Want $14K in Extra Cash? Move to These 5 Cities Where Living Is Easy

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It’s a classic problem: You’re dying to squander your paycheck on a shopping spree or pub crawl, but you know deep down that this money should go toward rent (or maybe some replacement boxes of mac ‘n’ cheese). Such is life. But it turns out there’s a way to expand your expendable income—and it doesn’t involve sacrificing or changing anything other than where you live.

A new report from GoBankingRates.com has ranked the five best—and worst—cities based on a “comfortable” standard of living, which essentially means residents end up with extra play money (or savings) after paying for necessities like food and housing.

If you live in Virginia Beach, VA, count yourself lucky: It tops the easy living list. After their bills are paid, people here have an average of $13,985 extra to blow however they wish. Time to party!

Why certain cities are ‘easier’ than others

To determine how much people need to make for a “comfortable” living in each city, the study used the 50-30-20 budgeting rule: 50% of your income should go toward necessities, 20% toward savings, and the remaining 30% toward discretionary expenses like the movies or dinner out with friends.

From there, researchers compared the cost of living in each city (gleaned from local prices for housing, groceries, and more) with the metropolis’s median income. And it turns out that people tend to make more than they need in certain cities—like Virginia Beach, which topped this list for the second year in a row.

Here are the five best places to live comfortably, and how much surplus income residents will have in each place per year:

1. Virginia Beach, VA: $13,985
2. Arlington, TX: $6,906
3. Colorado Springs, CO: $5,112
4. Albuquerque, NM: $4,585
5. Austin, TX: $3,058

So why, exactly, are people in Virginia Beach swimming in so much surplus cash? One major reason is that the city has the largest concentration of military personnel outside the Pentagon, and they are (rightfully) well-compensated in terms of pay, pension, and affordable housing. As a result, says local real estate agent Cindy Black, “Our city is sheltered [from] the national housing statistics” such as inflated home prices that are plaguing other markets.

Indeed, according to realtor.com/local, the median home price in Virginia Beach is $239,000, well below the national median of $260,000.

Plus, local real estate agent Jeremy Caleb Johnson points out, real estate taxes in the area are low. As a result, “We’re a diverse and growing city of almost 500,000, and the forecast is that we’re going to continue to grow. Virginia Beach has become a wonderful place to get your start and raise a family.” (Remember: You’ll have $13,985 extra to spend at Gymboree.)

While most of these cities made the list last year as well, one newcomer this year is Austin, TX. It’s also one of the cities gaining the most residents, according to our latest report on hot spots where Americans are currently moving. And it makes sense: Tech giants like Apple and Facebook now employ a large percentage of Austin’s population, while a thriving indie music scene and outdoor art installations make it a destination city.

Cities where the living is hardest

Now, the bad news: GoBankingRates found that in many cities, people have to pay more than they make in order to live comfortably. The worst offender? Miami, where the cost of living exceeds the median income by $44,840. In other words, these people are either racking up credit card debt or tightening their belts and abstaining from all the fun that people are clearly having in Virginia Beach.

Here are the five worst places to live comfortably, and how much of an income deficit residents face each year:

1. Miami, FL: $44,840
2. New York, NY: $33,073
3. San Francisco, CA: $29,063
4. Los Angeles, CA: $25,842
5. Oakland, CA: $25,820

Not surprisingly, with the exception of Miami, these cities’ housing markets are among the nation’s most expensive, with homes costing a cool $1 million in New York and $1.3 million in San Francisco. In Miami, however, the median house price is only $279,000, so it’s a bit of a mystery why this place topped the list.

How did Miami beat the rat races in New York and California? “The largest income driver in Miami is tourism, and most of the jobs pay an hourly wage,” notes Florida-based real estate consultant Jack McCabe.

And while the price of real estate here may pale in comparison to New York and California, housing is expensive in other ways. For example, Miami has the ninth-highest rent of any U.S. city, totaling $22,800 per year. What’s more, property taxes are high and homeowners insurance is through the roof due to the threat of hurricanes.

Plus, “a substantial amount of the population of Miami lives in condominiums and communities with homeowners associations,” says McCabe. “These HOA fees can run so high that they might feel like another mortgage.”

We just hope those HOA fees in Miami pay for a community swimming pool so these poor residents have something cheap to do this summer.

The post Want $14K in Extra Cash? Move to These 5 Cities Where Living Is Easy appeared first on Real Estate News & Advice | realtor.com®.

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