By Eric Rosenberg, WCI Contributor

The time is nearing for soon-to-be graduates to enter the real world and choose where to plant their roots. However, this is no easy task since a graduate is not guaranteed an offer in their dream city. Therein lies the dilemma for most—do you move to your dream city and hope to accept an offer, or do you find a job first and make do with the geographical location? From a financial standpoint, your decision may become easier when considering the cost of living, whether it's a High Cost of Living area (HCOL or HCOLA), a Very High Cost of Living area (VHCOL or VHCOLA), or a Low Cost of Living area (LCOL or LCOLA).


Where to Live After Medical School

Relocating is an overwhelming prospect—even when the move is entirely voluntary—and it's much more intense when you're up against a deadline. Before considering different places, you should look at your personality, how you spend time now, and where the demand is for your field. Dating life is another question you should consider if you are a carefree single looking for a bustling city in which to meet people. Others might be thinking about starting a family, in which case factors like school districts and access to childcare are other considerations that should be high on the list.

There are many more items to consider, but thinking about where you’d like to live and why is the fun part. Play the imagination game and see where you can honestly see yourself, whether it’s a city, a suburb, or a more rural community. One of the most important questions to ask yourself is how expensive your dream location will be.

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Understanding Cost of Living

Each state and metropolitan area in the US has a different cost of living, which is the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a particular place and time. Salaries vary based on the location and should, but do not always, reflect the higher cost of living in more expensive cities like Denver or New York City. Surprisingly for many doctors, jobs in the most expensive cities often pay much less than in less expensive places.

The cost of living, when defined, falls into three categories.


Low Cost of Living (LCOL) Defined

These areas are considered to have the lowest cost of living for the average citizen. Commodities such as gas, food, and utilities will cost less in these areas allowing your dollar to stretch further. Going by the cost-of-living index, states with the lowest index figure have the lowest cost of living. Some LCOL states include Mississippi, Kansas, and Alabama.

Living in an LCOL area tends to be quieter than bustling cities, and it has more capacity for job growth. In these cities, it is imperative to take advantage of the low costs of living while also fast-tracking your career. It is no hidden secret that graduates will move to less desirable cities to make a larger salary and advance in their careers more quickly since bigger cities have more job competition.


High Cost of Living (HCOL) Defined

HCOL areas are considered more expensive for the average citizen. Commodities such as gas, food, and utilities will cost more than living in an average or low-cost-of-living area. Therefore, more income is required to have a decent standard of living, and the dollar will stretch less.

Many residents in HCOL cities find it much harder to build wealth, especially when a cocktail can cost $25. Still, HCOL cities like Seattle, Boston, and Los Angeles attract millions of people, making competition rough in both the job and housing markets.


Very High Cost of Living (VHCOL) Defined

Sitting at the top are the most expensive places for average citizens. Commodities such as gas, food, and utilities will cost more than living in any other area in the country. New York City, San Francisco, and Honolulu are popular cities with the highest cost.

VHCOL cities may only be ideal if the job is too good to pass up. But if you are up for the challenge, these cities have something others might not have—folks with lots of influence. In this case and depending on your profession, paying to be in the room is 100% true, and it may pay off big if you can rub shoulders with key leaders in your field. Consider tech workers who were willing to move to Silicon Valley in the 1980s-2000s. Sure they paid a lot more, but they were also paid a lot more. Even after paying the higher living expenses, they still came out way ahead.

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Comparing the Cost of Living

You should consider multiple factors before choosing where to live—such as lifestyle, job demand, cost of living, rent/home affordability, and much more. But luckily, the cost of living is all numbers, and there are numerous calculators to determine the comparison between cities. Daily life expenses are a significant factor in wealth accumulation. A recent graduate with a $100,000 salary can hold a higher standard of living in a city such as Atlanta—where daily expenses such as rent, food, and entertainment are less expensive compared to, say, San Francisco.

To elaborate, according to one COL calculator, the number to maintain a similar standard of living in Atlanta compared to a $100,000 salary in San Francisco is only $51,874, nearly half as expensive. Try using a living cost comparison calculator from any popular personal finance site to find out how much money you’d need to maintain your lifestyle after a move.

Cities will vary significantly on the cost of living. I used the same calculator found on Nerdwallet to analyze these three popular cities to see the comparison to living in Atlanta and earning $75,000.

cost of living


New York City (Queens) Cost of Living

If the word “expensive” pops into your head when you think of New York, you are on the right track. According to the calculator, to live in Queens, an individual would need to earn $108,815, a whopping 45% increase to maintain the same Atlanta lifestyle.


Denver Cost of Living

Although Denver truly is a beautiful city, the cost of living is high, just like the mountains surrounding it. An individual in Atlanta earning $75,000 would need to make $81,503 to maintain the same lifestyle in Denver. It’s a mere 9% increase but an increase nonetheless.


Huntsville, Alabama Cost of Living

Going from the big city to Huntsville significantly changes nightlife and living costs. To live in the laid-back town of Huntsville requires 13% less of what an individual would need in Atlanta.

When thinking about the next city for yourself, always consider what you can do with the extra money you save by living in less popular cities. The sacrifice may not seem appealing, but a few years of financial thrift, aka living like a resident, can upgrade your future lifestyle.


Sometimes You Have to Follow the Job Opportunities

A pending recession in the last half of 2022 has put several large companies into survival mode through massive layoffs and hiring freezes. You might have to make lemonade out of lemons if you can't move to your city of choice because of low job demand. Sometimes, graduates will have to follow the job depending on the job market. Less desirable cities have less job competition, so relocating to one might be the opportunity needed to advance quickly up the corporate ladder or to land a physician job with a higher salary. While moving to an LCOL city can move your career forward, being smart with your finances will help speed up wealth accumulation.

I've found it quite common to see graduates move to the Midwest for excellent job opportunities before moving to their desired city after a few years. If you find yourself in this situation, take advantage of the lower cost of living to save money, advance your career, and build wealth.

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Bottom Line

Choosing where to live is no easy decision and shouldn't be taken lightly. Be proactive and accomplish your due diligence sooner than later. Start by weighing factors according to your needs and wants to help make the decision process more manageable. And remember: even if your early career is spent in a less desirable location that can help build your wealth, that doesn't mean you'll live there forever.


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