One of the most depressing Reddit forums (at least for me) is the /r/povertyfinance and I only visit it about once a quarter to see what is troubling people. A quick glance at many of the headlines will probably depress you so tread cautiously.
After doom scrolling through the doom posts, it suddenly hit me that perhaps a huge problem people have with poverty is the overall cost of living. I know that sounds obvious but how much does anyone really know about their cost of living ecosystem? Do you know if you are in the ideal state for your persona?
Methodology
I spent some time doing web searches and collected data for residential electric rates, water, gasoline, property taxes, sales taxes, income taxes, car insurance and home insurance costs. These are fundamentally “core” expenses every person is going to have as part of living in the United States.
I then asked AI to analyze the data and give me a ranking of the best state to live in based only on the raw data presented. I wanted to limit it strictly on a core cost basis because other variables will quickly be subjective.
AI produced a spreadsheet and I then asked it to create an infographic but I quickly realized from the analysis that it was biased toward high income earners.
Here is the first info-graphic summary (which has flaws).
In the initial analysis, AI simple weighted all the expenses and mathematically deduced the rankings but it’s never as simple as that because a state like Delaware is optimized for high spenders and larger home owners as it has lower income taxes, sales taxes, property taxes, and lower home insurance rates (few forest fires, hurricanes, etc).
I went back and asked AI to create three personas: High income suburban, working class couple and low income families then asked it to re-rank based on those personas.
Below is the UPDATED info graphic.
I would classify our family as high income suburban and the best states to live in for someone in this category is Delaware, Texas, Florida, Georgia or South Carolina. As a high income earner, it is great that I don’t have to pay state income tax. Although property taxes are high in my state, that can be managed by living in a modest home.
AI created an amazing html page with sliders that can adjust to your priorities (e.g. bigger/small house, more/less commuting, big/low spender taxes, big/low earner) and optimize the state you should be living in. I tried posting it on this site but WordPress doesn’t play nice with HTML rendered pages so here’s a screenshot and there is a download below which may or may not render on your browser.
The only thing I can’t capture are all the state welfare benefits for ultra low income people or those on disability. And by the way, all of this was created in a few minutes by AI after gathering the data with a few searches so if I can do stuff like this there shouldn’t be any reason why other can’t!
Clearly, for those folks posting on /r/povertyfinance, they may need to seriously re-consider where they are living if they hope to get out of endless cycles of poverty.
Share The Wealth
Based on the updated info graphic, are you living in the optimized state for your persona?
I know Southern California is an expensive place to live, but I want to highlight a few things that might not typically be thought of in a pure cost of location analysis.
I can spend time outdoors, walking at the beach, or going to a park, almost any day of the year. That means that I don’t need as much “home” and can opt for much less square footage.
I turned my heater on only one night this entire past winter and I don’t need air conditioning either. That mean my gas and electric bills are extremely low.
If I were living in any other part of the country, I might not be able to enjoy the outdoors year round. And the decreased cost of housing might be eaten up by significantly higher utility bills.
Just something to consider when making comparisons.
Agree whole hardheartedly. I would love to live in California but a 60% tax rate is a no go. I would love to live in Spain too but they have a 45% tax rate and that’s a no for me. Personally, I’d like to have a mountain of money and be able to fly anywhere in the world which is what I do. I spent several months in South America, Asia and Europe last year. I plan on doing the same as soon as this war situation is sorted out. When I retire I plan on spending a month or two in different countries but have my home base in a low tax jurisdiction. I may even spend a month or two in California!
Thanks for your thoughts.