I have a few offers in different cities and I want to figure out a way to compare the salaries in terms of what my savings will be after the expenses and taxes. I tried using online tools like cost of living calculators but I find the results a bit difficult to believe. For example, a salary of $110 in Houston is equivalent to a salary of $177 in Seattle and $200 in the bay area according to almost all of these calculators. But if I am a bachelor and I don't have to support my family or send kids to school, will it really be the same if I earn 110 in Houston and 177 in Seattle? Any insights will greatly help me decide. Thanks!
Just research the % difference of these major expenses and add a bit of cushion. - Rent - Commute (drive, train, etc) - Auto insurance
I was in a similar situation and have found the online calculators over estimated the differences significantly. If you are getting a roommate (or two roommates) you can get housing for 1500-2200 in SF depending on how much you care about your apt. Speaking for Sf, food and alcohol is more expensive. Generally, everything is more expensive. If you are going out every weekend to extravagant meals and bars then maybe you really feel the SF pricing more. But itโs not like everything is 2x the cost of another city, more like 15-20% higher. And you generally get paid more than that. I think the people who really feel it are those with families who canโt share COL with roommates. But otherwise, I would take the higher raw total in a high COL city over the alternative. Oh, and another big thing is you can ditch your car in SF. Between parking insurance and car payment it rarely makes sense to have one. Not many people I know have cars (again, this is for people in 20โs without families)
Iโve gone through the same challenge. You should first adjust by tax differences. However after that the cost of living is tricky because while people say use a calculator and do a percentage that isnโt totally accurate. Because the main factor in cost of living is housing. And equivalent housing between, say, Seattle and Bay Area is a 25k/yr difference. Everything else is the same. So 25k of 150k is 16% and gets smaller as your TC gets bigger. But COL calculators do not adjust for this. They say San Francisco is 33% more expensive but 33% of 150k is much different than 33% of 300k. Actually maybe COL isnโt that tricky just tack on extra adjustment for housing that you would want to live in. If you imagine your standard of living going up while you work there, then account for that too with a linear adjustment.
Calculate after tax for a state using paycheck with.com salary calculator - #1. Calculate your expenditure for cheaper city by categories - rent, auto & gas, misc. Adjust the rent, auto insurance and 15-20% for misc to get your new col - #2 #1 - #2 is your savings and that's what you use to compare cities.
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You should do the calculations yourself. The online calculator gives you a rough average comparison. Do you intend to live with roommates or buy a house? Get married, have children? Will you drive or use a shuttle? Are there state/local/sales taxes? What is the TC difference? In your case the biggest difference will be housing and state taxes. Both are crazy high in the bay area. With 200K TC in bay area you will pay 15K in state tax and at least 30K for one bedroom rent (with bad commute)