The Best – and Worst – Cities for Millennials to Earn a Living
The biggest and most diverse generation in U.S. history, millennials are known for their mastery of digital technology, social media, and perhaps less flattering, their penchant for job hopping or living at home with mom and dad.
Millennials have also struggled with record amounts of student loan debt and a struggling job market. And while it’s no secret that student loan debt is on the rise, millennials also earn roughly 20 percent less than their parents did at the same age. So, there’s a reason for their debt.
Despite the challenges, there are some states that make it easier for millennials to build wealth. Read on to learn the best – and worst – states for millennials to earn a living from HowMuch, compiled from data from the U.S. Census Bureau.
The states, (including the District of Columbia), where millennials earn the highest annual salaries are Massachusetts ($80,307), Minnesota ($77,090), North Dakota ($76,836), Washington, D.C. ($75,220), and Maryland ($74,737). (Worth noting: these numbers were adjusted based on cost of living.)
Don’t live in one of those states? Don’t worry. Another study found the highest-paying companies in each state. Among them were NRG Yield, an energy company in New Jersey, VirnetX Holding Corp, a technology company in Nevada, Geron Corporation, a health company in California, Infinity Pharmaceuticals, a health company in Massachusetts, and Arlington Asset Investment Corp, a financial company in Virginia.
So it’s not just the location that matters. When trying to boost your earning power (or even when choosing a career), the field matters, too. Pursuing a career in technology, finance, or health may be your best bet to a fat paycheck.
The worst states for millennial salaries include New Mexico ($51,900), Mississippi ($53,300), Florida ($54,900), Louisiana ($56,400), and Arkansas ($57,300). There are many reasons for millennials earning lower wages. But perhaps the biggest contributing factor is that many graduated college during the Great Recession, which some experts believe will negatively impact their earning power for their entire career. Ouch.
Another surprising fact about the lowest-paying states for millennials? Many states on the West Coast, where the cost of living is historically higher, didn’t pay significantly more than those states in other areas of the country, like the South. And the wages for millennials in the South were pretty low across the board, as well.
So if you’re a millennial looking to make a big salary right out of the gate, looking for jobs in the Upper Midwest – in states like North Dakota and Minnesota – may be the best financial move. Another bonus? Lower cost of living.
Tips for Building Wealth
So why does it matter? For one, experts say that the earning power of millennials is reflective of how the economy is doing as a whole. And if you're a millennial yourself, you are probably looking for ways to pay off your student loan debt, buy a home, or save for retirement.
While you may think you have the rest of your life to make money and increase your earning power, that's not necessarily the case. A new report says that your earning power is shaped pretty dramatically affected by how much you earn in your 20s.
So, millennials – now is the time to build wealth. Apart from going back to school, securing a higher-paying job, or moving to an area that allows you to more quickly build wealth, here are some other tips on how to boost your bank account.
- Start investing now. You may think you don’t have enough money to invest. You’re wrong. The earlier you start, the more compound interest works in your favor and helps your money grow. Not sure where to start? Open a 401(k) and contribute monthly. Or consider hiring a financial advisor.
- Consider a side gig. Then invest or save your earnings. From driving an Uber to freelancing, the options for remote or side gig workers have never been better.
- Rent out your home. You could also rent out a room in your home using a site like Airbnb. The home-hacking trend among millennials is on the rise, and with good reason. Statistics show that housing costs account for about 30 percent of a household’s monthly income.
- Create a budget – and stick to it. Following a budget isn’t just for low-earners. Organizing your monthly spending and telling your money where to go helps you stay out of debt, work toward your financial goals, and even save money.
- Live below your means. From how much you spend each week on groceries to the cost of your mortgage or rent, living below your means can help you pack away cash quickly. Plus, it’s a great, lifelong habit to form.