Figuring out your living situation is the most important decision you can make when lining up new employment. You’re going to have to make tough, calculated decisions, such as in which neighborhood you wish to reside, how much you are willing to spend on living accommodations,and how you plan on negotiating a salary that will cover these expenses.
Dealing with the cost of a house or apartment is frustrating, and when it comes to renting, you should keep in mind a general rule of thumb: your rent should be equal or close to how much you earn in one week. Of course, this is not always feasible, especially if you are going to be living in a city that has higher housing costs, such as San Francisco, Los Angeles or San Jose.
Ultimately, each city is different. According to a Bloomberg study, out of 50 metropolitan areas, 37 were deemed to be affordable for the average 18-34 year old. However, the areas that appealed the most to young adults were the ones where homeownership was the most unattainable.
“The biggest disparities are on the West Coast and Boston and areas of NYC. Take the three California hubs of San Francisco, San Jose, and Los Angeles. The typical young adult in those cities doesn’t even make half of what is needed to afford a home.” By comparison, parts of New York appear to be “relatively affordable,” according to Bloomberg. But this does not take into account that most millennial reside in and around Manhattan, where the median home value of all of New York wouldn’t even buy you a kitchen.
When you find yourself taking on new employment in one of these regions, it is important to factor in how much of your new salary is going to go toward funding your living space. In fact, you will most likely need to negotiate a significant raise from what you were previously making in order to do this. This is common practice for the companies in these regions who hire from the outside. For example, if you come from a region such as St. Louis—where the earnings gap is much greater—and relocate to a job in San Jose, you will need to negotiate a salary that will cover your needs. Keep in mind though, that the gigantic ranch style house you had in St. Louis, or the cape in Boston–well you won’t need those in the sunshine states. You trade square footage for a terrific outdoor lifestyle. The winters of the past hunkered down in front of a fireplace will change to a bike ride along the beach. Still, companies in the “California hubs” and other high-cost metropolitan regions understand these dynamics and will most likely be accommodating to your needs, if you express them.
Of course, these are just the basic economics to consider. Other factors to contemplate are the needs of your significant other: can he or she also afford to make the move with you? Are there similar industries or companies in which he or she can also find a job? We all dream of living in big, glamorous urban meccas, but can we actually afford to do so?
Navigating the intricacies of living costs is indeed tough, but it is important to do your research and know exactly what you need in order to thrive at a new job in a new city.