6 Ways That Better Paying Job Out of State May Cost You


On the market for a new, higher paying job? Have you expanded your job search across state lines? When contemplating a job that would require you to move to a new state, part of the decision process should be determining how the local costs, public infrastructure, and local school system will affect your financial bottom line.

In some areas of the United States, the increase in salary the job offers might not be enough to offset the added potential living expense. Here are some things to consider.

1. Cost of Living

Before accepting a job in another state, it's essential you don't assume that a higher salary offer in another state will lead to a larger disposable income. Each state has a slightly different cost of living. When you move from one state to another, you can expect slightly different housing, food, utility, healthcare, transportation, and healthcare costs.

If the new job offer is from a state with a significantly higher cost of living, the "raise" might:

  • Not be as extensive as you expect
  • Be an equivalent wage
  • Be a pay decrease.

For example, a $25,000 salary in Boise, Idaho is comparable to a $47,274 salary in Brooklyn, New York. In order to really be considered a raise, individuals that move from Idaho to New York should expect at a little more than a salary of $47,274 a year.

Before accepting any jobs out of state, check this cost of living calculator to ensure that you are actually receiving a raise.

2. Housing

Housing costs, rent, and home ownership can differ significantly from state-to-state. You will want to evaluate how the expected rent or mortgage rates (lower, higher, the same) will affect your potential disposable income.

Moving from Idaho to New York, for example, can lead to a steep increase in potential rent or mortgage costs. Average rent cost increases from $995 (Idaho) to $3,295 (New York).

3. Transportation

Moving from an area with a good public transit system could significantly increase your expenses. According to the Evolution of the Daily Commute, car bound commuters will spend $1,129 dollars in gas annually to travel to and from work. A good subway, bus, or train system can be significantly cheaper due to the fact you're potentially trading gas and parking expenses for a reasonably priced ticket.

If you are unavoidably car bound, you might consider how the difference in gas prices between states will affect your finances. Moving from Oklahoma to California for example, would increase the amount you pay for gas from $1.39 a gallon to $2.47 a gallon. That can lead to a large extra expense.

In addition, each state has different average insurance rates due to state regulations, and the percentage of uninsured drivers on the road. Moving from a state with low insurance rates to a state with high insurance rates might mean that you won't have as much extra money from that raise as you expect.

4. Quality of K-12 Schools

The quality, success, and financial stability of the local K-12 public schools are not uniform across state or county lines. Depending on where you move, your children could be facing a potential downgrade in the quality of their education and an unexpected extra financial expense that could counteract the positive effect of your raise.

Parents can check out the quality of local schools:

Moving to an area where the public schools are failing could inevitably lead families to make the hard decision to either gamble on the poor educational institution or invest time and potentially money to enroll students in a more favorable environment.

5. Quality of Local Colleges

College is expensive. In-state college tuition can be a real money saver. How much college costs depends on the state that you live in. Moving from Wyoming to New Hampshire, for example, could mean that in-state college tuition is suddenly around $10,000 more expensive. Even with a raise, that might be too big of a price hike to reasonably handle.

As an added concern, you should evaluate whether or not you're moving into an area with too many colleges on rocky financial standing. These colleges and universities tend to hike tuition rates, cut back on other amenities, and possibly declare bankruptcy.

Bankruptcy, in particular, can be costly for current students. It can lead to red marks on their official transcripts (if the school closes mid-semester), forcing students to go through another college application process, and face the reality that many of the classes and credits earned won't be recognized by the new college.

6. State Regulatory Guidelines (For Your Industry)

Professional standards are often set not on a federal level, but on a state level. Moving to a new state can either create new opportunities, or limit the opportunities available to you and your significant other. The most far reaching differences can be found in the medical field.

  • Twenty-two states grant Nurse Practitioners full autonomy to diagnose and treat patients without supervision from physicians. This can allow NPs to open private clinics or grants the ability to apply for a broader range of jobs.
  • Twenty-five states have entered into a Nurse Licensure Compact (NLC) that allows nurses to practice in any other state that has agreed to join the compact. This can allow individuals to engage in travel nursing or telemedicine. Moving out of or into an NLC state could either shrink or increase professional opportunities.

There are a lot of financial factors that should be evaluated when changing jobs within the same state. When moving out of state, there are even more factors that could affect how the new higher paying jobs will negatively or positively affect your net worth.

Have you taken a job in another state? What was your experience?

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