In life, it’s natural to compare yourself to others. While you don’t want to go overboard, checking in on your peers can sometimes be a useful gauge. That’s where you might want to do a little benchmarking. A great place to start is by looking at the living wage and cost of living in Minnesota.
Doing this quick comparison of your finances to the cost of living can reveal many truths about the state of your financial health, so you know where you’re strong. This can also help you find opportunities to address problem areas in your budget. The best place to compare your finances to county-by-county data is the Minnesota Employment and Economic Development cost-of-living tool.
Understanding your earnings and spending relative to that of fellow Minnesotans as well as people in your county can help you get smarter with your money in two critical ways:
1. Is your spending in balance?
Doing a cost-of-living comparison can reveal whether you’re overextending yourself on expenses like food or housing. Once you realize that you’re paying well above average, you can take the necessary steps to realign your spending. Maybe a bit of meal planning will curb costs at the grocery store.
Sometimes, this research can work in your favor. For example, you may discover the little place you’re renting is a steal, helping you decide to stay put for now and pocket that extra money. Either way, knowing the cost of living can help you plan to get into a stronger financial position.
2. Are you being paid at your full value?
Cost of living also looks at the living wage in your area. If your wages are below the livable rate, don’t be discouraged. Rather than thinking of it as a deficit, focus on your potential. With this economy of surplus jobs, this may be your cue to stretch yourself.
It's not that your budget needs to match the benchmark. But it can help you reevaluate your spending priorities, and give you an idea of where to find a better deal.
For more budget help, read On your own? How to create your first adult budget.
What’s considered a living wage in Minnesota?
There is no one answer to the living wage question. Because everyone’s family and circumstances are different, it will depend on your needs. But there are some factors to consider when you’re thinking about what you need to live. This includes:
Where you live
The cost of living is higher in certain parts of the state than in others (metro vs Greater Minnesota). Of course, this also depends on which region of the state you live in.
The size of your family
Being single versus having a partner or having children will affect your budgetary needs.
So, what is a living wage in Minnesota?
According to the Minnesota Department of Employment and Economic Development, a living wage in Minnesota for a single person is $14-20 an hour, depending on where one may live.
Need help reaching your financial goals? Read, Want to buy a home? Get your financial house in order.
How much money do you need to live comfortably in Minnesota?
What is living comfortably in Minnesota? Like anywhere, a place to start is having the ability to cover your expenses, with some extra to reach your goals.
To find how your expenses compare with others in your county, the Minnesota Department of Employment and Economic Development has an interactive cost-of-living tool. Whether you live in the metro area or Greater Minnesota, the cost-of-living tool can give you a starting point for these expenses. Here’s how to use it.
- Enter your household information (partner status, children, work, etc.).
- Scroll down and click on your county to highlight the data.
- If you want to examine a larger geographical area, you can also review data by region as well as statewide.
- Compare the earnings and expenses to your monthly budget.
Cost of living in Twin Cities vs Greater Minnesota
The Center for Rural Policy and Development divided the cost of living in Minnesota into two main categories: The seven-county Twin Cities metro area and Greater Minnesota. Their takeaway is your money goes farther in Greater Minnesota compared to the Twin Cities. Here’s a look at the averages.
- Twin Cities metro: $700 a month
- Greater Minnesota: $300
- Twin Cities Metro: $1,200 a month
- Greater Minnesota: $800
- Twin Cities Metro: $660 a month
- Greater Minnesota: $400
- Twin Cities Metro: $550
- Greater Minnesota: $609-$659
Transportation (owning a car)
- Twin Cities metro: $733
- Greater Minnesota: $841
Now that you have an idea of the cost of living in Minnesota, how do your finances stack up? Knowing the living wage along with the cost of living in Minnesota is one way to evaluate your budget and spending habits.
Minnesota-based banking you can trust
At Minnwest Bank, we’re here for all your personal banking needs. Connect with a personal banker in your community. With our expertise, we can help you can make informed decisions so you can live the life you imagined.