What state is the best bargain?

Rising economic uncertainty coupled with high inflation has some folks thinking California’s too expensive to call home.

So as a public service – not to mention a chance to highlight a financial lesson or two – my trusty spreadsheet did some bargain hunting for anybody contemplating a departure from the Golden State.

Let me note that any state-by-state scorecard is a rough estimate of the ranking’s target. Results will suggest the winners and losers for a hypothetical but typical household. And no matter the grading formula, it won’t fit all as every potential relocation involves a decidedly different financial situation.

With the caveats noted, my scorecard was based on measuring the cost of living variances among the states and comparing those expenses against differing income opportunities. The results were converted into something I’ll call “California Cash” – what $100 worth of Golden State life costs elsewhere.

And if you’re in a hurry, the study’s overall conclusion was move to Colorado and avoid Hawaii.

But humor me, stay a while, and I’ll walk you though the bargain-hunting math that helps explain why California seems like such a pricey place.

The price is right

Now, if your thoughts behind an outbound move are purely about the household’s buying power, Mississippi is the biggest bargain.

Using two state-vs.state cost-of-living indexes – from the federal Bureau of Economic Analysis and the private sector’s Council for Community and Economic Research – you’ll see that what costs $100 in California can be had for $69 in Mississippi.

But that’s not the only place that’s cheap. Alabama living runs $71 vs. $100 in California. Then comes Oklahoma, Iowa and Kansas at $72. Next was Arkansas, West Virginia, Tennessee and Kentucky at $73.

On the other hand, just two states are pricier than California. Price-conscious folks should skip Hawaii where living costs $118 vs. $100 in California. Massachusetts will cost you $102.

And peek at these same costs for five popular relocation spots for Californians: Texas living costs $77, Florida was $83, Arizona $82, Nevada $79 and Idaho $77.

Now concentrating solely on costs isn’t for everybody. But that kind of thinking often is used by retirees or remote workers.

Hopping for housing

This national cost disparity is decidedly tied to putting a roof over one’s head.

What costs $100 for California housing runs just $35 in Mississippi, by this math. Yes, $35.

Next cheapest was Alabama at $36. West Virginia, Oklahoma, Arkansas and Iowa come in at $38. Kentucky costs $39 and Kansas and Ohio are $40.

At the other end of the home-cost spectrum is, again, Hawaii. Its housing goes for $122 vs. $100 in California.

And eyeball the shelter savings in those popular relocation spots: Texas housing costs $51, Florida $63, Arizona $64, Nevada $62 and Idaho $52.

Real estate expenses are a big part of hopping between states. They’re a huge consideration for those seeking to own a home, owners wanting more space, or folks wanting to lower the landlord’s slice of the family budget.

No pay parity

Now before you pack up and move to a bargain state, remember a key reason California costs so much: its high-paying jobs. Even most of the less-than-high-end work in the state pays better-than-average wages.

So, relocation could mean your new boss offers far less cash to spend on cheaper goods and services.

To measure the lack of parity in state incomes, the trusty spreadsheet averaged federal tallies of median household income and annualized weekly wages. Next, those estimated paychecks were adjusted to reflect effective state and local tax rates as compiled by the Tax Foundation.

Just three states had higher after-tax income than California  – Massachusetts pay runs $108 for $100 in California. Maryland was $106 and New Hampshire $102. New Jersey and Colorado tied California in this paycheck department.

Conversely, the list of poor-pay states includes six of the top 10 low-cost leaders. Income can drive the local affordability of life.

Mississippi’s income equals $59 of California’s $100. Arkansas was $65, New Mexico $68, Kentucky $71, Alabama $72, Louisiana and Oklahoma cost $73, Montana and South Carolina $75 and Ohio $77.

And after-tax incomes are also below California in the five states popular with ex-Golden Staters: Texas pay is at $87 of California’s $100, Florida was $78, Arizona $86, Nevada $80, and Idaho $82.

To the career-minded mover, local pay differences are important fodder.

The best deal?

Some people want the best of all worlds. Or perhaps just a reasonable compromise.

My spreadsheet says Colorado is the place where the intersection of living costs and paychecks was farthest above what’s offered in California.

The Centennial State blends top-shelf pay with a slightly above-average cost of living. My spreadsheet says that’s a life worth $119 for every $100 in California.

Next best deals were in Minnesota and New Hampshire at $117. Then comes Illinois at $116, Utah and Maryland at $115, Wyoming, Kansas and Nebraska at $113 and West Virginia at $112. There’s a middle American vibe within this list.

And tropical beauty aside, Hawaii ranks last as a $73 value for $100 in California. It was one of 12 states where this math showed California was a better financial bet.

The other laggards have a Southern bent: Mississippi, Arkansas, New Mexico, Maine, Florida, New York, Montana, Vermont, Kentucky, South Carolina and Louisiana.

Bottom line

Obviously, no state is for everybody. Finances aren’t the only reason to choose a state to call home. And “best state” scorecards are as much art as they are data science.

Click Here For This Articles Original Source.

Leave a Reply

Your email address will not be published. Required fields are marked *