider in this equation, though.
Let’s say you find more pay and opportunity in a more expensive city. Your money will definitely not stretch as far. In a more expensive city, you could pay more for housing, groceries, and everything in between. And what you get for what you pay might still not be up to your standards.
For example, one of my first apartments in New York was a one bedroom (of five) that cost the same as my parents’ two-story apartment in Ohio.
However, I didn’t need a car, I managed to keep a low grocery budget, and I found many free things to do in the city. Plus, my job paid more than double what I was earning before, putting me in a position where I could work towards debt payoff and savings. Therefore, it was still a financial win for me.
But that’s not the case for everyone.
“When I lived in the LA area, I was close to the beach, great shopping, and excellent museums,” Copeland said. “But, despite living in a very nice neighborhood, my tiny apartment lacked an air conditioner, dishwasher, or washing machine. And this isn’t unusual. If you want to live in a large city, there will simply be trade-offs, and you have to decide which trade-offs are more important to you.”
And that’s what it comes down to in the end. If all else was equal (pay and opportunity), what type of city provides the kind of life you want? That, perhaps, is the most important question you need to answer before deciding which city or area is best for you.
Do the research and decide for yourself
If you’re debating where to live right now, or soon after college, do some research. Look up salaries in your field in various cities. See how many opportunities exist on sites like Glassdoor and LinkedIn.
Find out how much it might cost to live in various cities you’re considering and consider the kind of lifestyle you want. You can even search for apartments or homes on Trulia and use PaycheckCity to see what your pay would be after taxes.
At the end of the day, this isn’t just an income decision, it’s a life decision. Looking beyond the cost of living will help you figure out where you should live to achieve your financial, career, and happiness goals. No simple list can do that for you.
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