Why Massachusetts?
The Northeast U.S. has long been an expensive place to raise a family, with New York, Connecticut and New Jersey being particularly notorious for high housing and other living costs. What’s behind the sticker shock in Massachusetts?
Home values and rents are at the top of the list. Massachusetts, particularly the Greater Boston area, has some of the highest housing costs in the country.
Realtor.com says the median home price in Boston is just under $1 million, and rental prices are similarly steep, with ApartmentAdvisor reporting average rents on offer in Boston of about $4,200 per month for a three-bedroom, as a family with two children would need.
Massachusetts parents also shoulder some of the highest childcare costs in the nation. On average, families spend around $21,000 per year for infant care. And while Massachusetts is known for its high-quality healthcare system, it comes at a cost. Families in the state face some of the highest healthcare premiums and out-of-pocket expenses.
Last but not least, while Massachusetts boasts excellent public education systems and institutions, that prestige drives higher property taxes. Massachusetts also has a state income tax rate of 5%, which, combined with federal taxes, adds to the overall financial burden.
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Read MoreCan you afford it?
Living in an expensive state can be challenging, but there are several strategies families can use to cope:
Housing Strategies. Downsizing to a smaller home or apartment can significantly reduce housing costs. Look for housing options in less expensive neighborhoods or consider renting instead of buying. Renting out a portion of your home or finding roommates can help offset high mortgage or rental costs.
Child care. Asking family members to help with childcare or participating in cooperative childcare arrangements with other families can reduce costs. If possible, negotiate with your employer for flexible work hours or remote work options to decrease the need for full-time childcare.
Health care. Compare different health insurance plans to find one that offers the best coverage at the lowest cost. Take advantage of health savings accounts (HSAs) to save on medical expenses. Investing in preventive healthcare measures can reduce long-term medical expenses, while regular check-ups, healthy living habits, and vaccinations can help avoid costly medical issues down the line.
Transportation. Using public transportation can save money on gas, parking, and car maintenance. Carpooling with colleagues or biking for short commutes can significantly cut transportation costs.
Tax planning. Take advantage of all available tax deductions and credits, such as those for childcare, education, and medical expenses. Consulting with a tax advisor can help optimize your tax strategy, while contributions to 401(k) or IRA accounts can reduce taxable income, providing tax savings while building your retirement savings.
Food and grocery. Slow your (lobster) roll. Planning meals ahead of time and buying in bulk can reduce grocery bills. Look for discounts, use coupons, and shop at less expensive grocery stores. Preparing meals at home is a more budget-friendly option.
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