- When receiving a job offer from an out-of-state employer, many factors should be taken into account before accepting, including salary and benefits and potential for career growth.
- But another major factor is the state’s cost of living, as the job’s higher salary could be canceled out by the higher prices for necessities. Or, worse still, the employee could wind up with less once those higher costs are factored in.
- Jim Wang, author and founder of personal finance site Wallet Hacks, shares his experience receiving a job offer in a state with a high cost of living.
When I graduated college, I had two very similar job offers. They offered roughly the same compensation, benefits and career prospects, but had one big difference: One was in a relatively high cost of living area, while the other was in a more modest one.
When you’re deciding whether or not to move for a job, there are a lot of factors at play. Some of them are pretty easy to compare, like salary and benefits, but others aren’t as easy to quantify, like living close to family or leaving a social network.
As a computer science graduate soon after the dot-com bust, I was happy just to get an offer, let alone two. I compared the two companies, the compensation, the areas I’d potentially live in and came away with a decision that seemed clear to me. Here are three factors I took into consideration and what I ultimately did.
When you think about your career arc, chances are you won’t be staying with the same employer the entire time. The Bureau of Labor Statistics tracks how many jobs the average worker has and the answer will shock you — it’s nearly a dozen jobs between the ages of 18 and 50.
When you decide whether you want to move for your job, it’s important to see if that job will offer you strong opportunities for career growth. If not within the company, what about to others in the area? Many similar companies gravitate towards each other, which turn cities into hubs of particular industries. Charlotte, N.C., is a large hub for financial services. Boston is a hub for biotech. Will you be moving into an area that is a hub for your industry? If not, does the company offer strong growth prospects so you won’t have to make a move again?
Cost of Living
“Cost of living” isn’t just a phrase people use to talk about expensive areas and cheaper areas. It hits you right in the wallet. It should be a big consideration because your dollar goes much further if you live in a state with a lower cost of living.
My sister-in-law lives outside of Houston, where $300,000 gets you a massive house with a beautiful yard right across from a community pool. Meanwhile, that same amount got us a modest townhouse in the Washington, D.C., area. The overall cost of an area can often be seen in its home values. Don’t get me wrong, we loved that home, but everything was simply bigger down in Texas for my sister-in-law.
Cost of living permeates all of your decisions, not just the big ones like job and house. You feel it when you pump your gas, pick up groceries and sign up your kids for after-school events.
Do you know how much you need to make to feel rich in your state? A recent GOBankingRates study found that if you live in New Jersey, that number is $141,390. If you live one state over, in Pennsylvania, the number is only $103,197. And if you live in Mississippi, you need just $81,038 to feel rich. That’s a huge difference.
More on Cost of Living: Cities Where You’re ‘Rich’ Earning Less Than $100,000
Social Life & Support
While your career and cost of living are important considerations, I think it’s crucial to remember that humans are social creatures. It’s hard to move to an area where you don’t know anyone and might have to rebuild your social support structure from scratch.
Social media might make it easier to find local groups, but you still have to do the legwork. If you move farther away from your family, it might also mean fewer visits and less quality time. Those might not be hard financial costs but they are costs all the same.
In the end, I chose the higher cost of living area because it offered a better career path and better social support. I could be closer to my family and my wife’s family. Plus, it was in the defense industry, which has plenty of companies in the D.C. area.
While we did have to live in a higher cost of living area, I felt that it was worth it to spend more to be closer to family, and I felt my career would ultimately be able to support the higher costs of the region. As often is the case, things work themselves out, and so far, the decision has proved to be the right one.
Click to read more about how much you need to live comfortably in 50 major U.S. cities.
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