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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|