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Finding a New Job and Rent vs Buy in a New City

By NerdWallet Personal Finance

Dive into the pivotal era of 'The Great Resignation' with the latest episode of NerdWallet's Smart Money Podcast, where Sean Pyles, Liz Weston, Sarah Rathner, and Holden Lewis discuss the complex process of exploring new job opportunities. In an age where employees have the leverage to negotiate and reassess their career paths, listeners will gain insights on the importance of evaluating total compensation, which goes beyond the paycheck to aspects like benefits, work-life balance, and the initiation periods for new roles. Crucial resources for researching and comparing job offers, as well as tactical advice for those pondering a switch amid a labor shortage, are presented to orient listeners on how to tread these changing tides effectively.

Shifting the focus to life's big moves, the podcast also zeroes in on the crucial decision between renting and buying when relocating to a new city. The episode delivers valuable strategies to understand neighborhood dynamics and cultivate a community, stressing the significance of experiencing potential areas first-hand and leveraging online tools to get the lay of the land. Whether you're considering first-time homebuyer programs or deliberating the rent versus ownership dilemma, the team at NerdWallet's Smart Money Podcast equips you with the necessary tools and considerations to make informed choices tailored to your lifestyle and financial wellbeing.

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Finding a New Job and Rent vs Buy in a New City

This is a preview of the Shortform summary of the Oct 11, 2021 episode of the NerdWallet's Smart Money Podcast

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Finding a New Job and Rent vs Buy in a New City

1-Page Summary

The Great Resignation and Deciding if Now is a Good Time to Find a New Job

The Great Resignation has prompted workers to consider new job opportunities. Those contemplating a change must assess their total compensation, which includes benefits beyond salary, such as health insurance and retirement plans. Work-life balance is also part of this total package and contributes to job satisfaction. Researching and comparing potential new job packages is crucial, using resources like salary.com and directly networking. With a labor shortage, employees can negotiate better terms. Understanding waiting periods for benefits at the new job is important and, if possible, should be negotiated.

Finding the Right Neighborhood and City for Your Lifestyle and Needs

Choosing where to live encompasses more than just a home; it's about the right environment. Experts recommend spending time in potential neighborhoods to get a feel for the place beyond internet listings. Online tools like Walk Score can measure walkability and access to local amenities. In moving to a new city, building a community through social activities and local engagement is key. The cost of living differences is also significant. Using cost of living calculators to compare cities, as it affects financial stability, is essential in the decision-making process.

Strategies for Discovering Homeownership Opportunities and Incentives

Discovering homeownership opportunities involves utilizing online resources such as NerdWallet to find first-time homebuyer programs and understanding that incentives often target low to moderate-income earners, but may also be available to those with higher incomes. Renting before buying is recommended to get familiar with different neighborhoods and the housing market. This approach allows time to explore and determine where to live long-term while assessing financial and personal readiness for homeownership.

1-Page Summary

Additional Materials

Clarifications

  • The Great Resignation is a term used to describe the significant number of employees voluntarily leaving their jobs during the COVID-19 pandemic. This trend has been attributed to various factors such as reevaluation of work-life balance, seeking better opportunities, and reassessment of career goals. It has led to a shift in the job market dynamics, with employees having more leverage in negotiating terms with employers. The phenomenon has prompted individuals to consider their overall job satisfaction and explore new career paths.
  • Total compensation beyond salary includes benefits like health insurance, retirement plans, bonuses, and other perks provided by an employer. These additional benefits contribute to the overall value an employee receives from their job. Understanding and evaluating these non-monetary benefits is crucial when assessing the full financial package offered by a potential employer.
  • Negotiating job terms due to a labor shortage involves employees leveraging the current scarcity of workers to seek better compensation, benefits, and working conditions from employers. In a labor shortage scenario, companies may be more willing to negotiate terms to attract and retain talent. This can lead to increased bargaining power for employees seeking new job opportunities or improvements in their current roles. Understanding the dynamics of a labor shortage can empower individuals to advocate for more favorable terms in their employment agreements.
  • Waiting periods for benefits at a new job typically refer to the time an employee must wait before becoming eligible to receive certain benefits offered by the employer, such as health insurance or retirement plans. These waiting periods can vary depending on the company's policies and may range from immediate eligibility to a few months after starting the job. It's essential for employees to understand these waiting periods as they impact when they can start utilizing the benefits provided by the new employer. Negotiating waiting periods can sometimes be possible during the job offer stage.
  • Walk Score is a tool that assesses the walkability of a location by analyzing its proximity to amenities like grocery stores, schools, and parks. It provides a numerical score to indicate how easy it is to accomplish daily errands on foot in a specific neighborhood. The higher the Walk Score, the more walkable the area is, promoting a healthier lifestyle and reducing the need for a car. This tool helps individuals evaluate the convenience and accessibility of a neighborhood for pedestrians.
  • Cost of living calculators are online tools that help individuals compare the expenses associated with living in different cities or regions. They consider factors like housing costs, groceries, transportation, healthcare, and more to provide a comprehensive view of the overall cost of residing in a particular area. These calculators are essential for decision-making processes, especially when considering a move to a new city or region, as they help individuals assess how their current lifestyle and budget align with the economic realities of a potential location. By using cost of living calculators, individuals can make informed choices about where to live based on their financial situation and lifestyle preferences.
  • NerdWallet is a popular personal finance website that offers tools and resources to help users make informed financial decisions, including finding homeownership opportunities. It provides information on first-time homebuyer programs and incentives available to potential homebuyers, catering to a wide range of income levels. NerdWallet's platform simplifies the process of researching and comparing various aspects of homeownership, such as mortgage rates, down payment assistance programs, and home affordability calculators. By utilizing NerdWallet, individuals can access valuable insights and guidance to navigate the complexities of the homebuying process effectively.
  • First-time homebuyer programs targeting low to moderate-income earners are initiatives designed to assist individuals with limited financial resources in purchasing their first home. These programs often offer financial assistance, such as down payment assistance or reduced interest rates, to help lower-income individuals overcome barriers to homeownership. Eligibility criteria for these programs typically consider income levels to ensure that those who may struggle to afford a home without assistance can benefit from the support provided. By focusing on low to moderate-income earners, these programs aim to promote greater access to homeownership and address affordability challenges in the housing market.

Counterarguments

  • While the Great Resignation may encourage job changes, some workers may find stability and growth opportunities in their current positions.
  • Total compensation is important, but personal fulfillment and career aspirations can sometimes outweigh the financial aspects of a job.
  • Work-life balance is subjective, and what contributes to job satisfaction can vary greatly from person to person.
  • Researching and comparing job packages is useful, but information can be outdated or not reflective of specific circumstances within a company.
  • The ability to negotiate better terms can be limited by industry, professional level, and individual negotiation skills.
  • Waiting periods for benefits are often standard practice and may not be as flexible to negotiation as suggested.
  • Spending time in potential neighborhoods is ideal, but not always feasible due to time, distance, or financial constraints.
  • Tools like Walk Score are helpful, but may not capture the nuanced character or future changes of a neighborhood.
  • Building a community is important, but it can be challenging and take considerable time, especially for introverted individuals or those with limited free time.
  • Cost of living calculators provide a general idea, but may not account for all personal expenses or lifestyle choices.
  • Online resources for homeownership can be a starting point, but they may not provide the most comprehensive or localized information.
  • First-time homebuyer programs are beneficial, but navigating the eligibility requirements and application processes can be complex and discouraging.
  • Renting before buying can offer insights into a neighborhood, but it also means temporary living situations and potential moving costs.

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Finding a New Job and Rent vs Buy in a New City

The Great Resignation and Deciding if Now is a Good Time to Find a New Job

The term "Great Resignation" captures the trend of many employees quitting their jobs, with four million Americans leaving in July 2021 alone, according to the Bureau of Labor Statistics. It’s a phenomenon that has many workers wondering if it’s time to seek new opportunities. Before making that leap, it's critical to thoroughly assess total compensation and research potential new opportunities.

Considering total compensation when deciding whether to leave your current job

Before resigning, it's pivotal to think beyond the annual salary. A comprehensive evaluation of the rewards package, including health insurance, cell phone reimbursement, or gym memberships, is necessary. Current benefits need to be valued, understanding what the employer’s contribution entails, and considering how future needs might affect the appreciation of benefits such as infertility coverage or orthodontic care for children.

Consideration should be given to benefits that vest over time, like stock options and 401(k) matches. Workers should be aware that while their own 401(k) contributions belong to them, employer matches might be distributed over time, and leaving prior to certain vesting milestones could result in significant financial loss.

Sean Pyles voices the importance of work-life balance in conjunction with salary and benefits, implicating these as part of the total compensation that factors into job satisfaction.

Researching compensation at new jobs to compare and negotiate

Once the total compensation at a current job is understood, it's essential to compare it to the potential new job's package. Tools and resources such as salary.com, Glassdoor, and Robert Half offer valuable insights on compen ...

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The Great Resignation and Deciding if Now is a Good Time to Find a New Job

Additional Materials

Clarifications

  • The "Great Resignation" is a term used to describe the significant increase in employees voluntarily leaving their jobs. This trend, which gained momentum during the COVID-19 pandemic, has been characterized by a surge in resignations as workers reassess their priorities and seek better opportunities. It reflects a shift in the job market dynamics, with employees feeling more empowered to make career changes and demand better working conditions. The Great Resignation has led to employers needing to adapt their strategies to retain talent and attract new hires in a competitive labor market.
  • Vesting of benefits like stock options and 401(k) matches means that employees gain ownership of these benefits over time. While employees immediately own their contributions to a 401(k) plan, employer matches may have a vesting schedule where ownership accrues gradually. If an employee leaves before reaching certain vesting milestones, they may forfeit a portion of the employer-contributed benefits. Understanding vesting schedules is crucial for employees to maximize their financial gains from these benefits.
  • Negotiating terms like 401(k) participation involves discussing aspects such as when an employee can start contributing to their 401(k) plan, the employer's matching contributions, and the vesting schedule for those contributions. Vesting determines when employees fully own employer-contributed funds in their retirement account. Negotiating these terms can impact an employee's overall compensation package and long-term financial planning.
  • When an employer offers benefits like stock options or 401(k) matches that vest over time, leaving a job before reaching certain milestones can lead to losing out on the full value of those benefits. Vesting milestones are specific points in time when employees become entitled to the full b ...

Counterarguments

  • While the "Great Resignation" indicates a trend of job quitting, it's not universally advisable for everyone to consider leaving their jobs; individual circumstances vary greatly.
  • Total compensation is important, but some individuals may prioritize job satisfaction or career growth over immediate financial benefits.
  • The value of benefits can be subjective; what is crucial for one person may be less important for another, depending on their personal situation and life stage.
  • The assumption that leaving before vesting milestones always results in significant financial loss may not account for the potential gains from new opportunities that outweigh the losses.
  • Work-life balance is indeed important, but some individuals may be willing to sacrifice it temporarily for strategic career moves or financial reasons.
  • Researching compensation at new jobs is useful, but publicly available data may not always be accurate or up-to-date, and individual negotiations can lead to different outcomes.
  • Networking and talking to current or former employees can be insightful, but it may also lead to biased or incomplete views of a company's culture and compensation.
  • The curr ...

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Finding a New Job and Rent vs Buy in a New City

Finding the Right Neighborhood and City for Your Lifestyle and Needs

Selecting the right neighborhood and city to live in is a crucial decision that involves evaluating the community's ambience, amenities, and cost of living. The hosts and guests discuss strategies for identifying the best environment to suit individual preferences and needs.

Getting a "feel" for different neighborhoods by spending time walking around

The hosts stress the significance of acquainting oneself with various neighborhoods before settling down. They suggest that renting for six to twelve months in a new city is vital to truly understanding different areas. They compare the benefits of vacationing or spending long weekends in prospective cities to just researching online. Lewis, for example, speaks about the insights gained by physically driving around neighborhoods that can't be ascertained from an internet listing, such as the topography of an area. Meanwhile, Holden emphasizes taking the time to walk around target neighborhoods to get a firsthand feel that online tools can't provide.

Using online tools like Walk Score to evaluate amenities and walkability

Despite the value of in-person exploration, online tools still play an important role in neighborhood selection. Sarah Rathner recommends using a neighborhood's Walk Score as a starting point to evaluate walkability and access to amenities. Sean Pyles shares his own preference for being within a ten-minute walk of the main community area, highlighting the importance of determining the type of environment you want.

Making friends and building community as an adult in a new city

Transitioning to life in a new city includes cultivating social connections. Rathner proposes using existing connections, like acquaintances, to join plans and meet new people. Pyles shares his experience of making friends through his pet at the dog park and through shared activities, like joining a rugby team. Rathner also encourages participation in solo-friendly activities such as neighborhood book clubs, classes, or volunteering and recounts meeting her husband at an improv comedy class, noting how such settings can foster meaningful connections.

Community involveme ...

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Finding the Right Neighborhood and City for Your Lifestyle and Needs

Additional Materials

Clarifications

  • Walk Score is a tool that assesses the walkability of a neighborhood by measuring its proximity to amenities like grocery stores, restaurants, schools, and parks. It provides a numerical score to indicate how easy it is to accomplish daily errands on foot in a particular area. A higher Walk Score suggests a more walkable neighborhood where residents can easily access essential services without relying heavily on a car. This tool helps individuals evaluate the convenience and lifestyle benefits of living in a specific location based on their preferences for walkability and access to amenities.
  • Joining a rugby team can be a way to make friends through shared physical activity and teamwork. Participating in team sports like rugby often involves regular practices and games, providing opportunities to bond with teammates over a common interest. The camaraderie built on the field can extend off the pitch, leading to friendships beyond the sport itself. Rugby teams often foster a sense of community and belonging, creating a supportive environment for social connections to develop.
  • Cost of living calculators are online tools that help individuals compare the expenses associated with living in different cities. These cal ...

Counterarguments

  • Renting for 6-12 months might not be financially or logistically feasible for everyone, and some may need to rely on shorter visits or virtual tools due to time or budget constraints.
  • Vacationing in a city can offer a skewed perspective of daily life since vacation experiences often differ from the reality of living somewhere full-time.
  • Driving around neighborhoods may not be possible for those without access to a vehicle, and it may not provide insight into public transportation options or pedestrian friendliness.
  • While walking around neighborhoods is valuable, it may not always be safe or practical in all areas, and some neighborhoods may require multiple visits at different times to truly understand the environment.
  • Online tools like Walk Score are useful, but they may not always be accurate or up-to-date, and they can't capture the subjective elements of a neighborhood's character or sense of community.
  • The importance of being within a 10-minute walk of the main community area may not align with everyone's lifestyle or priorities, as some may prefer quieter, more secluded living spaces.
  • Making friends through existing connections assumes that one has such connections in the new city, which may not be the case for all individuals, especially those moving to a completely new environment.
  • Solo-friendly activities are a great way to meet people, but they may not appeal to everyone, and some may find it challenging to engage in s ...

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Finding a New Job and Rent vs Buy in a New City

Strategies for Discovering Homeownership Opportunities and Incentives

Charlie inquires about the best methods for finding housing opportunities and incentives. Various paths can lead to homeownership, with resources and renting playing crucial roles in the journey for first-time buyers.

Utilizing online resources to find first-time homebuyer programs

Holden Lewis informs Charlie that online platforms such as NerdWallet provide valuable information about first-time homebuyer programs organized by state. NerdWallet, notably, has a page dedicated to these programs where users can select their state to view details of programs available to them.

Local incentives may depend on income level and other eligibility factors

Lewis elaborates that the financial incentives for homeownership are particularly accessible for those with low to moderate incomes. He adds, however, that even someone with a higher income and good credit score may find beneficial programs. As an example, Lewis cites Washington State, where first-time homebuyer programs are in place for individuals earning up to $145,000.

Renting first allows time to explore neighborhoods and housing options

Charlie, currently renting, voices apprehension about transitioning to homeownership, indi ...

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Strategies for Discovering Homeownership Opportunities and Incentives

Additional Materials

Clarifications

  • First-time homebuyer programs organized by state are initiatives set up by state governments or organizations to assist individuals in purchasing their first homes. These programs often offer financial assistance, incentives, or resources tailored to help first-time buyers navigate the homebuying process. Each state may have its own specific programs with varying eligibility criteria and benefits to support individuals in achieving homeownership. These programs aim to make homeownership more accessible and affordable for those entering the housing market for the first time.
  • Financial incentives for homeownership are often structured to support individuals with low to moderate incomes, making it easier for them to purchase a home. These incentives can include down payment assistance, reduced interest rates, or grants that help cover closing costs. Eligibility for these programs may vary based on factors like income level, credit score, and the location of the property being purchased. Even individuals with higher incomes and good credit scores may qualify for certain homeownership incentives, depending on the specific programs available in their area.
  • Renting before buying a home allows individuals to experience living in different neighborhoods firsthand, helping them assess factors like safety, conve ...

Counterarguments

  • While online platforms like NerdWallet are useful, they may not always have the most up-to-date or comprehensive information on homebuyer programs, and it's important to cross-reference with local housing authorities or financial advisors.
  • Accessibility of first-time homebuyer programs for low to moderate incomes is a positive, but the complexity of the application process or lack of awareness can still be barriers to entry for eligible individuals.
  • Although programs may benefit higher-income individuals, they might not address the affordability issues faced by those in the lower income brackets, potentially widening the homeownership gap.
  • Renting before buying can be beneficial for exploring neighborhoods, but it also means delaying the investment in homeownership, which could lead to missing out on favorable market conditions or long-term financial benefits of owning a home.
  • The strategy of renting ...

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