It’s not how much money you make; it’s how much money you keep that really matters.
When we first set out on our career journeys, high salaries dazzle us. But, after we live (and spend) in the real world for a while, we realize there is much more to it than that. Yes, higher earnings certainly help when it comes to financial security, but other factors matter, too. Cost of living can determine how far our money will take us, and that also impacts how much we’re able to save. If the goal is financial security, consider cost of living when making decisions for the future.
The Center for Opportunity Urbanism recently created a Standard of Living Index, which identifies metropolitan areas where salaries are high relative to cost of living. The index was based on analysis of 2015 pay data from the Bureau of Labor Statistics, adjusted for cost of living, in 106 metropolitan area with a population greater than 500,000. (h/t: Forbes)
Let’s take a closer look at the five cities with the best rankings.
Although the cost of living in San Jose, California is relatively high compared with other cities, the competitive Silicon Valley salaries make up for it. Even when adjusted for cost of living, San Jose’s annual wages came out on top at $68,855, according to the COU, making it the top city on this list.
Houston often does well in reports like this. For example, it came out fifth in WalletHub’s list of the best and worst cities in which to start a career in 2016. (Three other Texas cities also occupied spots in the top five.) Houston’s second spot ranking here is due to a mean annual salary that adjusts to $62,305, when cost of living is taken into account.
Salary in Durham, North Carolina doesn’t change much when adjusted for cost of living. The mean annual salary in 2015 was $60,126, according to Forbes, which came out to $59,526 when cost of living was taken into account.
Bridgeport and Stamford are often considered part of the same metro area; as such, they rank fourth on this list. When annual salary was adjusted for cost of living (which is lower in this region than in many other parts of Connecticut) earnings came out to $58,704 per year.
Hartford, another city in Connecticut, ranked number five on this list. Adjusted for cost of living, the mean annual salary came out to $57,050. This city could be a great place to build a career and a more secure financial future.
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