Relocation: Cost of Living
When relocating, it is extremely important to know the difference in cost of living between one area and another. What is a good salary in one location might be a low salary somewhere else.
There are a lot of great tools to research the differences. Salary.com is probably the best know. You can check what an equivalent salary anywhere in the country is compared to where you currently live.
Once you have a general idea of the cost differences, it is important to look at the specific expenses that will be different. The numbers that salary comparison sites give are based on averages. Your situation could deviate wildly from the average.
Housing is one of the biggest factors. If you buy or rent can substantially change the cost you experience. Some areas are affordable for renters while home ownership is very costly. As real estate values decline, this difference should narrow. Property taxes can also vary. Even on low to moderately priced homes, the property taxes in another location can be thousands of dollars higher or lower from your current costs.
Some regions have costs that are unique. When I moved to Florida and started looking at homes, I didn't think about flood insurance. I ended up buying a townhouse within a couple hundred feet of the water in Tampa Bay and my townhouse was less than ten feet above sea level. Flood insurance was a significant cost. It should have been obvious to me that this would be a major cost, but I had never lived in a flood area.
Another factor to consider is the cost of utilities. Electricity, natural gas, water, trash pickup and cable can vary greatly. I watched my cable bill double on one relo when I moved from an area with two competing cable companies to an area that had a monopoly. Weather can also affect some costs. The cost to heat and cool may change due to a move from a temperate area to hot or cold area.
There are a huge number of factors that affect the lifestyle you will be able to afford in a new area. Research the costs and get an idea of how your purchasing power will change.
One thing to remember is that employers don't have to maintain your lifestyle when you relocate. A company will want to make an offer that will be attractive, but they don't have to pay you at your current level. Salaries typically do not vary by as much as costs around the country. This may cause you to lose buying power if you move to a higher cost of living area. You will need to decide if the reasons why the position is attractive make up for this loss in buying power. Many people find that the opportunity more than makes up for the change, especially when looking to the long term potential. There isn't a right answer to this – it's a personal preference.