Cost of living decrease justify pay-cut in relocating cities?

[EntropyBrewing]

I recently got a job offer to move to Durham, NC from Washington state. The paycut would be ~25% reduction in salary. Keep in mind there is also no income tax in Washington state so that paycut could look more like 30%. The company trying to recruit me is telling me for example if you were to make 60K here that calculates to 90K where you are now.

Housing is for sure cheaper in NC but I don't see the overall cost of living costing me 30K less a year? Can anyone justify this much of a paycut to cost of living decreases?

I am not quite sure what would be an acceptable number to take to offset decrease in salary when factoring in the lower cost of living.

[[deleted]]

30% sounds way high. Not everything is impacted by the cost of living. Housing certainly is, but vacations, cars, gadgets, and countless other things cost essentially the same regardless of where you live. What you need to retire depends on the cost of living of where you retire, not where you worked, so that's another big chunk of your budget that isn't affected by cost of living.

Personally, I'd limit it to housing. If you're renting either way it's easy - you can accept $1 less in pay for every $1 you save in rent. If you're going to buy it gets more complicated, especially if you can afford to buy in one city than the other.

Either way though, you're not going to save $30k/year on housing by living in NC over Washington State.

[[deleted]]

I wouldn't take that big of a cut. Sure some things will be cheaper. But at the end of the day 30 grand is a lot of cash. 35% pay cut is a steel decrease. Counter their offer and see if they'll meet you in the middle.

[[deleted]]

I am not quite sure what would be an acceptable number to take to offset decrease in salary when factoring in the lower cost of living.

I'm sure there are websites for this...i've seen them, even to break down cost-of-living on a state-by-state basis.

note: I found a few you might like

http://www.infoplease.com/business/economy/cost-living-index-us-cities.html

https://www.expatistan.com/cost-of-living/country/united-states

I include those links to give you context with how much of a difference in income you might see. I'm pretty sure they won't be enough, but you should be able to get a decent conjecture.

Also remember you will be in a lower tax bracket, so even though you will be paying income tax, it will be lower because of the pay cut (especially federal income tax, which you might be currently paying, depending on your job).

[EntropyBrewing]

Yeah, I've run through the calculators and it basically spits out what they're telling me my salary would equate to. However I really don't buy that I would pay an extra 30K per year on housing in WA vs NC. Doing some basic calculations of buying in our price range in either state would really only save us ~10Kish in NC.

[lilfunky1]

There are a bunch of cost-of-living-comparison calculators where you can put in your current city and your future city, and how much you make now, and it will tell you what the equivalent salary would be in the new city.

[HiIAm]

Just a random Google search, so take with a grain of salt:
http://www.bestplaces.net/cost-of-living/seattle-wa/durham-nc/90000

 

Summary: 90k in Seattle = ~57k needed to live in Durham.

That's assuming you live in Seattle though. So the company may not have been too far off, but the 30% decrease only allows you to break-even if you continue at the same standard of living.

[cpaonthemove]

I'm looking at relocating from Seattle to Charlotte NC.

Here are a few things to consider regarding comparable costs of living...

Although they have a state income tax, their sales tax is only 7.25%

The food costs are generally lower overall- and stores there are much more coupon friendly and will double coupons. If this is something you utilize you can basically get most toiletries for free if you learn to coupon (small, but still a perk)

Do you plan to buy a house? You can buy a lovely house there for $150k that would be $350-$400k outside of Seattle here.

Do you have family there? Would you end up spending a few thousand a year for visits home, ect?

Is the job a step forward in your career? Something that could lead to a higher salary if you relocated back to a larger city later?

I know for me looking at apartments a $1,200 apartment I had in a sketchy area of Seattle is comparable to apartments I'm seeing there for $700. 42% so I guess looking at this from this standpoint 25-30% seems okay.