There is something about city living that just can’t be beat. There is ease of transportation, plenty of cultural events, job opportunities. The list can go on. There are definite benefits to living in a big city, but sometimes the biggest cities have the highest cost of living. While some people believe that the salaries in a big city make up for the high cost of living, many would disagree.
Sure, you often make more money when you live in a place with a higher cost of living, but the bump in salary is often not enough to make up for the high cost of living.
If you live in an area with a high cost of living and having trouble getting ahead or making ends meet, you may want to consider moving to a different city or a suburban location where the cost of living is substantially lower. Your dollars can work harder, and you can get ahead financially more easily, even if you are making less money.
From One Big City to Another
San Jose, California is enriched by Silicon Valley and many start ups. However, the cost of living in California, especially in large cities, can be detrimental financially.
If you have had enough of California and are ready to make a change, Raleigh, North Carolina boasts the research triangle, and many residents in Raleigh are highly educated professionals. The cost of living is modest. If you were making $100k in San Jose, you would only need to make $61k in Raleigh to experience a similar cost of living. While buying a house in California can be difficult at best (unless you have a wealthy benefactor), prices are modest in Raleigh at $213k. (Compare this to $713k in San Jose.)
What could you do with a mortgage that is $500k less than one in San Jose? How much faster could you grow your retirement funds?
From One College Town to Another
Prospective college students are used to looking at the price of tuition for the schools they are considering attending as well as the financial aid they may receive, but perhaps they should also consider the cost of living in the college town as that will also affect their bottom line.
Ann Arbor, Michigan is home to the Big 10 school the University of Michigan, but cost of living is high. (Some even call it the Midwest’s New York City.) Rent goes for almost $1,200 a month. However, Lincoln Nebraska is also home to a Big 10 school, the University of Nebraska, and the cost of living is 9% lower. Rent goes for just $913 a month. Over 4 years of college, that is a difference of $14k in rent alone.
A college student’s financial aid dollars can stretch much further in Lincoln.
Moving from the City Suburbs to a Smaller Town
Currently my husband and I live in the suburbs of Chicago, though we plan to move in two to three years, ideally to my hometown, Kalamazoo, Michigan. While Kalamazoo is not the equivalent to Chicago, it is only a 2.5 hour drive from either Chicago or Detroit, and there are two colleges there. In short, we could find cultural events thanks to the university and a theater community.
By making the leap from city suburbs to a mid-size metropolis, we could earn 23.76% less than our current income and still maintain our current standard of living. Some eye opening proof? While the median home in the Chicago suburbs is $370k, it is only $195k in Kalamazoo. Rent in the Chicago suburbs averages $1,375 per month, while it is just $575 in Kalamazoo. By making the move, we would give ourselves a raise, essentially, making it much easier for our dollars to stretch further.
What do you think? Is a city with a higher cost of living worth it, or does it make more sense to strategically move to a lower cost of living locale?
Source: Bankrate.com