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Health, Life Events

You Could Be Paying for More Insurance Than You Need

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Tiffany Hamilton knew as a college student that she would one day be an entrepreneur. With that in mind, she made sure to enlist the help of a financial planning company when she bought her first life insurance plan at 21, as she was just getting her start in real estate.

That first policy was a $20,000 term-life plan that cost her about $80 a month. When her salary increased, she decided she needed more coverage than that. As a single woman with a burgeoning business, she wanted to make sure she had enough coverage to take care of any debts and leave something for her mother..

Her insurance representative at the time encouraged her to up her coverage. So at 25, she converted her policy to a $1 million whole life policy.

“I thought by going to a financial planner, sitting down and answering the questions, and then going off of their recommendations, I thought I was doing the right thing,” Hamilton told MagnifyMoney. “Yes, the $1 million would give my mom X, Y and Z, but was that in my best interests?”

Now 35 and running her own real estate business based in Tallahassee, Fla., Hamilton has lately been wondering: Is it possible to be overinsured?

How much insurance is too much insurance?

As we grow in our careers, home life and families, paying for life insurance becomes another one of those obligatory items on our financial to-do lists, like establishing a 401(k) or an emergency fund. But the sheer volume of life insurance options available may have created a unique problem: Some of us might be overly insured. That is, our insurance coverage may be wildly disproportionate to our salaries and overall net worth.

Joel Ohman, a Tampa, Fla.-based certified financial planner and founder of Insuranceproviders.com, said it’s also easy to end up with a policy that has more bells and whistles than you genuinely need.

Generally speaking, life insurance is a type of coverage that provides a payout to a selected beneficiary in the event of the policyholder’s death. This is often called the “death benefit.” Many people aim for a death benefit that includes a payout substantial enough to cover a few years of the deceased’s salary, funeral expenses and any outstanding debts.

Those with families may also want to include money to pay off a house, children’s college funds and more.

Of course, there are other options for anyone who has a large estate, want to make charitable contributions, needs special tax breaks or has other complicated financial circumstances to consider.

“Unless there are complex estate planning requirements or the insured has exhausted all other investment options, then typically the idea to use life insurance outside of a straightforward death benefit payout is a fool’s errand that will only result in a fancier car for your insurance agent,” Ohman said.

The cost of being overinsured

The difference in premiums between insurance plans can be striking, and if you’re not sure precisely what to get, it’s easy to throw up your hands in frustration. But if you simply choose a plan that may “sound right” without carefully exploring all your options, you could easily wind up paying for more coverage than you need.

Most insurance websites include insurance calculators to make it easy to figure out what your costs could be for a variety of different plans. Using State Farm’s calculator for example, a $500,000, 20-year term policy for a 30-year-old woman in Arizona is about $33 a month. Comparatively, a whole-life policy is $460 a month. That’s a difference of nearly $5,000 a year.

In Hamilton’s case, she realized she was paying thousands of dollars more for insurance than she needed to. In 2016, she converted her $1 million whole-life policy into a $500,000 universal-life policy.

“That cut my budget down by almost $10,000 a year,” she said.

John Barnes, a certified financial planner and owner of My Family Life Insurance, said those cost savings can be important for families.

“My take is, you can be doing something else with that money,” he said. “Families today are squeezed. I’m not about to overextend them, I’m going to get them the right amount.” The additional savings, he said, could go toward retirement, college tuition or other financial need.

Ohman said that a simple term-life policy is a great way to get inexpensive insurance that will still take care of most families’ needs.

“When people are looking for pure life insurance, they want to protect their loved ones if something should happen to them, and they want them to be financially taken care of in a worst-case scenario,” he said. “Ninety-nine percent of the time, then, that cheaper term life insurance product is going to be the best fit.”

Chris Acker, a chartered life underwriter, chartered financial consultant and independent life insurance broker in Palo Alto, Calif., said he almost always recommends term-life insurance to his clients, particularly young families.

“If you’re talking about people in their 30s,” Acker said, term insurance “is hands down the best way to go.”

That’s because it’s an inexpensive way to get insurance that provides coverage for your entire family. Plus, you can always get additional insurance later. But he cautions against applying one piece of advice across all situations.

“The bottom line is, there’s no right answer,” he said. “No two cases are the same.”

Types of life insurance

There are two main types of life insurance: Term insurance and permanent insurance. When consumers typically think about life insurance, they are looking for an option that will provide their families with financial stability if the unthinkable happens. If you work full time for a company, it’s possible that your workplace has a some type of life insurance policy, often equal to one year of the employee’s salary.

But some experts recommend that families purchase their own insurance plan outside of their employer because employer-sponsored life insurance typically falls short of their family’s actual needs.

Permanent insurance does exactly what the name implies: It provides lifelong coverage. In addition to the death benefit also provided by term-life insurance, permanent insurance also accumulates cash value. But with that added benefit comes pricier premiums.


Whole Life


Variable life


Universal life


Variable universal life

Whole life is the most common type of permanent insurance. With a whole life policy, the premium never changes. Part of the premiums goes into a savings component of the policy, which builds cash value and can be withdrawn or borrowed. That cash value also has a guaranteed rate of return.

Variable life offers the same death benefit, but allows consumers the option to seek a better return by allocating premiums to investments like stocks and bonds.

Universal life lets you vary your premium payments and gives a minimum death benefit as long as the premiums are sufficient to sustain it.

Variable universal life insurance is a sort of mix between variable and universal life, meaning consumers can vary premium payments and can also allocate them among investment subaccounts.

Best for: Those who want a policy that offers cash value and stable premiums. There are also tax advantages to this type of policy.

Best for: Those who want the same advantages as a whole-life policy, plus the option of allocating premiums toward different stocks and bonds.

Best for: Those who want the same advantages of any permanent policy with the option of varying premium payments. For example, those who may want to start with a lower premium that increases as their finances do

Best for: Those who want the option to vary premium payments, but also the option to allocate those payments toward different stocks and bonds.


Term-Life Insurance

Term-life insurance provides coverage for a specified amount of time — let’s say 15 or 20 years. Customers pay a premium each month and are covered through the specified term. This is typically the cheapest insurance option.

Best for: Those whose need for coverage will disappear or change at some point, like when a debt is paid or children reach adulthood and go to college. Also good for those looking for a low-cost option.

Even within term- and whole-life insurance, there are additional products you could be offered, like mortgage life, return of premium (in which your premium is returned if you outlive your initial term) and final expense (which covers just funeral expenses). There’s even an option that would provide lifetime protection for your estate upon your death. With all the available options, it’s easy for the costs to add up.

Tips to choose the right life insurance

Use a life insurance calculator. Wealthy families, those with special-needs family members and others in unique situations will also have different insurance needs. Most insurance websites offer calculators to help consumers decide how much coverage to take. The consumer website lifehappens.org also offers step-by-step guidance on choosing insurance, along with a needs worksheet.

Get multiple free quotes. Consumers can also get free quotes from multiple insurers from sites such as My Family Insurance, InsuranceProviders.com and http://myfasttermquotes.com/, which are independent-agent sites for Barnes, Ohman and Acker. Keep this in mind: Getting a quote doesn’t obligate you to work with a particular company or insurer.

Choose the right advisor. It’s also important to understand that hiring an insurance agent or financial planner is just like any other relationship: You want someone who works best for you and inspires comfort. Hamilton said she not only interviewed potential reps this last go-around, she also requested references and asked them about their company philosophy before making a decision. LifeHappens suggests that consumers use referrals to find an insurance provider.

Seek out independent agents. When it comes to actually choosing an agent or financial planner, Ohman suggests looking into independent agents that aren’t tied to a particular insurance company. That’s because a “captive” agent can only recommend those products that his/her company provides, whereas an independent agent can recommend any number of companies. That doesn’t mean they don’t have your best interests in mind, just that they aren’t able to provide customers with options outside their company offerings.

“The only products that they know about, the only products that they’re even allowed to bring to your attention,” Ohman said, are “their own products.”

Understand what it means to be a fiduciary. Another thing to consider is whether the company or adviser you’re working with is a fiduciary. “One of the big advantages you get with working with an insurance agent who has that CFP designation is that they are supposed to be working as a fiduciary, which means they put your financial interests first,” Ohman said.

Those who hold a CFP designation like Ohman are expected to provide fiduciary care to their clients. It’s also perfectly OK to ask your agent if he or she is, in fact, a fiduciary.

By the way, this doesn’t mean that other agents can’t or won’t provide clients with the type of insurance that works best for them. But don’t hesitate to ask if they’re paid on commission and whether a bonus or trip is tied to a particular transaction.

Check the insurance company’s ratings. Once you get a recommendation, he says, make sure the company has at least a A rating or better from independent agencies that rate companies’ financial strength. There are four independent agencies that provide this information: A.M. Best, Fitch, Moody’s and Standard & Poor’s. Do your research and find the ratings from each of the four agencies, because some companies may highlight a positive rating from one agency and play down a lower rating from another agency.

Trust your gut. Barnes said regardless of whom you choose to represent your insurance needs, make sure you have a level of comfort.

“Don’t be discouraged, there are some great independent agencies,” he says. “If it doesn’t feel right during the process, trust your gut.”

That means continuing to be open-minded, but also not allowing yourself to purchase an insurance product you don’t want or can’t afford. During that first meeting or so, Barnes says the agent should spend time getting to know you and your situation without necessarily trying to sell you on a product.

Similarly, Acker says it’s OK to question your agent to make sure you’re getting the best policy for your needs and lifestyle: “Don’t be bullied into buying what someone else says you should buy.”

For her part, Hamilton says she also looked into whether companies were commission- or fee-based. That’s because a fee-based company will charge a set rate, which can ease the worry of having an overzealous rep who may offer expensive products to boost his or her commission.

Because many good policies also offer a conversion option, you’re not “stuck” forever with something that doesn’t actually work for you. That means you have the option to change policies, as Hamilton did. Some consumers also choose to buy additional policies down the road.

But, and this is key, you shouldn’t let uncertainty or the fear of overpaying keep you from getting at least a simple policy.

“Think about today — the immediate need; protect that right this second,” Acker says. “Then that gives you time to work on your financial planning. Then you can figure out if you want to keep the insurance.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Crystal Lewis Brown
Crystal Lewis Brown |

Crystal Lewis Brown is a writer at MagnifyMoney. You can email Crystal here

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Life Events

Places Where Adults Still Live With Their Parents

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Moving out of your parents’ home has long been considered the ultimate rite of passage into full-fledged adulthood.

But today’s young adults are more likely to live in a parent’s household — and to live with their parents for a longer period, according to the Pew Research Center. A range of potential explanations has been offered for this generation’s “failure to launch,” from a desire to prolong adolescence to an aversion to marriage and commitment.

While these factors might play some role, the reality for most adults ages 25 to 40 living with their parents is that they lack the money to move out and establish their own households. Some might be unemployed and looking for work, while some have left the labor force altogether. Other young adults have their own children and live with parents out of a need for child care and support.

MagnifyMoney wanted to find out where U.S. adults are most likely to still be living with their parents, and what factors could be holding them back from leaving the nest.

We surveyed the 50 largest metros in America to identify the largest portion of adults ages 25 to 40 living with their parents along with some other statistics about them. We excluded people in this age group who identified themselves as active students.

Key findings

  • In Riverside, Calif., 28% of adults ages 25 to 40 live with their parents, earning this city the No. 1 spot on our list. High unemployment among these young adults – and for the metro, more generally – appears to be a leading factor.
  • Young adults in Miami, Los Angeles and New York follow, with more than 1 in 4 residents ages 25 to 40 living in their parents’ home.
  • Minneapolis stands at the other end of the spectrum, with fewer than 12% of young adults in this age range living with their parents.
  • Seattle is another city with just under 12% of young adults (ages 25 to 40) living under their parents’ roofs. Then there’s a four-way tie for third place among cities where adults are least likely to live with parents: Denver, Indianapolis, Kansas City, Mo. and Raleigh, N.C. all have 12.3% of these adults living at home.
  • Across the board, about 1 in 4 adults living with their parents have children of their own in the home.
  • Men between the ages of 25 and 40 are more likely to live with their parents in every metro we reviewed (except Austin, Texas).
  • The average unemployment rate for this age group across the 50 metros is 8.6%. That’s more than twice the national unemployment rate of 4% as of January 2019.
  • Nearly 1 in 5 adults who live at home don’t participate in the labor market at all, on average across the 50 metros.
  • Adding together the unemployed and the people who don’t participate in the labor force, only 72% of these adults are currently working while living with parents.

Understanding the metrics

The list is ranked strictly on the percentage of adults aged 25 to 40 who live with their parents. To inform our findings, we also present the following information for this same population (which did not affect rankings). We excluded anyone from the analysis who was identified as a student.

  • Percentage who have their own children at home.
  • Percentage who are unemployed. This refers to people who want to work but are unable to find work. They are part of the active labor force in their communities.
  • Percentage who don’t participate in the labor force. These are people who don’t work outside of the home and are not seeking to work. This is different from the unemployment rate, and people counted in that rate are not included in this metric. We excluded people who are identified as students from our analysis as well, so these statistics don’t include people not looking for work due to educational pursuits.
  • Breakdown of people who live with their parents by sex.

In the 10 cities with the largest shares of young adults ages 25 to 40 living in their parents’ homes, eight were split between two regions: the South and the Northeast. In the South, more adults live with parents in Miami, San Antonio, New Orleans and Orlando, Fla. The four top cities in the Northeast include New York, Philadelphia, Providence, R.I. and Baltimore.

Here are some other highlights of these 10 cities with the highest portions of adults (ages 25 to 40) living with parents:

  • San Antonio, Orlando and Riverside had the highest rates of parenthood among young adults living with parents, out of the top 10 cities overall. In these cities, nearly three in 10 young adults who live at home with parents also live with a child of their own.
  • Of the top 10 cities where more adults are living with parents, the highest unemployment rates among this cohort are found in New Orleans (11.2%), Riverside (10.8%) and Baltimore (10.6%). In these cities, more than 1 in 10 of these adults living under their parents’ roofs are unemployed and actively seeking work.
  • The cities among the top 10 with the highest rates of nonparticipation in the labor force among adults living with their parents are San Antonio (25.3%), New Orleans (24.1%) and Orlando (19.5%).
  • Across the board, men make up the bigger share of adults who live with their parents, but the difference was more pronounced in some of the top 10 cities. In both Providence and Philadelphia, men make up a larger majority (56.7%) of adults living with parents. New York follows close behind, with a 56.2% male majority of adults living with their parents.

Then there are the cities where fewer adults (ages 25 to 40) are living with their parents, and are more likely to be living on their own. Four of these cities are located in the Midwest: Minneapolis, Indianapolis, Kansas City, Mo. and Columbus, Ohio. The South and West are also well represented in this list. In each region, there are three cities where these adults are less likely to be living in their parents’ homes.

Here is a closer look at other metrics that can inform these top 10 cities and their low rates of adults living with parents:

  • In these 10 cities, adults living with parents were more likely to be parents themselves, compared with the 10 cities where more adults live with parents. In Austin and Denver, 30% of adults living with parents had at least one child of their own living with them.
  • Raleigh and Indianapolis had the highest unemployment rates among these adults of the top 10 cities, at right around 12%. Austin and Kansas City had the lowest rates of unemployment among adults living with parents, at 5.4% and 5.6% respectively.
  • Among these 10 cities, Austin did have the highest share of adults living at home who aren’t participating in the labor force, however, at 22.5%. Portland and Indianapolis also had higher rates of labor nonparticipation among these adults living in parents’ homes, at just over 20%.
  • Minneapolis and Portland have the most uneven breakdown by sex of adults living with parents. Austin, on the other hand, is the only city we surveyed where a majority of adults living with parents are women, at 51.1%.

Full rankings

Our rankings surveyed the 50 most populous metro areas in the U.S. to find the proportion of adults (ages 25 to 40) living with their parents for each. See the table below for the full rankings for all 50 cities, along with key statistics on local adults who live with their parents.

How to prepare your money to move out on your own

Most adults living with parents hope to eventually move out on their own. If that’s you, careful planning can help you prep your finances, pay down debt and save enough money to make this happen sooner.

Here are some specific steps to take while you’re living with your parents to get financially healthy and launch your solo stage of life.

Make a plan to deal with debt

If you’re hoping to move out, you’ll have to deal with your debt first. The monthly payments on debt can be a burden that makes it harder to afford to live on your own.

Living at home is the perfect time to make extra payments toward debt and pay off some balances. Target your high-interest debt first, such as credit cards — these balances will cost you the most to carry from month to month.

Paying down debt is a great start, but your payoff date might still be years away while you’re hoping to move out much sooner. In these cases, you could refinance or consolidate debt to adjust your monthly payments or even secure a lower interest rate. Here are some options worth looking into:

Seek out a better job or side hustle

Unemployment, underemployment or exiting the labor force are among the biggest reasons adults live with their parents — and can’t move out. The only way to find your next gig is to apply, so keep your hopes and efforts up.

Applying for jobs can be tough, however, especially if you’re met with rejections. If your efforts seem to be going nowhere, see what you can do to make yourself a more attractive job candidate. Read up on job-seeking advice and ask for feedback from mentors or potential employers to improve your resume and prep for your next opportunity.

On top of actively seeking new or better employment, you can also consider picking up a side hustle or part-time job. This can help you develop new skills, build a portfolio and avoid a gap in employment — all while earning additional income and keeping money coming in.

Take advantage of low-cost living with parents

Living with parents isn’t always easy, but it comes with one major perk: low costs. Most adults who live with parents do so to benefit from either sharing living costs or skipping typical bills such as rent, groceries or utilities.

This lack of costs leaves more of your money available to tackle other financial goals. You can start building your move-out fund, saving for expenses like a deposit on an apartment and purchasing furnishings for your own place. Having an emergency fund in place before moving out can also be a wise move. Or you can use savings from living at home to pay down student loans or other debt.

Whatever your goal, set your sights and start using your freed-up funds to work toward it.

Methodology

Analysts used 2017 American Community Census microdata hosted on IPUMS to calculate the following percentages for people aged 25 to 40 and who did not identify as students: 1) Percentage who live in the same household with at least one of their parents. For those who both do and do not live with their parents, we separately calculated: 1) Percentage who live with their own children, 2) percentage who are unemployed, 3) percentage who are not part of the labor force, 4) percentage who are men, 5) percentage who are women.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Life Events

Places Where Americans Live the Most Balanced Lifestyles

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

U.S. Household Incomes
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As Americans, we’re often focused on status markers, such as the amount of money we make. But research indicates that the time we spend with people we care about, good health and income equality are some of biggest factors that lead to happiness. Feeling fulfilled is about so much more than how much we earn. It comes down to what we have to do to earn it, what we get in exchange for it and whether we have the time and health to enjoy our friends and family.

In other words, a balanced life.

To figure out where people are most likely to find that kind of balance, we compared seven measures in the 50 biggest metropolitan areas of the U.S.

We looked at the following (full methodology below):

  • Average commute times
  • How much of their income residents spend on housing
  • How many hours people work compared with how much they earn
  • Local income inequality
  • How many people are in very good or excellent health
  • Whether they get enough sleep at night
  • How local prices for typical consumer goods and services (excluding housing) compare with the national average

Below are the places that ranked highest — and lowest — for 2019.

Key takeaways

  • Minneapolis takes the top spot for places with the most balanced lifestyles with a final score of 77.4, mainly due to good health and high incomes combined with a moderate cost of living.
  • Kansas City, Mo., and Salt Lake City came in closely behind, with final scores of 76.0 and 75.7, respectively
  • Miami ranked as the metro with the worst lifestyle balance, with a final score of 24.0. High economic inequality, expensive housing and lower incomes are the primary hindrances to the balance.
  • New York and Riverside, Calif., filled out the bottom three, with final scores of 25.4 and 26.0, respectively. Last year, Riverside was included in the Los Angeles combined statistical area.
  • Midwesterners might find it easier to lead balanced lives. Five of the top 11 cities in this study are in this region: Minneapolis, Kansas City, Cincinnati, St. Louis and Columbus, Ohio.
  • The high costs of living in coastal cities can make it trickier to find the right balance between quality of life and financial demands. Of the 10 cities with the least balanced lifestyles, nine are on or near the coastline.

Metros that offer a balanced lifestyle

The map above includes the 11 major cities (with the last two tied) that provide the most balance to residents — where it’s less of a grind to just make a living:

1. Minneapolis
2. Kansas City, Mo.
3. Salt Lake City
4. Cincinnati
5. Raleigh, N.C.
6. St. Louis
7. Portland, Ore.
8. Denver
9. Hartford, Conn.
10. Virginia Beach, Va. (tied)
10. Columbus, Ohio (tied)

If you’re in search of a more balanced lifestyle, you might want to consider a move to the Midwest. Five of the top cities are located here.

Overall, these cities score best in some categories but not others. They score well by having low income equality, low housing costs relative to income, better health outcomes and shorter commutes. Here’s a look at which cities stand out for different factors:

  • Minneapolis was No. 1 overall, and the second-highest city for percentage of residents in very good or excellent health at 57.1%, second only to Washington, D.C. Denver was the other top city that ranked well for residents’ health outcomes, with 56.6% in optimal health.
  • Cincinnati offers the lowest relative housing costs of the top-ranked cities, with a typical resident spending 19.3% of income on housing costs. Kansas City and St. Louis also score well here, with housing costs at 19.5% of income.
  • Cincinnati’s low costs don’t stop at housing. It has the lowest prices on goods and services of any major city, with costs 7.3% below the national average. St. Louis had the next lowest costs, with prices 7.2% below national levels.
  • Hartford. (No. 9) is the city ranked in the top 11 with the highest hourly wages — on average, workers here can earn $50,000 a year with just 24.9 hours per week. Minneapolis (No. 1) also scores above-average here, with a typical worker working 26.8 hours in a week to earn a $50,000 annual income.
  • Denver is where residents are the most well-rested, as only 26.9% of residents say they get fewer than seven hours of sleep a night. Cincinnati and Raleigh locals are also among the U.S. city dwellers more likely to be getting sufficient sleep.
  • Salt Lake City (No. 3) and Kansas City (No. 2) have the shortest commute times of the top group, at 22.4 minutes and 23 minutes, respectively.

10 worst metros for a balanced lifestyle

There are also the cities where high costs can make it hard to get ahead, block locals’ efforts to build up savings and add up to more stress and a bigger mental labor load. The table above shows the 10 cities that scored the worst for lifestyle balance.

One commonality stands out: Many of these are coastal cities. From Miami and Tampa in Florida to San Francisco and Los Angeles in California, down to Houston and New Orleans in the Gulf Coast, these cities prove that it takes more than proximity to a beach.

The 10 worst cities scored poorly across several ranking factors: housing costs relative to income, prices on goods and services, income inequality and commute times. Some of these cities do manage to pull ahead with higher wages — meaning a typical worker can earn $50,000 per year in fewer hours.

Here are some key points on the worst cities:

  • Miami, Los Angeles and Riverside earned their spots thanks to high housing costs. Miami has the highest housing prices relative to local incomes, with these living costs eating up 28.8% of earnings. But Los Angeles is right behind it at 28.7%, followed by Riverside with 27.0%.
  • New York City is ranked second worst for a reason. Of all the 50 major metropolitan areas we studied, the Big Apple has the highest costs on goods and services at 12.9% higher than the national average. It also has the worst commutes and least favorable score for income inequality.
  • The worst cities had some of the worst health outcomes, too. Houston, in particular, has the fewest proportion of residents reporting very good or excellent health — just 39.2%.
  • Some of the worst cities have high costs but also offer higher incomes. That put a few of them among the cities where it takes fewer weekly hours to earn $50,000 per year: San Francisco, New York and Philadelphia. In San Francisco, earning that amount can be done in just 20.5 work hours.
  • Philadelphia and Memphis, Tenn., are among the cities where people are less likely to get enough sleep. In both cities, around 41% of locals get less than seven hours of sleep each night.

How the 50 biggest U.S. cities stack up for balanced living

Our rankings show how local labor markets, pay, costs and other living conditions can add up to have big effects on residents’ lifestyles.

In more balanced cities, locals can more easily cover bills without overworking and economic opportunity is more accessible, which helps create positive health outcomes. But in cities that rank poorly for balance, residents have to make significant personal sacrifices: working more, accepting longer commutes or spending more of their income on housing.

Here are the full rankings:

4 tips to balanced finances and living — in any city

Leading a balanced life is easier when you’re managing your money well and your finances are functioning as they should be. No matter where you live, you can find ways to build a better financial foundation to lead a balanced life. Here are some suggestions to get you started.

Keep recurring living costs affordable. While you can’t decide what your local housing market and rent costs are doing, you do have some control over how they affect your budget. When choosing a home, for example, prioritize affordability over other factors.

Look for other major costs to cut out, too. Can you get a cheaper phone plan that still meets your needs? Would it be cheaper to use public transit than continue to keep and make payments on a car? Lowering these kinds of costs will help you save now, and in the months going forward.

Check your discretionary spending. On top of inspecting monthly costs, track your spending day to day, too. Pay attention to where you tend to spend a lot on “wants.” These could include categories like dining out, purchases on alcohol or tobacco, entertainment and apparel and accessories.

These optional expenses could be opportunities to rein in costs a little to build more of a buffer into your budget. You can cancel subscription services you rarely use, whether it’s video streaming or a neglected gym membership. Cutting back on eating out just once a week could be a fairly painless way to free up $50 or more per month, for example. Instead of heading to a bar or club and paying upward of $10 per drink, you might host a bring-your-own-booze get-together instead.

Limit and pay down debt. Paying down debt can be a burden on your budget and your stress levels. It’s wise to avoid debt whenever possible and prevent taking out new loans or racking up balances on credit cards.

Already have debt? Focus on paying it down. The most effective way to pay debt off quickly is by making extra payments above the monthly minimum. You can also look for ways to lower your debt costs, such as refinancing or consolidating debt. If you consolidate credit card balances, for instance, you can combine them into a single loan that could have a lower interest rate. You’ll also have the chance to choose a different loan term that could lower monthly payments to keep them more affordable.

If you’re truly struggling with debt and don’t see a way you can reasonably afford to pay it back, it can be hard to find a way out. Consider working with debt relief programs that can help you manage debt more effectively and lift some of the burden.

Focus on more than financial health. Working toward raises and making progress on money goals can be worthwhile investments in your financial future. But these objectives don’t have to come at the expense of your health and well-being.

Building strong relationships and a sense of community can help you establish a life of connection and meaning, for example. And investing in physical health through sufficient sleep, nutritious eating and an active lifestyle will help you feel better now and is a worthy investment in your long-term wellness.

Living a balanced life, after all, is about giving appropriate attention and resources to important areas of our lives. Balance efforts at work and in your finances with care for your physical, mental, emotional and social health.

Methodology

The top 50 metropolitan statistical areas (“MSAs”) are ranked on a 100-point scale on the following seven measures:

  1. Average commute time, as reported in the 2017 American Community Survey (“ACS”) from the U.S. Census.
  2. Percentage of income spent on housing, calculated as (the median monthly housing cost) / (median household income / 12 months), as reported in the 2017 ACS.
  3. The average number of hours per week a person would have to work to earn $50,000 a year, calculated as (average earnings for full-time workers) / (average hours worked per week), as reported in the 2017 ACS.
  4. Gini coefficient to represent income inequality, as reported in the 2017 ACS.
  5. Goods and service costs, relative to the national average, calculated as a simple average of Price Index for Goods and Price Index for Other, as reported by the Bureau of Economic Analysis in the “Real Personal Income for States and Metropolitan Areas, 2016” release.
  6. Share of the population in very good health, calculated as (percentage of the population in very good health) + (percentage of the population in excellent health), as reported in the 500 Cities Project (2017) from The Centers for Disease Control and Prevention (“CDC”). Data was missing for the following MSAs, and so the state averages were used: Raleigh, N.C.; Las Vegas; Dallas; Detroit; Seattle; San Diego; San Jose, Calif.; Boston; Philadelphia; San Francisco; and New York.
  7. Share of the population that gets fewer than seven hours of sleep a night, as reported by the CDC.

The sum of all ranks was then divided by seven, for a maximum possible score of 100 and the lowest possible score of zero.

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Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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