Imagine that you land your first job making the average college graduate salary of $45,000. Good news: no more ramen noodles. You can afford an apartment without a messy roommate! You can buy that designer bag you’ve been eyeing. Well, maybe. It all depends on where you live and the lifestyle you choose to adopt.
Before you accept a job offer, consider the cost of living expenses for where you’ll end up. Cost of living expenses may mean the difference between saving money and living paycheck to paycheck.
Let’s put that into perspective.
Pretend you move to Waco, Texas – one of the most affordable cities in America. Assuming you earn your $45,000 salary here, you would make about $5,000 more per year than the area’s average combined household income. Your rent would be about $800 per month, so you could afford to live alone. Texas has no income tax, which means more money would remain in your paycheck to use as you please. Healthcare and education are two of the top industries in Waco; if you don’t work in either, you’d want to research opportunities for job growth. In smaller towns, you may be able to get an excellent entry-level job, but you may not find enough opportunities for advancement. Additionally, you would probably need a car for commuting to and from work, and visiting Dallas and Austin for big city fun.
With the same $45,000 salary, you could live in New York, one of the most dynamic and expensive cities in the nation. In the Big Apple, the median household income is $51,000, so you’re already $6,000 behind. The average rent in New York is $3,000 per month. On your income, you’d have to find roommates – one probably wouldn’t be enough – and live in a borough like Queens or Brooklyn. The city is among the most fashionable in the country, so you might have to invest in refreshing your work wardrobe. But it’s doable, especially if you only need to take care of yourself. In New York, you’d get world-class networking with America’s top professionals. Public transportation is often steps away, so you could ditch your car (along with its gas, insurance and maintenance bills). If you can make it in NYC, you can make it anywhere.
According to this cost of living calculator (feel free to explore others) residing in Waco is 53.6 percent cheaper than living in New York City. In other words, earning $20,869 in New York City would be like making $45,000 in Waco. Whether or not Waco would give you the same personal and professional satisfaction as a big city – only you and your wallet can decide!
Here are some factors to keep in mind regarding cost of living:
Relocating to start a new career? Still weighing the pros and cons of a new city? Tell us where you’re headed and your plans for making it “home sweet home”.