How to Compare Living Costs and Benefits

Suppose you’re ready to take your career up a step, and you’re exploring opportunities in various parts of the country. You may easily be misled by the money script that a higher salary equates to a higher standard of living. As last week’s column pointed out, this is not necessarily true.

What can you do to expand and reframe this money script? Here are a few things to consider:

1. If the salary isn’t published, ask the money question right up front. Many candidates leave the inquiry into salary and benefits until the last step when both they and the potential employer have invested time and perhaps money into the interview process. Asking earlier avoids this wasted time, as well as allowing you to do your research on the front end and avoid potentially passing up other opportunities.2. Get a clear picture of the lifestyle the salary will buy. One of the best ways to do this is at bestplaces.net, which offers a cost-of-living calculator to compare the relative locations and salaries you are considering. For example, if you compare Rapid City, SD, and Redwood City, CA, you will find the latter costs 259% more than the former. That means you need to multiply the Rapid City salary by 3.59 to find the equivalent salary in Redwood City.The “City Compare” tab also allows you to compare specific categories. For example, health care is 10% more in Rapid City than Redwood City, while housing in Redwood City costs over eight times as much. You can also compare factors like crime rate, climate, air quality, and tax rates. Pay particular attention to taxes; needing to pay both state and city income taxes, for example, could make a significant difference in your cost of living.3. Investigate surrounding areas that have a lower cost of living. A 45-minute to one-hour commute each way from La Honda to Redwood City would result in a 37% decrease in the cost of living. A salary of $140,000 would buy a lifestyle in La Honda equivalent to that provided by $222,222 in Redwood City.4. Examine your own beliefs about various areas. Look beyond salary amounts to your perceptions and assumptions about factors such as amenities, city-vs-rural living, lifestyles, status, etc. Then investigate the realities of those factors—both their value to you and the probability that you could take advantage of them. If a city offers professional sports, theatre productions, and concerts, for example, could you realistically afford the time and money to attend regularly? Would available public transportation fit your lifestyle and work schedule?Related: Snowflakes, Money Scripts, and the Cost of Living5. Consider your short-term and long-term family circumstances. Is a big-city lifestyle what you want as a young adult but not for raising a family? Would a given location fit your spouse’s needs as well as your own? Are your kids toddlers or about to leave home? Do you have aging parents that might need help?6. If you choose a job in an area with a high cost of living, consider ways to reduce your budget. Thesimpledollar.com has 40 great tips on how to save money on monthly expenses.Finally, put all your research together and do your best to imagine year-round daily living in various locations. Envision yourself in the different routines and possibilities, whether they might include a daily two-hour commute, a city apartment, or a home in the woods with your very own snow blower. Look beyond the financial cost of living to the emotional benefits and costs of living in various places. The most important lifestyle factor is finding the place where you will feel most at home.