You Don’t Need Six Figures: The Financial Realities of Living in Iowa

cornAt various points, readers have seemed quite surprised to find out that I live in Iowa and that I can see cornfields in two directions from the back porch of the house I’m about to buy. By sheer numbers, many more people live in urban environments than live in an environment like this, and many of those can’t even imagine living in such an area.

Obviously, there are some disadvantages to living here, chief among them cultural. I have few opportunities to experience large cultural events in Iowa (though there are many interesting small ones) and cultural trends often take a very long time to reach here. Also, the population is very sparse – every time I visit an urban center, I have an almost overwhelming sense of too many people, even when I’m in a suburban area. Another disadvantage is salary; dollar for dollar, jobs simply do not pay as well here as they do elsewhere.

But there are huge financial and cultural advantages to living in Iowa that often aren’t taken into account. Here’s why I love living in Iowa and have very little interest in moving away.

Low housing prices Even in the most expensive regions of the state, you can get a newly-built four bedroom 2000+ square foot home for around $220,000. This comes out to monthly housing payments (depending on specifics) of about $1,400 a month. No joke at all – people in most large cities almost seem unable to comprehend that this is possible.

Good schools Most Iowa schools outside of Des Moines are quite good. The class sizes are small (if there are only 5,000 residents in a fifty mile radius, the school district has to be small and this forces small classes) and the teachers are usually people who want to be there – they chose a rural setting for a reason. Iowa has a lot of tiny schools that turn out National Merit Scholars on a regular basis. There’s no need for private schooling at all.

Low cost of living Because of the low housing prices, most services are able to compete and have lower rates. I have my son in the absolute best daycare in my area and for him alone the cost is less than $600 a month. There are other options that are substantially cheaper than that. I recently read that you have to pay $1.60 for a 20 ounce bottle of Diet Coke in San Francisco – if someone charges more than a dollar here, it’s considered borderline extortion.

Low taxes Because the salaries are lower, most people are in a lower tax bracket or, at the very least, are paying much less of their salary in a high bracket. This means that we get to keep a larger portion of our salary for the same job as compared to urban centers.

Low cost of retirement Because I can live on a lower salary here than elsewhere, I don’t have to put as much away for retirement as others – I may be working with the same percentages as others, but the raw dollar amount is significantly less for me.

As a final note, although many view it as a disadvantage, I believe there are some cultural advantages to rural Iowa. I have a deep understanding of many aspects of America (agriculture, outdoorsmanship, etc.) that many Americans don’t have the opportunity to experience. Also, the solitude can be amazing – I can go for long country walks for hours without seeing another soul.

Yes, even though I may not make as much money, Iowa offers so much that I can scarcely think of living elsewhere.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.