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Wait, what? It’s true, my dollar is worth more than yours if you live in one of these 24 States.
- New Hampshire
- New Jersey
- New York
- Rhode Island
Why My Dollar Is Worth More Than Yours
Want to know the secret? It’s because I live in Arizona, where the value of our dollar is considerably more than the above-mentioned states. According to a study by USA Today, my dollar on average is actually worth $1.04¹.
Now if I decide to cross over our western border into California, suddenly my dollar is worth 16 cents less. A dollar is only worth $0.88 in California.
Everything becomes much more expensive as soon as I cross that Colorado River border due to the cost of living in California and the state taxes that are paid by the consumer and resident.
Let’s compare Arizona and California a bit more. In Arizona, the median (average) home value is $205,900.
In California, the median home value is $477,500, more than double Arizona.
Perhaps people in California make double the money than those in Arizona?
Unfortunately, this is not the case. The average personal income in Arizona is $37,694 a year while the average personal income in California is $44,173 a year. This equates to only $6,479 more a year!
Income Inequality Between States
Where am I going with this? No, I’m not making an argument that Arizona is better than California, because Arizona doesn’t have an ocean – or Disneyland.
The argument I am making is it is mathematically much more difficult for someone in California to achieve financial freedom than someone in Arizona.
The dollar is worth less in California, the average home price is more than double Arizona, and the average Californian only makes $6,479 more a year than their neighbors.
This means that not everything is equal in the United States – on many fronts.
This disparity between income levels, home prices, and the value of a dollar have transitioned into debt. According to Business Insider, the average Californian has $10,496 in credit card debt while the average Arizonian has $7,100.²
Now don’t be fooled into thinking that $7,100 is a reasonable amount of credit card debt. This amount of credit card debt can also be debilitating and continue to grow as the interest rate stacks on more debt.
The Younger Generation And The Cost Of Living
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With all things being equal, those in California will need to be even more diligent and frugal in order to live within their means.
Financial independence and financial peace are still possible if you live in California but realize that your neighbors in Arizona will have an easier time achieving it.
This brings up an interesting perspective. Many of us live in the locations we were born and raised in. Others of us moved to pursue a job opportunity. How many of us live where we are today after weighing the pros and cons of the cost of living?
With the financial inequality between states in our Nation, searching for the best financial location in our younger years may make more sense. I have heard countless people tell me about their plans to retire in Florida or Texas because there is no state income tax. Why do we spend our younger years broke and struggle to save enough for retirement, but when retirement comes around, we look for a cheaper place to live?
What if we reversed this process and lived in a more affordable place from the beginning? The financial impact would be huge!
A Shift In Mindset
We need to flip this ideology on its head. If we pay attention to the cost of living during our working years, we will have a leg up when it comes to retirement saving.
By factoring in how much our dollar is worth in our younger years, we may be able to live better both in our working and retirement years!
I am lucky in that I grew up in Arizona and happened to get a job here. I certainly did not factor in the cost of living when I was younger. If I was living in California right now and struggling to get out of debt, I would strongly consider moving to give myself the best case scenario to get out of debt.
If you are currently struggling with debt or having trouble saving for retirement, don’t pack your bags just yet. Make sure you have followed these steps before you do anything:
- Build a budget
- Examine your spending habits over the past month
- Cut out any unnecessary expenses
- Moving is not cheap! Consider the true cost of relocating
If after taking an honest look at your budget, expenses, and income you still can not make progress, it may be time to look at your current living arrangement.
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Interested to see where your state stacks up? Below are the current statistics:
How Much A Dollar Is Worth In Each State:
- Alabama $1.15
- Alaska $0.95
- Arizona $1.04
- Arkansas $1.14
- California $0.88
- Colorado $0.97
- Connecticut $0.92
- Delaware $1.00
- Florida $1.01
- Georgia $1.08
- Hawaii $0.84
- Idaho $1.07
- Illinois $1.00
- Indiana $1.10
- Iowa $1.11
- Kansas $1.11
- Kentucky $1.13
- Louisiana $1.10
- Maine $1.02
- Maryland $0.91
- Massachusetts $0.94
- Michigan $1.07
- Minnesota $1.03
- Mississippi $1.16
- Missouri $1.12
- Montana $1.05
- Nebraska $1.10
- Nevada $1.02
- New Hampshire $0.95
- New Jersey $0.88
- New Mexico $1.06
- New York $0.87
- North Carolina $1.10
- North Dakota $1.08
- Ohio $1.12
- Oklahoma $1.11
- Oregon $1.01
- Pennsylvania $1.02
- Rhode Island $1.01
- South Carolina $1.11
- South Dakota $1.13
- Tennessee $1.11
- Texas $1.03
- Utah $1.03
- Vermont $0.98
- Virginia $0.98
- Washington $0.95
- West Virginia $1.12
- Wisconsin $1.07
- Wyoming $1.04
*According to USA Today 2018³
This is not to say that your current living location is detrimental to your future, however, it may be something to consider. When we practice responsible financial management, it benefits us to look at all the financial aspects of our lives. Often, our location within this Nation is not considered. If you have created a budget, cut back, picked up a side hustle and are still struggling, it may be time to look at job and career opportunities in other parts of the country.
There is a saying that, “Insanity is doing the same thing over and over again and expecting different results.” If what you are doing right now isn’t working, try something new!
Have you ever relocated due to a high or low cost of living? Leave a comment below, I would love to hear how it worked out for you! Also, please subscribe by email below so you don’t miss any of my posts. Keep at it my friends, you work too hard to be this broke!