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Home » Lifestyle Finance, Student Finances

The Top 10 Cheapest Cities for New College Grads (& Everyone Else)

Last updated by on 12 Comments

Catering articles to the young professional audience is a big part of what 20somethingfinance is all about, of course. And what better way to do that than to highlight some of the cheapest cities that new grads can move to?

Now, if you want cheap, you could move to the backwoods of northern Michigan, but:

a. you’d be bored out of your mind unless you could find a way to make a living selling smoked fish or chasing Sasquatch or UFO’s

b. yeah… so basically you’d be unemployed and bored

In my story, I talked about how it took me about 300 applications to actually find a job. And it was a job that could have been won by a high school diploma. And that was in a decent job market. Very few employers want to hire a new grad to train vs. an experienced candidate unless they are rapidly hiring and have no other option.

Cheap is important, of course. Just about any college grad can move to the heart of New York or San Francisco and find a $30-40k job, but with the cost of rent and food, good luck saving anything. But cost of living data is not the only thing you should look at. Low unemployment rates and burgeoning job sectors are important for new grads.

Complex city guide has done some of the work for me and came up with a list of the top 10 based on living wage data (which isn’t far above the U.S. poverty line, by the way). So I took it a step further and looked up unemployment rates (so you can compare vs. the U.S. unemployment rate of 7.6%) and added in some additional color that the original author was probably a little too buttoned up to add, working for a big media publisher and all. Here are their picks and highlights on why they chose them and my additional thoughts (I think half of these are good – the other half, not so much):

10. Worcester, MA

  • Annual income needed for a living wage, before taxes: $20,384
  • Unemployment rate: 7.8%
  • Summary of their thoughts: medical field there is growing (isn’t it everywhere?).
  • My thoughts: Bonus for living there? Romneycare! I kid, I kid. I always thought Worcester was the home of Worcester sauce, but then I found out it was Worcestershire sauce. Worcester? Seriously, having a hard time buying this pick. If you’re in the medical field, you can find a job in whatever state or big city you want. And if you aren’t already living in Worcester, why would you move to Worcester?

9. Memphis, TN

  • Annual income needed for a living wage, before taxes: $20,306
  • Unemployment rate: 10.4%
  • Summary of their thoughts: Memphis has tons of entertainment value, and new grads seem to like that, right?
  • My thoughts: Stay away. Memphis might be a cool city, but it has a 10.4% unemployment rate which means it is struggling right now, because it is almost 3% higher than the U.S. average. When tourism is your biggest draw and people aren’t traveling, that’s a problem. And if touristy entertainment is the biggest draw to a city? Moving there for a low cost of living is not.

8. Ann Arbor, MI

  • Annual income needed for a living wage, before taxes: $19,738
  • Unemployment rate: 5.7%
  • Summary of their thoughts: Kiplinger claimed that Ann Arbor was the second best city for new graduates and Ann Arbor is making a lot of “best” lists, therefore it must be good.
  • My thoughts: I’ve spent some years living in Ann Arbor. If you can stomach self-righteous hipsters and the world’s cockiest, most self-congratulatory college fan base, Ann Arbor can be a pretty cool city. The unemployment rate is only 5.7%  – second lowest on this list. Huge medical sector and the University of Michigan is a prevalent employer.

7. Austin, TX

  • Annual income needed for a living wage, before taxes: $19,609
  • Unemployment rate: 5.0%
  • Summary of their thoughts: Lots of good music, people like to drink, and 300 days of sunshine.
  • My thoughts: Unemployment rate is 5.0% – almost 3% lower than the U.S. average and the lowest on this list. You’ve got a burgeoning tech job sector that every big tech company wants a piece of and the University of Texas is a huge employer. Not only would this be a great place to live, for everything I’ve heard (Austin is making everyone’s “best” list), but with the low cost of living, desirability, and job growth, I would imagine that Austin presents great home buying opportunities that will benefit from price appreciation in the coming decades. This might be my #1 pick on the list.

6. Buffalo, NY

  • Annual income needed for a living wage, before taxes: $18,458
  • Unemployment rate: 10.8%
  • Their thoughts: 2nd most populous city in New York, but much cheaper than New York City. Friendly residents.
  • My thoughts: No thanks. 10.8% unemployment (highest on this list) in a city that doesn’t rely on tourist dollars means that it is still in a full-blown recession and probably will be for a while yet. I’ve been to Buffalo and see zero appeal to live there. Plus, you are nowhere near New York City.

5. Colorado Springs, CO

  • Annual income needed for a living wage, before taxes: $18,077
  • Unemployment rate: 8.6%
  • Summary of their thoughts: Four graduate schools, including the University of Colorado at Colorado Springs, which was ranked as the ninth best public school in the country.
  • My thoughts: I’m buying this one. I have friends who live here and say great things. And when you’re surrounded by the Rockies and sun, it’s hard to go too wrong. Colorado is a growth state, and this is the second most populated city, at close to half a million.

4. St. Louis, MO

  • Annual income needed for a living wage, before taxes: $18,065
  • Unemployment rate: 9.2%
  • Summary of their thoughts: St. Louis has more free major attractions than any other U.S. city. Make your savings account happy and spend your free time at the St. Louis Zoo, St. Louis Art Museum, or the Anheuser-Busch Inbev Brewery.
  • My thoughts: High unemployment rate means stay away. I spent a few nights in St. Louis in 2010 and there was NOBODY downtown, free entertainment or not. Plus, walking around in the middle of summer feels like walking in a steam room with the humidity.

3. Pittsburgh, PA

  • cheapest cities for new gradsAnnual income needed for a living wage, before taxes: $17,244
  • Unemployment rate: 7.3%
  • Summary of their thoughts: Something about Big Macs, blah blah… the Great Allegheny Passage—a bike and running trail that when completed, will connect Pittsburgh to Washington, DC. (Now that’s appealing!)
  • My thoughts: 3 pro sports teams and a population of just over 300,000? Impressive. Pittsburgh has really transformed itself from a sooty steel-town to a great place to find a job and live. There has been a significant amount of re-development along the riverfront that has given Pittsburgh the reputation of an example of how to re-invent yourself as a city. And unemployment is lower than the U.S. average. I’m a strong buy on this pick.

2. Dayton, OH

  • Annual income needed for a living wage, before taxes: $16,732
  • Unemployment rate: 9.0%
  • Summary of their thoughts: Known as one of the most affordable places to buy a house and one of the top metropolitan U.S. areas for education.
  • My thoughts: I really don’t have too many thoughts on Dayton. Unemployment rate is high and if you’re looking for a Midwest college town in that general vicinity – Columbus, Ann Arbor, East Lansing, and Madison all seem like better picks. Affordable housing is always nice though.

1. Spokane, WA

  • Annual income needed for a living wage, before taxes: $15,318
  • Unemployment rate: 9.9%
  • Summary of their thoughts: $520 monthly rent (seems really low). A 100-block area where residents can access free wireless internet. Not only is the cost of living in Spokane just over 9 percent lower than that of the U.S. average, but minimum wage is $1.19 above Spokane’s living wage.
  • My thoughts: Free wifi sounds really nice. Also, there is no state income or corporate tax. If you consume less (8.1% sales tax in Spokane) – and I know you do – you really have an opportunity to get ahead with low taxes, low rent, and free wifi. And I REALLY like the fact that you are within 100 miles of Glacier, Cascades, and Mt. Rainier. My only concern is that unemployment rate.

Best Cities for New Grads Discussion:

  • Have you lived or spent a good amount of time in these cities? What’s your take on them?
  • What cities would make your list and why?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


12 Comments »
  • Alex says:

    Hooray for Pittsburgh!

    Kind of a bummer they didn’t mention the growing arts scene or miriad of grad school opportunities if the job thing doesn’t work out. The bike trail is rad, though. Some of the communities along it have started opening businesses specifically catering to people on the trail, so that’s super cool.

    Also, maybe I’m jaded and don’t understand the big economic picture or whatever, but our obsession with sports teams is honestly a little unnerving. People get crazy drunk, destroy property, and, every once in awhile, someone dies (not exaggerating).

    Thanks for sharing this list! Interesting read.

  • Jake Erickson says:

    This is pretty interesting. The cities seem to be pretty spread out around the US which means you should be able to find one in a part that you want to live. I knew Minneapolis wouldn’t make the list, our cost of living is quite a bit higher than all of these other cities.

  • Peter Guidry says:

    Being from upstate NY, now living in NC and having traveled most of the US. I have a problem with some of these “living wages”…seems low. I guess for a young person starting out with 3 room-mates and eating ramen 4 times a week maybe. I like the Southeast & southwest (I don’t like the cold). But colorado is a good place to live too.

    Good article

  • Tiffany says:

    I’ve lived in Austin for about 11 years now, as a college student grad student, as an unemployed person, and (now) as a full time employee, and I’ve moved about quite a bit within the city limits, so I feel like I can offer a “real world” account of what it’s like living here. I’m always amused by lists such as these which make Austin seem… well, different than I’d describe it. Then again I haven’t ever really lived anywhere else as an adult for more than a couple months, and it’s all relative, right? Here’s my take on your thoughts about Austin:

    “Annual income needed for a living wage, before taxes: $19,609″

    LOL. NO. I simply cannot imagine anyone actually living within the Austin city limits in 2013 making that little money and finding the city “livable.” MAYBE if one moved out of Austin proper to the low-income trailers in Del Valle (far east) or to the bland huge apartment complexes far north, or MAYBE if you were a student sharing a one bedroom apartment with another person in an undesirable neighborhood and eating rice and beans for dinner every night. And maybe this statement was true 10 years ago. But in 2013, living anywhere inside the city, this “cost of living” analysis is unimaginable to me. I make just under $40k, live with my fiance in a 2 bedroom 1 bath apartment in a decent central/east neighborhood, and we are scraping by. We are looking to buy now (which I’ll address in a minute) because our landlord is raising our rent from $1425/mo to $1975/mo in June (no rent control in regulation-hating Texas, they can and do charge whatever they feel like they can get).

    “Unemployment rate: 5.0%”

    If you say so. I dunno, a LOT of people come here for school and never leave, regardless of their employment situation. True, we have a burgeoning tech industry, but you have to be a TECH person with TECH skills to get those jobs. Lots and lots of liberal arts majors are languishing here, severely underemployed. Any given waitress/house cleaner/bartender/secretary in Austin will at least have a BA, but these days, probably more like a MA. People like the city so much they DON’T LEAVE, even for better opportunities. UT hires some, but they require you to be pretty ridiculously overqualified before they’ll hire you. In my chosen field of library science, even the library “pages” at UT have masters’ degrees, for a job which only requires a high school diploma. So maybe there are jobs, but they aren’t all necessarily well paying jobs, especially if you don’t work in the tech industry. And you have to take out a lot of student loans to get the education to qualify you to work in the jobs you’re overqualified for, which means loads of student debt and relatively low income (my situation).

    “Lots of good music, people like to drink, and 300 days of sunshine.”

    Sure, we have a lot of cover bands composed of the underemployed people I just mentioned. We like to drink about as much as other cities I’d imagine. And it’s not just 300 days of sunshine- it’s 3-4 months of INTENSE SEARING HEAT- from late May to late September- and it is not unusual to have temperatures above 100 pretty much every day in the summer. Last summer we had rolling blackouts across the city because the grid could not keep up with the air conditioning demand.

    “I would imagine that Austin presents great home buying opportunities that will benefit from price appreciation in the coming decades.”
    Sorry but the cat is out of the bag on this one. Again, this might have been true even 5 years ago. But our recent home buying experience was frustrating to say the least. Want to live anywhere central (ie, the appreciating area)? Want to live in a house that is not a dilapidated shack? Expect to pay at least $300k, and that number is constantly increasing. Again, if you go far east or far north or far south you can buy a cheaper development house for around $150k. But that’s not where Austin property values are appreciating. Even the historically “ghetto” area of central east Austin (my current area) is being rapidly gentrified, with McMansions and expensive bistros popping up right next to dilapidated shacks, driving up property taxes and rental prices and making the area completely unaffordable to the average person very soon. And if you want to live downtown in one of the new skyscraper condominiums that are popping up like weeds, marring the once tranquil landscape- expect to pay about $3000/mo in rent, or around $400k to buy.

    Don’t forget the ungodly traffic increase Austin has experienced in the last couple of years, to the point where I’d compare it to Houston or Dallas traffic (my original city). Austin was never meant to be a cosmopolitan metropolis- it was a small college town for a long time without much infrastructure or sprawl. The population, construction, and sprawl has definitely increased, but not the infrastructure, making each day increasingly frustrating on the average commuter. The AISD school system is also suffering- the schools are so overcrowded that classes are being held in the hallways of some schools. And Austin voters recently rejected a school bond proposition that would have addressed this congestion, as it would have even further increased property taxes.

    All that being said, it’s a decent place to live if you have some money, don’t mind the hipsters, and don’t mind the heat. Compared to other cities in Texas, it definitely has nicer natural features (trees, water, hills). But it’s outgrown its britches and will need to make very big changes soon if we’re going to continue being a decent place to live.

  • I live in North Dallas, and really like it so far. Semi-affordable living. It’s expensive because it’s the city, but it’s not NYC. So many companies in the metroplex! Lots of job opportunities.

  • Steve says:

    I went to pharmacy school in Buffalo. When I moved there, I hated that city. After about a year, it really started to grow on me. Now that I’m away and living in another part of the country, while I don’t miss the cold, I definitely do miss the city. And coming from a city where it’s all about tourism (Charleston, SC), a city without a tourism economy is FINE WITH ME.

  • Aaron says:

    As someone who’s apart of that self-congratulatory alumni base, I resent your mostly true remarks about Ann Arbor and Michigan. That being said, Ann Arbor really is a fantastic town that is highly bike-able, has a great food culture, and has a lot of fun, free things to do.

    Now if you’ll excuse me I have to go stare at my degree.

  • Kate says:

    I live in St. Louis and think it would be a great place for college grads looking for somewhere cheap to live. You are correct about the low cost of living and free entrance at the Zoo, Art Museum, History Museum, and Science Center. It would take some discipline to get by on $18k, but I don’t doubt it could be done.

    If you were out in St. Louis, and there was NOBODY out, you were in the wrong ‘hood. Next time try Washington Ave., Central West End, Soulard, The Grove, or The Loop. All are great urban areas with tons of people out. We also have lots of great craft breweries now to compete with Budweiser – Schlafly, Urban Chestnut, Four Hands, O’Fallon, etc., etc. St. Louis is also basically a consensus Best Sports Town in America. Cardinals baseball is a religion, not a hobby. If you know how to do it, it’s quite possible to go to a game for cheap too. Admittedly, the central business district may be dead at nighttime when the Cards aren’t in town, but that’s the case in many cities.

    As for the jobs, while the average bum looking for a fast food job or career union man wishing he could still get the $50/hr job on a high school education might be having a hard time, St. Louis has a lot of good jobs in growing fields like science, technology, and healthcare. Here are a few examples off the top of my head…

    10/22/2012, St. Louis Business Journal – CORTEX, the bioscience and technology research hub in midtown St. Louis, is unveiling today the $186 million Phase 2 of its five-year master plan for development that will bring 1,400 new jobs and 384,000 square feet of additional lab and office space to the district.

    3/7/2013, St. Louis Post-Dispatch – XIOLINK, an IT company based in downtown St. Louis, says 2013 will be another year of growth. The company said today that it had double-digit increases last year in revenue and employment. Its plans for this year include 20 percent growth in hosting, managed services, colocation and private cloud computing services.

    4/23/2013, St. Louis Post-Dispatch – In one of the biggest corporate expansions the St. Louis region has seen in years, Monsanto said Tuesday that it would add 675 jobs and invest more than $400 million at its research facility in Chesterfield. The plant science giant will add laboratories, greenhouses and plant growth chambers over the next three years at its Chesterfield Village Research Center, and plans to hire hundreds of scientists to help it develop new plant and seed technologies.

    5/13/2013, St. Louis Post-Dispatch – Boeing Co.’s decision to open an information technology hub here is the latest in a string of big wins for the St. Louis region’s growing tech industry. The aerospace giant Monday confirmed plans, first reported in Saturday’s Seattle Times, to shift roughly 600 tech jobs here over the next three years through a mix of relocation and new hiring.

    That’s a lot of good jobs coming to town for some college grads who have the skills and training to get ‘em.

    …Ok, and I admit it’s hot & humid in the summer, but you have to make some compromises to get to live the the “cheapest city” :)

    • SLU says:

      I agree with Kate. If you were walking around downtown and there was no one there, you were definitely in the wrong part of downtown. It is actually refreshing to see St. Louis on this list, with all of the negative publicity the city gets with being on the “World’s Most Dangerous Cities” list… which is BS. St. Louis is one of those cities that you cannot just wonder around (especially downtown) since you can go from bad to ugly to worse in a matter of few blocks. However if you know what general areas to go, St. Louis can surprise a lot of people in how much there is to do, eat, and drinking. If you just do a little research on the internet you will also be surprised how much free stuff there is also to do (especially during the summer). Next time you are in St. Louis GE, find a local to show you around and your perception of the city will be changed.

  • Drake says:

    Yeah, Austin seems to be trendy pick. We also can’t forget that there is no state income tax in Texas, that may have already been factored in but is worth mentioning.

    Also hipsters are pretty much everywhere, I wouldn’t hold that against AA.

    • Tiffany says:

      I wish Austin would stop being so “trendy” and give us old timers some breathing room. It’s growing too fast and our infrastructure cannot keep up with the exponential population growth. No state income tax but high property taxes in Austin and high sales tax. Austin is rapidly becoming unaffordable.

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