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