upworthy

finance

Business

This Map Reveals The True Value Of $100 In Each State

Your purchasing power can swing by 30% from state to state.

Image by Tax Foundation.

Map represents the value of 100 dollars.

As the cost of living in large cities continues to rise, more and more people are realizing that the value of a dollar in the United States is a very relative concept. For decades, cost of living indices have sought to address and benchmark the inconsistencies in what money will buy, but they are often so specific as to prevent a holistic picture or the ability to "browse" the data based on geographic location.

The Tax Foundation addressed many of these shortcomings using the most recent (2015) Bureau of Economic Analysis data to provide a familiar map of the United States overlaid with the relative value of what $100 is "worth" in each state. Granted, going state-by-state still introduces a fair amount of "smoothing" into the process — $100 will go farther in Los Angeles than in Fresno, for instance — but it does provide insight into where the value lies.

The map may not subvert one's intuitive assumptions, but it nonetheless quantities and presents the cost of living by geography in a brilliantly simple way. For instance, if you're looking for a beach lifestyle but don't want to pay California prices, try Florida, which is about as close to "average" — in terms of purchasing power, anyway — as any state in the Union. If you happen to find yourself in a "Brewster's Millions"-type situation, head to Hawaii, D.C., or New York. You'll burn through your money in no time.

income, money, economics, national average

The Relative Value of $100 in a state.

Image by Tax Foundation.

If you're quite fond of your cash and would prefer to keep it, get to Mississippi, which boasts a 16.1% premium on your cash from the national average.

The Tax Foundation notes that if you're using this map for a practical purpose, bear in mind that incomes also tend to rise in similar fashion, so one could safely assume that wages in these states are roughly inverse to the purchasing power $100 represents.


This article originally appeared seven years ago.

From Your Site Articles
money
Education

Real estate broker breaks down why middle class millennials and Gen Z can't afford housing

"It's fine...we just have to stop getting our fancy coffees and we can afford it."

Photo credit: Canva

Real estate broker explains why Millennials can't buy houses

There's a housing crisis in America. It's not that there aren't houses available. Thousands of houses and apartments sit empty across the country, but the price for housing has reached levels that seem unsustainable for the middle class and those classified as working poor. Some might argue that middle class is now the working poor, though their yearly salary says they should be able to fair just fine.

Unfortunately, what used to be considered a decent salary for a middle class family to live comfortably is now barely enough to scrape by given the cost of housing. But some people from the boomer generation still struggle to understand why millennials and Gen Z can't afford housing.

Freddie Smith, a real estate broker, took to social media to explain why younger generations are struggling to purchase a home when their parents didn't. The real estate finance lesson was prompted when a baby boomer pointed out, "Don't forget we had 13% interest rates in the 80s."

A 13% interest rate seems like insanity upon first glance, but after Smith breaks it down, it doesn't look so bad. "I wish we had 13% interest rates if we had your home prices," the broker says before breaking things down.

Smith quickly starts speaking in numbers, revealing that in 1980 even with their yearly salary being only $22K with the 13% interest rate, their monthly payment only equaled to 26% of their monthly income. If millennials had the same circumstances, their median yearly salary would be $80k, their median price of a home $170K, and with a 13% interest rate the monthly payment would be $1,790–only 26% of their monthly income.

But that's not the reality that Millennials and Gen Z live in. While the median salary is $80k, the median price of a home is $419K, and while the interest rate in 2024 is 7%, with the housing price so high it would make the monthly payment 42% of their monthly income.

Smith wraps up the video saying, "And here's the kicker. Someone making $80K in most cases can't even qualify for this."


@fmsmith319 1980 vs 2024 home prices and interest rates
♬ original sound - Freddie Smith


That certainly put things in perspective for people. The video was flooded with comments from exhausted and frustrated millennials.

"Oh and the wives got to stay home and care for the kids now we pay another $1600 a month for daycare for us both to work," one person laments.

"Imagine if we had 140K homes with 13% rates. The gaslighting from them is WILD. I’d take 14% rates if the average home was only 140K," another says.

"It’s fine.. we just have to stop getting our fancy coffees and we can afford it," someone writes.

"We’re facing a 5K payment with 10% down on the average home. Same house cost 3K a month in rent. So we’re renting indefinitely at the moment," a commenter shares.

But this isn't just an issue in America. There were people outside of the U.S. sharing their astronomical cost of an average family home.

"Same here in Oslo, Norway. By dad bought his house for $22,500 in 1972. He’s selling it now for $1.75 million. And of course he says just this. 'You just have to spend less and work more.' Lol," someone shares.

"It’s worse in Australia. Average salary $80k average house price $1m," another writes.

While Smith doesn't offer a solution, his breakdown may help older generations understand why their children and grandchildren aren't buying homes. One can only hope housing prices go down or wages significantly increase so the middle class can afford a little more than their basic needs on top of being able to buy a home.

From Your Site Articles
middle class crisis
Democracy

15 million Americans have medical debt crushing their credit scores but that's about to end

This is great news for the millions of us with outstanding medical bills.

Photo by Mikhail Nilov/Pexels

Millions of American families are trying to pay off medical bills that put them into debt.

A new proposed rule from the Biden administration could spell some relief for people with outstanding medical bills.

According to data collected by the Consumer Financial Protection Bureau (CFPB), 15 million Americans are carrying $49 billion in medical debt that shows up on their credit report, potentially having a negative impact on their credit score. A new rule banning medical debt from credit reports would change that.

In the U.S., people's ability to get approved for a car loan or a mortgage to purchase a house depends heavily on their credit score or FICO score. People with a strong credit history, who make payments on time and don't carry too much debt, will usually have a good credit score and an easier time being approved for loans with the best interest rates. A low credit score makes getting a loan more difficult or more expensive.

Unfortunately, circumstances out of people's control, like medical care that puts them thousands of dollars in debt, can negatively impact their credit score.

"Medical debt makes it more difficult for millions of Americans to be approved for a car loan, a home loan or small business loan, all of which in turn makes it more difficult to just get by, much less get ahead. And that is simply not fair," Vice President Kamala Harris told reporters via teleconference.

CFPB Director Rohit Chopra also shared that having medical debt is not a fair indicator of someone's true credit habits.

"Medical debt on a consumer credit report is a very different type of debt than a mortgage, an auto loan, or a credit card," Chopra explained. "Sometimes, as is the case with a visit to the emergency room, the debt is taken on unexpectedly and in a time of crisis. Medical bills are also frequently subject to coding errors, charity care mistakes, or complexities with insurance. A decade ago, the CFPB found that medical debts were overly penalizing consumer credit scores, and we have consistently found that medical billing data on a credit report is less predictive of future repayment than other debts."

Chopra also called out the predatory practices that have influenced credit reporting systems when it comes to medical debt, providing an unfair disadvantage to consumers.

"Some have seized on medical debts as a major moneymaking enterprise," he said. "These entities purchase medical debt, sometimes for pennies on the dollar, and they can cash out big by getting consumers to pay up on those debts. And one of the easiest ways they can do so is by threatening to park that medical debt on the credit report, where it might impede a consumer’s ability to get approved for a loan. In this way, the credit reporting system more closely resembles a weapon for debt collectors rather than a tool for lenders to assess someone’s likelihood to repay a loan."

Chopra also pointed out that the three big credit reporting agencies——Equifax, Experian, and TransUnion—voluntarily removed some medical debt from credit reports, only certain kinds. CFPB research found that although the number of Americans with medical debts on their credit report had decreased, the numbers were still substantial and disproportionately impact low-income Americans. Additionally, the average medical debt on credit reports had increased from $2,000 to over $3,100.

Vice President Harris said that this change would result in millions of Americans seeing a 20-point increase in their credit score on average, allowing for 22,000 more approved mortgages to buy a home. She also called on states, cities and hospitals to join the Biden administration in forgiving medical debt.

According to ABC News, the rule has been in the works since September and could go into effect early next year.


From Your Site Articles
policy
Education

Finance expert explains how much money Jeff Bezos has using a giant sack of rice

That rice could feed a lot of families.

via HumphreyTalks/TikTok

What a billion dollars looks like in grains of rice.

The high percentage of wealth concentrated in a tiny fraction of hands in America is a big concern for many people. The top 1 percent of wealthiest Americans owned 32.3% of the nation’s total wealth at the end of 2021, while the share of wealth held by the bottom 90% was just 30.2%.

It can be hard to comprehend how much money billionaires have when discussing tycoons such as Warren Buffett, Elon Musk, or Jeff Bezos. So, finance educator Humphrey Yang created a TikTok video to give people a good idea of how much money Jeff Bezos has.

In his first video, he provided some perspective on how large a billion is by juxtaposing one grain of rice ($100,000) with 10,000 grains of rice ($1 billion). The bonkers part of the experiment is that he counted out the 10,000 grains by hand, which took him over 12 hours.

@humphreytalks

This took me hours don’t let it flop #billion #money #personalfinance #rice #xyzbca

To take things a step further and show how much money Amazon founder Jeff Bezos has, he went to Target and bought a digital food scale, then hit up Costco to purchase some large restaurant-size bags of rice. After measuring out $122 billion, it reached 58 pounds of rice.

@humphreytalks

Rice. Part 2: Jeff Bezos net worth. #rice #billion #billions #amazon #jeffbezos #money #personalfinance #xyzcba

One must note that this video was created in February of 2022, and since then, Bezos' wealth has grown to over $150 billion.

The video was eye-opening for a lot of Yang’s followers. "This visualization really puts everything into perspective. Great job!" M_o_n_t_a_n_a wrote. "How do people watch this and not go blind with rage at the inequity of this situation?" Sarah Robinson added. "Imagine owning just one grain of rice. Can’t relate," LeeExplored added.

From Your Site Articles
money
Trending Stories