What You Could Do With Your Money In Another City

Our pals at Planet Money have put together an interactive graph showing median incomes in 356 metro areas using data from the Bureau of Economic Analysis, and how far that income goes after adjusting for the cost of living.

After adjusting for cost of living, Rochester, Minn., has the country’s highest median wage. Bloomington, Ind., has the lowest.

When you adjust for the cost of living, the biggest absolute decline is in Washington, D.C.; the biggest rise is in Danville, Ill.

Here in red, what it looks like for me in NYC as compared to one of the cities I have considered living in—Asheville, North Carolina.

The thing about these exercises is that most people can’t keep their salaries and move to a cheaper city, though when it works out, it can really work out. Take the idea that the cost of living in Washington D.C. is bananas, for example. My interview with Billy, who gave up six figures to move somewhere cheaper, showed how effective cutting down your cost of living could be.

And you? How far does your paycheck go?

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11 Comments / Post A Comment

I wonder how this is going to change if/as jobs become virtual or freelance. I work from Philadelphia for a company in NYC, and one in a small town in Wisconsin. The gig in NYC came second, and paid more — and I used it to negotiate a raise with the Wisconsin gig. Which, maybe it just makes sense that a job from an expensive city would pay more because of cost of living…but I don’t live in either of those places! Though I do commute to NYC sometimes, which makes the extra money from that job necessary in a basic-living- costs way.

Heather F G (#6,074)

Median income “feels” about $2K more where I live now, as compared to the $400 more it “feels” like in the city I moved from a year ago. That discrepancy, I’d assume, is because of the state I lived, where a major, major metro area/higher taxation influenced gas prices and food prices, even though we were many hours away and reaped none of the benefits.
It’s interesting because I feel like my money goes LESS far here.

Possibly it’s because I grew up here and therefore ruled out a lot of neighborhoods when apartment seeking based on my own personal biases from a lifelong relationship with the city, and therefore have to pay more rent. (Mostly, it’s less expensive to live in the suburbs here because the city is more in demand than in my old town of residence, where the suburbs were more popular, and visceral teen angst memories rose at the very thought of living “in the middle of nowhere”.) In Previous City I was more open to living just about anywhere due to the inherent temporariness of my tenure there/ no particular knowledge of the neighborhoods, plus the city WAS cheaper, so my housing situation was more purely a numbers thing.

gyip (#4,192)

“The thing about these exercises is that most people can’t keep their salaries and move to a cheaper city”

THANK YOU for pointing this out. This doesn’t always apply to everyone, but it applies to a lot of people, so that’s why it bugs me when people exclaim how “cheap” things are in Southeast Asia or Africa, etc. Yes. It is. Based on your salary from Canada or the US.

kellyography (#250)

My mom uses this argument all the time to try to get me to move back to St. Louis, but I wouldn’t even make what they’re saying the median salary is there. Administrative work there pays about half of what I’m making now, and I’m paying about as much in rent to live near NYC as I would for rent or a mortgage in StL (albeit with fewer roommates).

samburger (#5,489)

“The thing about these exercises is that most people can’t keep their salaries and move to a cheaper city”

This graph isn’t about moving from one COL area to another. It’s about how far the median wage in your city gets you. Living in Rochester, MN is easier than living in Brooklyn, even when you factor in the salary cut you’d take if you move. What’s the term for this? There’s a term for this, isn’t there?

So, like, a salary of $70k in MN is equivalent to making $80k in Brooklyn from a strictly COL perspective (according to CNN’s calculator), but that doesn’t factor in that wages are high and COL is low in MN. Like, you can’t easily buy a house and support a family on one income of $80k in Brooklyn, but you can easily do those things on $70k in MN.

Thingamabob (#5,522)

@samburger I believe the term is purchasing power parity, which I’m pretty sure is something someone chose because of the alliteration.

The famous PPP “index” is the Big Mac index), that is, how much does a Big Mac cost in your country: http://www.economist.com/content/big-mac-index

may june july (#2,862)

Can’t recommend Asheville enough! It’s a beautiful area, the food is awesome, and my rent is $250 :)

eatmoredumplings (#3,808)

Ugh. Moving next year for a job with a fixed national pay scale…to a city with a cost of living that’s way higher than the national average. Even though it’s going to be a raise, technically, the increases in rent, transportation, and insurance are going to eat up every additional dollar. Jobs in expensive places should pay more!

Allison (#4,509)

@eatmoredumplings That’s why the federal government has locality pay. Because yeah, Indianapolis and Chicago and San Francisco have different costs associated with living there.

eatmoredumplings (#3,808)

@Allison Oh, how I would love a permanent job with the federal government. Curse the sequester and the austerity trend!

cmcm (#267)

I kept my London job (complete with added on “London living allowance”) and moved to the very much cheaper second city of the UK, Birmingham. Seemed like a great financial decision, except for the fact that now I have the added expense of frequent journeys back down to London…. and that I now live in Birmingham.

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