Best Cities for New College Grads – 2022 Edition

The time that follows college graduation can be an exciting period in the life of a recent graduate. This is when they enter the workforce, take on new responsibilities, and perhaps, move to a new city. A college diploma can also start to pay off almost immediately. In 2021, full-time workers between 22 and 27 years old with bachelor's degrees earned a median annual wage of $52,000, while those with only high school diplomas made roughly $30,000, according to the Bureau of Labor Statistics.

Starting one's post-grad life and potentially paying off college debt is easier in some cities than others, however. In this study, SmartAsset analyzed data to identify and rank the best cities for new college grads in 2022. Specifically, we considered a number of factors centered around jobs, affordability and fun. If you want to get more information on how we found and analyzed data across cities, read the Data and Methodology section below.

This is SmartAsset's ninth study on the best cities for new college grads. You can find the 2021 version here.

Key Findings
    • Mid-sized cities rank over big ones. Data from our study shows that recent college graduates will have more opportunities in mid-sized cities when compared to the largest ones. The average population of the top 10 cities in 2022 is less than 471,900. From the 10-biggest cities in America, Philadelphia is the only one to rank in the top 25 for new college graduates (15th).
    • Seven of the top 10 cities are in the Midwest. The Midwest is home to a high concentration of cities that are great for recent college graduates. Though all seven cities perform well across the three categories we considered (jobs, affordability and fun), they stand out for our fun score. This score considers how many dining and entertainment establishments there are, the percentage of the population that's in their 20s, as well as bar and restaurant reviews.

1. Cincinnati, OH

Cincinnati ranks as the No. 1 city for new college graduates for the fourth year in a row. This city of 302,000 residents has the fourth-highest fun score and fifth-highest affordability rating. As for individual metrics, Cincinnati has the fourth-highest average Yelp bar score and the 10th-highest average Yelp restaurant score. Cincinnati is also home to the sixth-lowest median rent ($635) and the seventh-lowest cost of living ($22,721), which comprises typical living expenses like the cost of food, housing, transportation, medical care and other needs. Meanwhile, 19.69% of the population is between ages 20 and 29, which is the 15th-highest across our study.

2. Columbus, OH

As the home of Ohio State University, Columbus is the second-ranked city for new college graduates. The city, which has the second-highest overall fun score, ranks in the top 10 for average Yelp bar score (seventh) and average Yelp restaurant score (ninth). People in their 20s make up 19.63% of the population of Columbus, which is the 17th-highest percentage across our study. The city also has the seventh-lowest unemployment rate for bachelor's degree holders (2%) and 24th-most Indeed job listings (3,831).

3. St. Louis, MO

St. Louis has the sixth-highest fun rating across our study, thanks in large part to average bar and restaurant Yelp scores that were among the top 15. Meanwhile, the city is among the most affordable places we studied. The median monthly rent in St. Louis is $659 (ninth-lowest), while the cost of living is $23,462 (18th-lowest).

4. Milwaukee, WI

Milwaukee has the 17th-lowest median monthly rent ($727) and 20th-lowest cost of living ($23,475). Bars in Milwaukee also have the 13th-highest average score on Yelp, while dining and entertainment establishments make up 10.67% of all establishments, which ranks 30th out of 113 cities in our study.

5. Madison, WI

Madison, which is home to the University of Wisconsin's flagship campus, ranks third overall for fun and seventh for jobs. The city of 258,000 residents has the highest percentage of people between 20 and 29 years old (26.60%) and the lowest unemployment rate for people with bachelor's degrees (1.4%) across our study. Madison's overall unemployment rate is also the third-lowest at just 2.3%.

6. Indianapolis, IN

Indianapolis' bars have the second-highest average score on Yelp, while its restaurants have the fourth-highest average score. Median monthly rent in Indianapolis is $734, the 19th-lowest across our study. The city also has the 21st-lowest unemployment rate for people with bachelor's degrees (2.3%).

7. Lexington, KY

Lexington, Kentucky ranks 20th overall for affordability and 21st for fun. The city, which is home to the University of Kentucky, has the sixth-highest average Yelp restaurant score, as well as the 13th-lowest cost of living ($23,163). Meanwhile, 18.61% of the city's roughly 322,000 residents are between 20 and 29 years old (the 22nd-highest).

8. Nashville, TN

Nashville, Tennessee has the fifth-highest fun score of all 113 cities in our study. Dining and entertainment establishments make up 13.52% of all establishments in the area, sixth-most across the study. Home to Vanderbilt University, Nashville also has the 16th-lowest unemployment rate for people with bachelor's degrees (2.2%).

9. Pittsburgh, PA

Pittsburgh ranks fourth for the percentage of people in their 20s, as 23.45% of the population is between 20 and 29 years old. The city, which is home to the University of Pittsburgh and Carnegie Mellon University, has the 19th-lowest cost of living ($23,463) and the 22nd-most Indeed job listings (4,110).

10. Birmingham, AL

Median rent in Birmingham is just $631 per month, the fifth-lowest among the 113 cities in our study. The city is also tied for having the sixth-highest average Yelp restaurant score, while the average Yelp score for bars is 11th-best. Unemployment is also low in Birmingham, as only 2.5% of workers were out of a job as of March 2022, which is the 12th-lowest.

Data and Methodology

To find the best cities for new college graduates, we examined data for 113 of the largest U.S. cities across three categories that include 10 individual metrics:

  • Jobs. For our jobs score, we analyzed the overall unemployment rate, the unemployment rate for bachelor's degree holders, earnings for college graduates and the number of Indeed job listings. The bachelor's degree unemployment rate and the earnings for college graduates come from the U.S. Census Bureau's 2020 5-year American Community Survey. The overall unemployment rate, which is for March 2022, comes from the Bureau of Labor Statistics' Local Area Unemployment Statistics and is measured at the county level. The number of Indeed job postings comes from Indeed.com Job Search API, for which data was pulled in April 2022.
  • Affordability. For this score, we looked at the monthly median rent in each city, as well as the cost of living. The median rent numbers come from the Census Bureau's 2020 5-year American Community Survey. The cost-of-living numbers come from the MIT living wage calculator, for which data was pulled in April 2022.
  • Fun. To create this score, we looked at the concentration of entertainment and dining establishments, the percentage of the population ages 20 to 29 and the Yelp scores of restaurants and bars. The concentration of entertainment and dining businesses comes from the Census Bureau's 2020 County Business Patterns Survey and represents bars and restaurants as a percentage of all establishments. The population numbers come from the Census Bureau's 2020 5-year American Community Survey. The Yelp scores come from Yelp.com API, for which data was pulled in April 2022.

First, we ranked each city in each metric, assigning equal weight to every metric except for average Yelp restaurant rating and average Yelp bar rating, which we half-weighted. We then averaged the rankings across the three categories listed above. For each category, the city with the highest average ranking received a score of 100. The city with the lowest average ranking received a score of 0. We created our final ranking by calculating each city's average score for all three categories.

Tips for Starting to Save for Retirement
  • It's about time in the market, not timing the market. This investing axiom is especially valuable for recent college graduates or people who are just starting their careers. The earlier you start saving for retirement, the better off you'll be. For example, a 22-year-old who contributes an average of $600 per month to their 401(k) throughout their career and earns a modest 5% will have over $900,000 saved by the time they're 62.
  • An HSA is a retirement account, too. A health savings account (HSA) is a special savings vehicle made available to people enrolled in high deductible health plans. While these accounts help people save for annual medical expenses, they offer unique tax benefits that make them viable retirement accounts, as well. Like a traditional 401(k) or IRA, contributions are tax deductible. However, investment earnings grow tax free and money that's withdrawn from an HSA is not taxed when it's used to pay for qualified medical expenses. And unlike a flexible savings account, the money in an HSA doesn't need to be withdrawn by a certain date. You can carry your balance over from year to year and save it for retirement, if you choose.
  • Talk with a financial advisor. Whether you're on the doorstep of retirement or still decades away from it, a financial advisor can help you create a financial plan for your needs and goals. Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.

Photo credit: ©iStock.com/PeopleImages

The post Best Cities for New College Grads - 2022 Edition appeared first on SmartAsset Blog.

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