Although Mrs. Mase and I currently have no plans to move from the Midwest, there have been a few situations over the years where that almost seemed like a possibility. A few of my college buddies have reached out and offered to put in a good word for me at their companies, and I have done the same for them.
These two friends in particular that I’m thinking about live on the East and West coasts, respectively. The cities they live in is massively more expensive than St. Louis. However, the companies they work for are cool, innovative, and generally do things that engineers get pretty excited about. Just recently, a job posting opened up at one of their companies that, on the surface, seemed like it might be a good fit for me.
Here’s here how I think about the situation purely from a financial perspective: first off, the salary must be comparable, and adjusted for the cost of living in the new area. Honestly, I feel pretty blessed to live in a low cost area country, while most of my friends from college live in much more expensive cities. On the flipside, they have access to much more things then I do, such as developed train systems, a more diverse population, overall stronger economies, etc.
When adjusting the salary for the cost of living, I usually do a quick Duck Duck Go search for a good calculator that does it automatically, such as the one on CNN Money. In order to do a more in depth analysis, I’d have to look at specific costs that my family would not have to pay anymore by moving from City A to City B (such as the personal property tax in Missouri that most other states do not have), and I’d also have to look at the additional costs that would be incurring by moving.
These costs include a change in the state income tax rate (for better or worse – Missouri tax law is average in this regard), different costs for commodities and other consumer goods and services (groceries, gas, costs for getting a haircut, etc.), and the big one – housing.
Housing tends to be one of the biggest considerations for my wife and I. We love our current home. We also love the fact that we got it for relatively cheap (you should have heard my east coast friends curse me out when they came to visit because you could never get anything comparable where they lived unless you paid 5 or 6 times as much). Housing in St. Louis is pretty darn affordable, with the average rent at around $850 for a one bedroom. A college kid or recent graduate could split that with a roommate and be saving a ton of cash. Also, the average price of homes sold at $137,000 (versus the median number for all of the US, at $175,000).
Not only must the salary be comparable though, it really needs to include a 10% or so premium for making the leap from one job to another. Moving jobs and getting a pay raise to compensate for the change in cost of living is essentially the same as making an internal transfer to another department in a large company, minus moving costs. To me it would never make sense to make a transition like that unless there were other strong forces at work drawing me to that particular opportunity (closer to family, bad current work culture or schedule, better weather, etc.). The premium is like a dividend raise on the stock that is your career – it provides incentive to try something new and to take a risk.
Personally, I think there has to be a lot more than just the financial side that has to be considered for moving to a job anywhere. If you’re married, you have to deeply consider the needs and desires of your spouse. Also, consider other non-financial motivations for why you would want to move anywhere.
The financial criteria above is a bare minimum for Mrs. Mase and I – under normal circumstances, never consider moving from one job to the next unless the new job compensates at least 10% higher on a cost of living adjusted basis. Other considerations might come close to or trump this (like family considerations), but not many. It does not make financial sense to uproot your life from one place to another and make your household poorer in the process.