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The Best Cities to Be Young and Broke

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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When you’re young and just starting out your career, choosing where to live can truly make or break your finances.

Young people today already have to manage a host of financial stressors, like student loan debt and rising housing costs, with the usual demands of early adulthood, like starting their first retirement fund and learning to balance work and play.

When you couple these competing responsibilities with a location that only contributes more financial obstacles, you could be setting yourself up for failure.

On the other hand, some cities are affordable enough to give even the lowest earners a fighting chance at a decent quality of life.

With this in mind, MagnifyMoney decided to take a look at some of the biggest cities in the U.S. and determine which cities are the best places to be young and broke today.

We started by analyzing more than 100 U.S. cities to find the most favorable and affordable places for people between the ages of 18 and 24. Among other data points, we not only looked at obvious expenses like housing and food, but also unemployment rates, income taxes and the rate of young adults who are living in poverty.

Key findings: The top 10 cities for the young and broke

Of the 10 best places to make the most of a tight budget, five were in the Midwest —  Madison, Wis., Grand Rapids, Mich., and Dayton, Ohio.

Although Midwestern cities did not score highest on all of the features analyzed, when they were put up against what young adults said matters to them the most, low rents and short commute times pushed these places ahead.

“It’s not that these cities necessarily scored the highest on all the features we analyzed, but when we weighted those features according to what the young adults we surveyed said mattered the most, the lower-than-typical rents and price combined with modest commute times to bring Midwestern cities to the top of the list,” said MagnifyMoney Senior Research Analyst Kali McFadden.

#1 Madison, Wis.

Overall score: 73.2/100

It stands to reason that a renowned university town would be a draw for the young and broke, but Madison stands apart, thanks to a relatively low cost of living (median rent is $950, and goods run almost 5% cheaper than the rest of the country) and a fairly robust public transportation system.

About 4% of the population use public transportation, which may not seem like a lot, but that’s enough to rank 21 among the cities reviewed. Moreover, the average commute is just over 21 minutes.

Only two other cities (Provo, Utah and Springfield, Mass.) have a higher proportion of young adults, yet no other big city has more young people who either attended or graduated from college (70%), and the city ranks in the top 10 for lowest youth unemployment.

The bad news is that there are more young adults living in poverty in Madison than other city analyzed, but this may have to do with how college students and their families file their taxes.  When considering what city features young people in our survey said they care most about, Madison still places 1st, with an overall score of 73.2.

#2 Grand Rapids, Mich.

Overall score: 72.4/100

With an overall score of 72.4, Grand Rapids misses 1st place by a hair. Grand Rapids shines in many of the same ways that Madison does, such as the price of goods, relative to the rest of the country (almost 5% less), average commute time (just over 21 minutes) and low youth unemployment rates (6.7%).

Grand Rapids is also full of young, educated citizens, with over 10% of the population between the ages of 18 and 24, and 59% of those young people either college graduates or on their way.  Most young people are local, with fewer than 5% newly arrived from out of state.

Fewer than 2% of people use public transportation, which is pretty middle-of-the-pack, and statewide and income taxes are lower than most, ranking 42nd and 44th out of the 107 big cities.  Grand Rapids exceeds Madison in a few areas, such as median rent at $812, fewer young people in poverty and over twice as many pizza joints per capita.

The other Midwest cities that made the top ten were Des Moines, Iowa (6) and Akron, Ohio (8).

#3 Dayton, Ohio

Overall score: 72.2/100

It turns out that Ohio is a great place to be young and broke. Statewide, income and sales taxes are low, ranking 23rd and 33rd among the 107 big cities we reviewed, and Dayton’s modest median rent ($761) and low cost of goods (over 4% cheaper than the national average) add to Dayton’s affordability.

Of the 10% of Dayton’s young population who are between the ages of 18 and 24, 63% have or are working toward an undergraduate degree (13th highest).  Average commute times also compare favorably with the rest of the nation, coming in at just under 23 minutes.  Dayton does fall short in the areas of youth unemployment (11%) and youth living in poverty, ranking in the bottom half of all cities we reviewed.

#4 Syracuse, N.Y.

Overall score: 71.4/100

Our first city outside of the Midwest is another university town in the northern reaches. With a score of 71.4, Syracuse compares very favorably with the rest of the country in average commute times (21 minutes), statewide sales tax (4th lowest), and percentage of the population between the ages of 18 and 24 (11%).

As one would expect for a college town, a lot of young adults are newly arrived from out of state or country (11%), and Syracuse ranks 11 out of 107 for number of young people who attend or have graduated from college (64%).

Rents are low at $790, as is youth unemployment (8%), but as seen with the other top cities on our list, a lot of young people live below the poverty line (26%).

#5 Durham, N.C.

Overall score: 70.9/100

Durham-Chapel Hill is home to two large schools, Duke University and University of North Carolina, which helps explain why over 11% of the population is between the ages of 18 and 24.

It also helps to explain why 68% of those young adults either have or are pursuing a college degree (the 3rd largest proportion in our study), and why 11% of them arrived in the last year from another state or country. Durham is also relatively affordable, with a middle-of-the-pack median rent of $947 and prices almost 4.5% lower than the national average.

Commute times are also middle of the pack at under 25 minutes, but almost 5% of the population use public transportation.  Again, 5% may not sound like a lot, but it’s actually the 15th highest among cities with populations over half a million. Some 30% of young people live below the poverty line, although that may be because so many college students don’t have much, if any, income.

It’s not all roses in the Midwest

Ironically, the best five cities for the young and broke also have a high rate of young adults living in poverty, comparatively. As we said, the reason these cities have an edge is that they tended to rank well in the factors that young people said mattered most to them, like rent costs and commute times.

Top-ranked Madison, Wis., for example, also boasts the highest rate of young adults living in poverty in Madison than any other city analyzed. Similarly, in Durham, N.C (5), 30% of young people live below the poverty line.

However, this doesn’t necessarily mean these cities are rife with homeless young adults. One explanation could be that these cities are home to several colleges and with a high volume of college students in the population, it’s easy to see how it could appear that young adults aren’t earning much.

“These two things are likely connected, as college students often have little or no income, but that doesn’t mean they’re not being supported through family assistance or loans,” McFadden said.

On the plus side, college towns are affordable

The list also boasts a number of college towns like the aforementioned Madison, Wis. (1) and Grand Rapids, Mich. (2). Rounding out the top five were college towns outside of the Midwest, Syracuse, N.Y. (4) and Durham, N.C. (5). The results suggest college towns may be more affordable destinations for young people who want to keep their expenses relatively low.

The 10 Worst Cities to Be Young and Broke

Methodology: What do young people want in a city?

To find city features most appealing to young people without a ton of disposable income, MagnifyMoney asked 100 young people (ages 18-24) to rank the importance of 12 city features that factor into quality of life for the young and broke. The responses were weighted according to which were the most important to the youth surveyed.

Here are the most important city features, according to this survey:

  1. Median rent
  2. Price of goods compared with the national average
  3. Average commute times
  4. Unemployment rate for young people
  5. Statewide income tax rates
  6. Statewide sales tax (we note that local sales tax may be higher)
  7. Percentage of the young adult population who live in poverty, by federal standards
  8. Percentage of the population between the ages of 18 and 24
  9. Percentage of young adults who have either completed or are pursuing a college degree
  10. Percentage of the population who use public transportation
  11. Percentage of young adults who moved from another state or another country in the previous year, and
  12. Availability of cheap food, as expressed in the number of pizza parlors per 100,000 residents.

Once we know what to look for, our team weighted the features of 107 metro areas with populations over 500,000 against what young people said they wanted most in the city.

Based on this information, the cities were then scored, for a highest potential score of 100 and a lowest potential score of zero to find the best places for broke young adults.

References

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.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]

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Study: The Best U.S. Cities for Working from Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Working from home has never been easier. Thanks to advances in technology, many professionals can plow through their to-do lists from the comfort of their couch. However, some cities are better for remote work than others.

Cities that are more appealing to telecommuters have higher earning power for the remote workers who live there and more remote work opportunities. Additionally, cities with longer commute times also make it more appealing for residents to choose to work from home.

To determine the best cities for working from home, MagnifyMoney combed through the Census Bureau’s 2018 1-Year American Community Survey. We examined the 100 largest U.S. cities by the number of workers, classifying them by metrics related to how many people work from home, their earning power and their cost of living.

Key findings

  • Gilbert, Ariz. is rated the best place to work from home, due to a sharp rise in the number of people working from home, which indicates more remote work opportunities, as well as the fact that remote workers there make $1.32 for every dollar earned by the average worker.
  • The second best place to work from home is Atlanta, thanks to factors like a rise in people working from home from 2017 to 2018 and good pay for remote workers. Additionally, local housing costs in Atlanta were equal to just 27% of earnings for the average person who works from home.
  • Aurora, Colo. comes in third, with residents who work remotely skipping out on the 30-minute average daily commute there.
  • The worst city to work from home was Toledo, Ohio, which had a low and stagnant number of people working from home, indicating few remote work opportunities. Those who do work from home in Toledo generally earned less in comparison to average earnings.
  • The second worst city to work from home was El Paso, Texas, followed by Greensboro, N.C.
  • On average, across the 100 cities analyzed, working from home tended to pay better than not working from home.
  • Overall, the number of people working from home is fairly flat, suggesting that the so-called “telecommuting revolution” has yet to come to fruition.
  • Long commutes did not necessarily translate to more people working from home. While New York and New Jersey had the longest average commutes, they did not see much of an increase in the number of people working from home.

Best cities for working from home

Topping our study’s ranking of the best cities to work from home is Gilbert, Ariz. Gilbert, a suburb located southeast of Phoenix, measures just over 72 square miles and has a population of more than 230,000.

Our study found that the average person working from home in Gilbert makes $1.32 for every dollar the average person makes, earning it a tie for the 20th spot regarding that metric. Gilbert also ranked high for two metrics measuring the city’s overall work-from-home climate. It ranked fourth for its share of remote workers, with 4.90% of residents working from home, and sixth for the percent change in the number of people working from home from 2017 to 2018, a 1.20% year-over-year increase. Additionally, the average commute time of a typical worker in Gilbert is 28 minutes, earning Gilbert the 27th spot for that metric as telecommuters are saving nearly half an hour each way.

All of these metrics contributed to Gilbert’s overall top ranking, making it a great option for telecommuters looking for a balanced lifestyle of good pay, a remote work-friendly culture and a decent chunk of time saved from commuting.

Atlanta snags the spot for the second best city to work from home, thanks to the high earning power of remote workers and a culture friendly to telecommuting. Atlanta has a high work-from-home rate, with 4.50% of people working from home, earning it a sixth-place ranking for that metric. Remote workers in Atlanta make $1.13 for every dollar the average worker pulls in, and housing costs accounted for just 27% of a remote worker’s earnings, landing it the 22nd spot for that metric.

Rounding out the top three for our study on the best cities to work from home is Aurora, Colo. Aurora’s rankings were boosted by the fact that remote workers in Aurora make $1.41 for every dollar that the average person makes — earning the city the 11th spot for that metric. The city also boasts 3.50% of people working from home, which landed it in 19th spot for that metric. Additionally, workers in Aurora had an average commute time of 30 minutes, which means, conversely, remote workers get to skip out on a half hour long-commute, earning the city the 18th spot for the commute time metric.

Overall, the best state to work remotely seems to be Arizona — three cities, all Phoenix suburbs, cracked our study’s top 10 best cities to work from home ranking: Gilbert (first), Chandler (seventh) and Scottsdale (tenth). Another state with a strong presence in our study’s top 10 best cities to work from home is Colorado, with Aurora ranking second and Denver ranking sixth.

Worst cities for working from home

The U.S. city falling to the bottom of our study’s ranking — making it the worst city to work from home — is Toledo, Ohio. Located in the northwest region of Ohio, Toledo has a population of around 276,000.

Remote workers in Toledo pulled in far less than the average worker, earning just $0.58 for every $1 earned by an average worker and resulting in the city ranking 99th for that metric. Additionally, remote workers in Toledo spent an average of 51% of their earnings on housing, underscoring remote workers’ overall low earning power. Toledo also had a staggeringly low percentage of residents working remotely — 0.90% — which indicates the poor overall culture of remote work and opportunity in the city.

The second worst city to work from home, according to our study, is El Paso, Texas. Remote workers in El Paso also had dismal earning power, with people who work from home making just $0.81 for every dollar earned by the average worker, and housing costs accounting for 45% of remote workers’ earnings. Like Toledo, El Paso also had a relatively low percentage of remote workers overall, with 1.60% of people working from home, placing the city 87th for that metric.

Meanwhile, our study found that Greenboro, N.C., is the third worst city to work from home. Greensboro ranked last for the metric measuring the growth in the number of people working from home, with 1.90% fewer people working remotely in 2018 compared to 2017, indicating a possible decline in remote work opportunity there. Remote workers also weren’t saving a particularly significant amount of time by telecommuting, with the average commute time for residents in Greensboro being just 21 minutes.

Overall, our study found that there are bad cities for working from home nationwide, from the Northeast all the way to the West Coast.

What happened to the “telecommuting revolution”?

Roughly a decade ago, as technology became more advanced and workforces became increasingly mobile, there were predictions of a “telecommuting revolution” in which more and more employees would begin working remotely.

Indeed, a recent study from FlexJobs found that between 2005 and 2017, remote work has grown 159%. However, this massive explosion in growth in the last decade and a half slowed to just 7.9% between 2016 to 2017 — evidence that the movement is losing steam.

Our study also found a fairly stagnant remote workforce in the 100 most populated U.S. cities from 2017 to 2018. Even the city that ranked first for the metric measuring the growth of the number of people working from home from 2017 to 2018 — Irvine, California — had just a 2.40% increase in the number of telecommuters. Additionally, our study revealed a slew of cities in which there were a smaller share of remote workers in 2018 than there were in 2017, including Washington D.C., Orlando and St. Louis.

While the number of remote workers might not be completely stagnant, these are certainly signs that the telecommuting movement might be slowing down. So, what’s to blame for the seemingly slowing growth of the “telecommuting revolution”? One explanation might be linked to perceived worker productivity. In 2013, for example, Yahoo yanked its employees’ remote privileges and shortly after cited increased levels of productivity and employee engagement.

Additionally, a 2018 survey from Randstad USA found that employees might not be buying into the idea either. While 82% of workers said being able to work from home helps them maintain their work-life balance, 62% said they still prefer working in the office, a number that was even higher among younger generations.

Advantages and disadvantages of working from home

As is the case with clocking your 9-to-5 hours in a cubicle, there are both advantages and disadvantages to working from the comfort of your couch.

Advantages of working from home

  • Potentially higher pay: Our survey found that in many cities, remote workers raked in more money than non-remote workers. For example, in Norfolk, Va., the average remote worker made $1.68 for every dollar earned by the average worker. One reason for this could be that, according to the BLS, the more popular occupations for remote work include jobs in management, business and finance, all of which tend to be higher-paying.
  • Money saved on transportation: The cost of commuting is not something to overlook. Depending on the state in which you live, you could spend between $2,000 to $5,000 a year on commuting costs. Working from home enables you to save thousands of dollars a year.
  • Money saved on childcare: One of the biggest incentives for working from home is the flexibility it allows — especially for parents with kids to care for. For working parents, the cost of childcare can add up to hundreds of dollars a week. If a parent works from home, they might be able to avoid paying for a daycare service or nanny.

Learn how you can maximize your savings with the best online savings account offers. 

Disadvantages of working from home

  • Strain on relationships with colleagues: Working from home could have a negative effect on your relationships with your colleagues. At least one study has found that remote workers were more likely to report that their co-workers treat them poorly and exclude them.
  • Lack of work-life balance: When your home doubles as your workspace, it can be difficult to unplug. Indeed, one survey from Remote.co found that unplugging after work hours is the biggest challenge among telecommuters. Achieving a healthy work-life balance when you work from home can certainly be a challenging obstacle to overcome.

Methodology

For our study, we looked at data from the 2018 Census Bureau’s 1-Year American Community Survey. Metrics analyzed included:

  • The percentage of people who work from home.
  • Earnings for people working from home relative to average earnings of local workers.
  • The percentage point change in the share of workers working from home from 2017 to 2018.
  • The percentage point change in earnings for people who work from home from 2017 to 2018.
  • Housing costs as a percentage of income for people working from home.
  • Average commute time.

To create the final rankings, we ranked each city in each metric. Using these rankings, we created a final index based on each city’s average ranking. The city with the best average ranking received the highest score, while the city with the lowest average ranking received the lowest score. The cities were then indexed based on the best possible score.

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.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here

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Survey: 3 in 4 Americans Believe Physical Banks Are Becoming Obsolete

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Thanks to the fintech revolution and ever more sophisticated bank apps, some aspects of banking — like paper checks and statements that come in the mail — seem pretty outdated. For many Amercians, bank branches are also increasingly seen as redundant.

A new survey from MagnifyMoney, a LendingTree company, found that 3 in 4 Americans think that physical bank branches are becoming a thing of the past, and nearly 8 in 10 do all of their banking online or via a mobile app.

Key findings

  • Approximately 3 in 4 of survey respondents say physical bank branches are becoming “a thing of the past.” Unsurprisingly, millennials and Gen Z are most likely to hold that opinion, but the sentiment is also shared by more than two-thirds of baby boomers.
  • More than 1 in 10 Americans with bank accounts didn’t set foot in a bank branch in the last year, and an additional 15% haven’t visited a branch in at least the last six months. Gen Xers are the least likely to have visited a branch in the last year.
  • There’s an app for that… and people are using it. Nearly 8 in 10 conduct all of their banking business online or via a mobile app whenever possible. Still, people still see in-person interactions with their bank as valuable, with almost 50% of respondents saying this is their preferred method of communication with their bank.
  • Credit union account holders visit their bank’s physical location less frequently than those who use a traditional bank, and they’re more likely to prefer online banking.
  • Making a deposit is the most common reason cited by respondents for visiting a bank branch, followed by making a withdrawal.

Americans are visiting bank branches less often

Our survey reveals that trips to the bank are becoming increasingly rare. The survey found that 29% of Americans say they typically only visit bank branches a few times a year, while 14% say they go less than once a year. The survey shows that the most common reason for a respondent’s most recent trip to a physical bank was to make a deposit (39%), followed by making a withdrawal (32%).

Surprisingly, the frequency of trips to physical bank branches doesn’t differ too much among generations. However, younger people were more likely to agree with the statement that physical banks are becoming a thing of the past, including 89% of Gen Zers, but only 68% of baby boomers.

In an era in which finding a date or having pad thai delivered to your doorstep is as easy as a few taps on your phone, it’s not surprising that more people are turning to apps for their banking needs. Our survey found that 78% of Americans say they conduct all of their banking online or through a mobile app, including an eye-popping 87% of millennials. Paradoxically, respondents also indicated that facetime remains important, with nearly half saying that speaking with a bank representative in person is their preferred mode of communication.

How different generations bank

Different generations have different preferences on everything from fashion to food. Their preferred mode of banking varies, too. Unsurprisingly, younger generations — who’ve grown up with technology at the center of their lives — are more likely to use a digital bank for their banking needs.

The survey found 21% of Gen Zers and 18% of millennials have their primary account at an online bank, compared to just 8% of baby boomers. Still, about 51% of Gen Zers and 59% of millennials have their primary accounts at a traditional bank — compared to more than 73% of baby boomers.

Younger generations were also much more likely than older ones to say that they do all of their banking online or via an app — 87% of millennials, compared to 67% of baby boomers.

Digital banking on the rise

As both fintechs and conventional banks invest more in their digital offerings, consumers have fewer reasons to visit a physical bank branch. JP Morgan Chase, for example, offers digital banking services like the ability to directly deposit checks straight from your phone to your accounts, and the option to check your balance and transaction history via text message.

The advantages of online-only banks further erode the draw of brick-and-mortar branches. Digital-only operations like Ally Bank and Chime offer very attractive APYs with no monthly fees, as they are saving money on overhead costs.

Cash management accounts from fintech companies can provide compelling alternatives to traditional bank accounts. For example, SoFi Money holds each customer’s cash in accounts at multiple partner banks. This arrangement means the partner banks provide a combined $1.5 million in FDIC insurance for each SoFi Money customer’s balance.

Other innovative features include Chime’s SpotMe feature, which grants its customers up to $100 if they overdraft their account, and Simple’s built-in budgeting tools, which seamlessly tell you how much money is safe to spend while taking into account your future goals and expenses.

Why use a physical bank branch?

Despite all the bells and whistles made possible by technology, physical bank branches do offer something an app can’t replace: in-person assistance. The value of physical, human contact shouldn’t be underestimated.

Case in point: In October 2019, Chime experienced a service outage, leaving millions of its customers without access to their accounts. With no physical branches, Chime’s customers were cut off from their money.

Our findings underscore the importance of having the option to waltz into a bank and ask for assistance, if need be: Among survey respondents, the number one preferred way to communicate with their bank was in person, beating phone contact and online chat.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 936 Americans with a bank account. The survey was fielded September 11-13, 2019. In the survey, generations are defined as:

  • Millennials are ages 22-38
  • Generation Xers are ages 39-53
  • Baby boomers are ages 54-73

Members of the Silent Generation (ages 74 and older) were also surveyed, and their responses are included within the total percentages among all respondents. However, their responses are excluded from the charts and age breakdowns due to the smaller population size among our survey sample.

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.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here