Yahoo Finance 8 Worst Cities for Gen Z To Move While Trying To Build Up Their Savings
For young Americans who have recently graduated or will soon graduate, the idea of moving out of their parent’s houses and achieving financial independence can be both exciting and daunting.
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Unlike previous generations with more established financial foundations, Gen Z faces unique challenges as they enter the workforce. While it is common knowledge that cities like New York, Los Angeles and San Francisco are expensive, there are lesser-known urban areas where Gen Zers should exercise caution if they are looking to build their savings.
Check out these eight cities that feature high living costs that can put a strain on Gen Z’s budget.
Honolulu, Hawaii
Average one-bedroom rent in Honolulu: $2,344
Living in Hawaii is very attractive for young people due to its laid-back style and picturesque landscape. However, it’s not an ideal financial move.
“Honolulu in Hawaii is considered the worst city for Gen Z when it comes to saving money,” said Adam Chahl, a Vancouver Real Estate Agent. “The high cost of rent and groceries make it difficult for young adults to save up, despite the city having a high median income for this age group.”
San Jose, California
Average one-bedroom rent in San Jose: $2,098
Jan Jose, situated at the heart of Silicon Valley’s tech innovation, may seem promising, but the presence of big tech companies has led to exorbitantly high costs of living.
“As I have seen in my own experience, San Jose is one of the worst cities for Gen Z to move to if they are trying to save money,” said Alex Locklear, realtor and founder of NC Cash Homebuyers.
“The cost of living in San Jose is extremely high compared to the national average. It’s nearly impossible for someone just starting out in their career to save money while living here. With the median home price being over $1 million and rent prices soaring, it’s no surprise that Gen Z would struggle to build up their savings in this city.”
Read: The Average American Spends This Much on Rent — See How You Stack Up
Raleigh, North Carolina
Average one-bedroom rent in Raleigh: $1,307
While Raleigh’s location inside the research triangle offers countless career opportunities, these opportunities come alongside higher pay and thus, higher expenses.
“Despite having a lower cost of living compared to other cities, Raleigh-Durham’s housing market has become increasingly competitive and expensive,” Locklear said. “In fact, the median home price in Raleigh is over $300,000 while the average rent for a one-bedroom apartment is around $1,300. You can also expect to pay higher taxes and utility costs in this area.”
Seattle, Washington
Average one-bedroom rent in Seattle: $1,648
Seattle, despite its gloomy weather, is a popular choice for Gen Zers. Unfortunately, it’s not very budget-friendly.
“Seattle often surprises individuals with its high cost of living,” said Ritika Asrani, founder and head broker at St. Martin Real Estate.
“The booming tech industry has driven up housing prices, making it difficult for young professionals to find affordable housing. Despite the competitive salaries in the tech sector, the expenses associated with housing, transportation and other living costs can eat into savings.”
Asrani suggests exploring suburbs or neighborhoods outside the city center for more affordable housing options as well as understanding the local transportation system to reduce commuting costs.
Austin, Texas
Average one-bedroom rent in Austin, Texas: $1,425
Austin’s appeal to the younger generation lies in its vibrant culture and tax benefits due to the absence of personal income tax.
“However, the city’s popularity has contributed to rising housing prices,” Asrani said. “The cost of living in Austin has been on the upswing, and the demand for housing often outpaces the supply, creating challenges for those looking to save money.”
Fairfax, Virginia
Average one-bedroom rent in Fairfax: $1,762
For Gen Zers looking to experience four seasons, Fairfax likely seems like an idyllic city to settle in. However, while this city’s proximity and job opportunities are vast, the costs of living here are not.
Mitchell G. David, real estate agent and founder of Beach Life Premier Team, said, “Fairfax’s proximity to federal corporations, Capital Washington, and renowned colleges (Virginia Tech, George Mason, etc.) made the city attractive to young professionals. However, it is among the 1% of costliest cities in the world, where $4,754 per month covers the basic necessities and a modest lifestyle.”
Wilmington, Delaware
Average one-bedroom rent in Wilmington: $1,135
Wilmington, known for banking and innovation, appeals to young Americans seeking professional opportunities. However, its high cost of living can delay savings growth.
“Wilmington has zero sales tax,” David said. “Yet, living there can break the bank due to the cost of transportation (13% higher than the national average), goods and services (6% higher than the national average) and housing (10% higher than the US average). Also, modest companies (less than 50 employees) don’t offer insurance for new employees, which can be a money pitfall as the city’s healthcare cost is 16% higher than the US average.”
Chicago, Illinois
Average one-bedroom rent inSan Jose: $1,364
For Gen Zers attracted to big city life, Chicago may not be the best choice. High housing and transportation costs are likely to leave little room in the budget for saving.
“First, renting in Chicago, especially for Gen Z, who might be entering the rental market for the first time or seeking shared living arrangements, can be a bit of a maze,” said, Bailey Moran, COO of Austin TX Realty, a boutique real estate brokerage serving a greater Austin Metro.
“For downtown Chicago (Prime Locations), studio apartments can cost $1,200 to $1,800 monthly. Transportation also can be a factor. Unlike other cities where public transport is an economical choice, in Chicago, owning a car becomes necessary, leading to higher fuel, maintenance and parking expenses.
One-bedroom rent for each city has been compiled from Apartment List.
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This article originally appeared on GOBankingRates.com: 8 Worst Cities for Gen Z To Move While Trying To Build Up Their Savings
