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The one issue I always have with these cost of living comparisons is transportation.
Someone mentioned this already, but if you live in almost all of those cities, you absolutely require a car. With gas prices having ballooned in the past year, along with the usual costs for insurance/car payments/maintainance/repairs (the most unpredictable cost of all), the cost of transportation in most cities is miles ahead of what the typical New York subway commuter pays.
I moved from Montreal, Canada (great transportation system, no car needed) to Austin, Texas (car required), and realized how much car costs skew cost of living comparisons.
the thing is that in nyc you can find a job that is making 96,000 a year in other citys top pay might only be 50,000 a year
so basically it all evens out in the end
You realize this doesn't make sense to brag about nor is it accurate. What good is it to make 96,000 a year if in most other cities its only worth 50,000-60,000? Also pretty much all the cities I listed have more than their fair share of six figure salaries.
New York City is great for many things but being a good bang for the buck it is not. Why are we so afraid to admit we are paying a premium to live here? We all make less despite having higher salaries.
You realize this doesn't make sense to brag about nor is it accurate. What good is it to make 96,000 a year if in most other cities its only worth 50,000-60,000? Also pretty much all the cities I listed have more than their fair share of six figure salaries.
New York City is great for many things but being a good bang for the buck it is not. Why are we so afraid to admit we are paying a premium to live here? We all make less despite having higher salaries.
One advantage of a higher base salary in NYC vs its lower equivalent in another city is that one's base is used in many beneficial ways. For example, the person with $96,000 in NYC will have a greater social security benefit than his/her counterpart with the "equivalent" $50,000 in Houston since both employer and employee contributions are calculated on one's base.
So enjoy NYC for its cultural and other amenities then hightail it to a state where your retirement money can now go further - just a possible scenario.
The one issue I always have with these cost of living comparisons is transportation.
Someone mentioned this already, but if you live in almost all of those cities, you absolutely require a car. With gas prices having ballooned in the past year, along with the usual costs for insurance/car payments/maintainance/repairs (the most unpredictable cost of all), the cost of transportation in most cities is miles ahead of what the typical New York subway commuter pays.
I moved from Montreal, Canada (great transportation system, no car needed) to Austin, Texas (car required), and realized how much car costs skew cost of living comparisons.
Indeed! Many on-line sites like Edmond's do an anaysis where they show that the true cost of owning an average car is about $600-$800 a month. In NYC with access to the subway one pays a fraction of that for commute to work.
I guess when one factors the higher real estate costs, however, it does even out.
Indeed! Many on-line sites like Edmond's do an anaysis where they show that the true cost of owning an average car is about $600-$800 a month. In NYC with access to the subway one pays a fraction of that for commute to work.
I guess when one factors the higher real estate costs, however, it does even out.
See that's the thing though I think people expect that in a lower cost of living city they will suddenly have tons of cash left over each month. That's not necessarily true. However for what you are getting for your money is more. For example my apartment here in Queens in a city like Houston or Dallas would cost me 50-60% less. It would also come standard with a washer and dryer in the apartment (not the building the apartment), dishwasher, central air, and possibly garage parking. Not to mention the thousands of other amenities it would come with.
It may even out in the end as far as what you have left over for savings, but it doesn't even out for what you are getting. That said New York City is cooler on so many levels so its all worth it. I have just come to terms with the fact that I am not getting the best bang for my buck here.
One advantage of a higher base salary in NYC vs its lower equivalent in another city is that one's base is used in many beneficial ways. For example, the person with $96,000 in NYC will have a greater social security benefit than his/her counterpart with the "equivalent" $50,000 in Houston since both employer and employee contributions are calculated on one's base.
So enjoy NYC for its cultural and other amenities then hightail it to a state where your retirement money can now go further - just a possible scenario.
By the time I retire Social Security will be even more worthless than it is now. However that's kind of my plan.
I plan on inflating my salary here in NYC, then when I want to start a family (8-10 years from now?) move to a cheaper city while trying to convince the job I am worth my same salary if not a raise in the new city.
I became suspect with the claim that Houston is 92% cheaper. That means that $50,000 in NYC has the same buying power as $4000 in Houston?! A $100,000 salary in NYC equals an $8000 salary in Houston?!
Anyway, I checked. maybe you read the numbers wrong. Here are numbers I got from the same source. They seem more realistic.
Dallas: 44% cheaper
Houston: 48% cheaper
Austin: 42% cheaper
Atlanta: 32% cheaper
Philadelphia: 44% cheaper
Boston: 22% cheaper
Washington: 1% more expensive
Chicago: 23% cheaper
San Francisco: 14% more expensive
Los Angeles: 5% cheaper
A few points here. You don't need a car to live in all those cities - I live in Chicago and get by just fine without one. A friend of mine lives carless in DC, and he's cool with it, too. It is true that there are more places in Chicago and DC where a car is a necessity, however, given that housing is more affordable than in NYC, finding a place with good transit access is not especially difficult (at least in Chicago).
Also, as the OP's link states:
"You’re looking at New York versus the United States,” he said. “If you were to look at New York versus San Francisco or versus Chicago or versus Boston, the difference wouldn’t be as large.”
So, while NYC wages may be, say, 50% higher than wages in Kansas City (just to take a random city), the COL in NYC is probably more like 70% higher. At the same time, while Chicago or Boston may only be 20%-25% cheaper than NYC, wages there are probably only 5%-10% lower, so it still comes out cheaper. Clearly, I'm pulling all these figures out of my a**, but you get my drift. Wages are higher in New York, but it generally doesn't make up the difference in cost of living.
That's not to say that the city isn't worth it, anyway, of course.
Also, owning a car is a lot cheaper if you don't use it to get to work. I can say from personal experience - when I lived on Staten Island after college, I had two different jobs. The first job was in Staten Island, and sometimes parts of Brooklyn, and I had to drive. My next job was in Manhattan, so I took public transit, and while I kept my car, I was spending half as much gas as I was before.
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