Housing & Mortgage
Moving for Happiness, Part 3: Financial Security
How to weigh income against everything else you want
I once took a job with a U.S. corporation in London as a “local hire.” The designation meant I was paid in local currency, at local rates (aka, less), for doing the same job, in the same office, as my American expat coworkers. It also made me ineligible for financial perks they collected, like moving expenses, exchange rate protection, company health insurance, retirement benefits and annual plane tickets stateside.
“Local” also meant I was governed by British labor laws and traditions. Where my colleagues got a couple of weeks vacation a year, I had six, plus a dozen or so one-day “bank holidays” they often worked. They parceled out their leave into long weekends and a few extra days stateside. I spent weeks at a time exploring Europe. I had my first child on the National Health and paid nothing for our extensive hospital stay. I took almost four months of paid maternity leave.
There’s nothing about that tradeoff I regret.
In this three-part series (see Part 1 and Part 2), I’ve urged you to pick your relocation destination based on where you will be happiest, day after day, year after year. I’ve suggested 14 questions so far, meant to help find that happy place. None of them touches on how much money you’ll make.
That omission strikes even me as naive. Of course money is important to happiness. If you stress over paying bills, increasing your earnings is a priority in a move. Career advancement, partly about money, can partially make up for a less-than-ideal location fit. The vast majority of us can’t (or shouldn’t) move to our dream destinations without serious consideration of the financial implications.
However, I respectfully suggest that many people unnecessarily prioritize maximal earnings. Our achievement culture, where wealth is a key measure of success, can make turning down the highest paycheck seem like failure. That mindset, I think, is counterproductive to finding a home for happiness.
A respectable body of research, some of it summed up here, backs me up on this. Pursuing work you love feeds happiness; earnings beyond a comfortable living does not. More free time is far more happiness-inducing than extra cash.
Research from Dan Witters at Gallup estimates the amount at which more cash stops buying more happiness. His findings range from about $54,000 a year for a household in the central part of the country to $120,000 in the
Great Lakes area.
Here, with the last of the series’ 21 questions, I offer sources of data to help calculate that amount for you, in each potential destination.
How much of your income goes to housing? Yes, home prices make living in San Francisco, Boston and other popular cities very expensive. But consider the methodology. These rankings typically compare average cost of housing against median local income, for an average percent of income spent on housing. Above 30% of gross pay toward housing is considered too much, although millions of people pay more.
These aren’t useful enough stats for figuring out if I’ll have more disposable income in San Jose or San Diego. My income isn’t the average and neither is my home. You need to research specific neighborhoods and properties on Zillow, Trulia and other sites to personalize your own calculations. Keep in mind that maintaining the size of your home in a move isn’t likely your key to happiness.
Do you need one car, two cars or no cars to live there? Driving a car everywhere used to be a sign of wealth and status. Today, high-income 26- to 33-year-olds drive less than low-income young people, and many who must drive buy a nice used car.
I own a house, a car and a garage. But I walk or bike for the fun stuff. I’ll Uber back for $7 if it’s wet or late. Nice, convenient buses are here to take me anywhere else. I’d have a whole lot more fun money if I’d just give up that car. (AAA calculates average car ownership cost at $9,282 a year.) To understand how locals feel about going carless, download Trulia’s study on car ownership rates in 59 metro areas. Another study compares public transportation prices around the country.
Can you increase your career income there? If your career future is bright and the location conducive, it may be worth temporary scrimping for a life where you want. What’s your industry’s outlook in each location? Are the pertinent operations stand-alone successes, or are they more vulnerable stepchildren of distant parent corporations? If the job you’re moving for doesn’t work out, are plenty of similar ones nearby? Indeed, Glassdoor and other job websites can help with that.
On the flip side, someone who can work from anywhere — like home — might massively increase disposable income by moving away from their big-city employer. Go here to do the math for your own income and choice of locations.
Are people moving to there or from there? Population influxes typically spark rising home values, increasing property taxes and home equity. Exits often signal the local economy is (or is about to be) in a slump. The U.S. Census Bureau recently published 2018 population figures.
Does the place encourage you to spend on superfluous stuff? Advertising makes us unhappy. Exposure to the shiny watch, exotic vacation, new car, restaurant or outfit — they all raise our aspirations, making whatever we’ve achieved, acquired or experienced seem less adequate.
Some places make it easier than others to avoid things that spark expensive desire. My city has a lot of interesting nature, community events and other cheap stuff to keep me occupied. (See Part 2.) I have disposable income, but I simply don’t buy as many things because I’m rarely in stores. Portland, Oregon, bans billboards and limits big box stores. The city consistently ranks high in happiness, despite often dreary weather.
Will healthcare be expensive? You’re more likely to go bankrupt in America trying to pay your family’s medical bills than from losing a job. Click on this map to see what each state is doing (or not doing) to make health insurance affordable; get quotes from healthcare.gov.
Do some homework even if you’ll buy health insurance through an employer. Availability of service varies widely. Texas has one mental health care professional for every 960 residents, according to Mental Health in America. (Translation: Good luck finding a psychiatrist for your depressed teenager there.) Massachusetts has one for every 180 residents.
Consider lots of destinations. Despite limitations, location cost studies are great for generating ideas on where to go. Greensboro, North Carolina? It’s one of the cheaper places for renters and is situated conveniently between mountains and beaches. St. Louis has relatively affordable home prices. Columbus, Ohio, has more off-street bike paths than most cities and a low cost of living
One questionable study — it ranks Plano, Texas, as the happiest city in America — is worth perusing just for locations to check out elsewhere. Take the rankings in all these studies with a grain of salt, but let them expand your imagination.