It’s an exciting moment when you receive an offer. Almost immediately, you can envision yourself in the role while reviewing details like the call schedule, your requirements and, of course, compensation.
At first look, the salary may strike you as exceptional, and perhaps it’s the first time in your career that you’ve been offered such a high figure. But depending on where you live and decide to practice in the country, that figure might carry different weight.
When assessing a job offer, keep in mind how the salary relates to the cost of living in the area so you can ensure the opportunity will set you up for both professional and financial success. How does the salary compare to the cost of living and how do you know if the offer is right for the area?
Research salary trends by area
When researching options during your job search, you should also investigate salary trends to have general knowledge of national compensation averages for someone in your profession and specialty. But to know what to ask for your unique opportunity, you’ll also want to have an idea of how these trends vary from state to state and city to city.
For example, let’s say you’re an internal medicine physician comparing two opportunities: one in Washington and another in North Carolina. Washington’s average salary for your specialty is around $253,934, while North Carolina’s is closer to $161,101.
Initially, it might seem like the opportunity in Washington is the better deal because you’ll be making more money, but you’ll likely also be spending more to live there. That’s why it’s important to consider not only the baseline salary, but how far that salary will go when costs relative to that location come into play.
Weigh the salary against cost of living
As you consider the fairness of the proposed compensation, it’s beneficial to compare the figure you’ve been offered to salary averages in that specific area – rather than to the national average or the average for that state. The differences in compensation could be as extreme as the differences in costs associated with living there.
For instance, let’s compare a physician practicing in Effingham, Illinois, to another physician practicing in the heart of downtown Chicago. The Effingham physician’s salary might fall on the lower end of the spectrum for that specialty’s average in Illinois. However, rent, for example, in Effingham might average $800-900, while a comparable living arrangement in downtown Chicago might be closer to $2,000 or more.
Then, there are additional expenses that vary for each area, like price of groceries, gas or other forms of transit, which will influence the necessary cost and, subsequently, the compensation needed to maintain a comfortable lifestyle in that area.
In a rural community where the population is smaller, typical expenses are usually lower – and so is the salary. On the other hand, living or practicing near a larger urban area may mean spending more, which will require additional compensation to support those expenses.
Consider other personal factors
You’ll also want to consider specifics personal to you, like whether you have a family and children. If so, it might make a difference when you consider the cost of supporting their hobbies, interests and needs. It also influences the type housing you might choose, in which neighborhoods you’d prefer to live and the proximity to where you work.
Does having a family and living in the suburbs mean you’ll have a longer trek to work each day and more expenses for gas and potential car maintenance? If so, make note of those details.
Calculate what’s fair
Along with doing research to determine if the compensation offered is fair, you can also utilize tools to help you assess cost of living and appropriate salaries for your profession and specialty.
Here are some resources that can help:
May 4, 2021
