10 Places That Can Boost Your Child’s Future Income (& 10 That Won’t)

Where you raise your kids matters. Here are 10 counties shown to raise the earnings of kids who grow up there, and 10 counties to avoid.

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The Best Cities for Raising Kids in 2017

A Place to Learn & Play

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Why Aren’t Americans Moving Anymore?

Here's what's in store for U.S. migration trends in 2017.

January is a good time to take stock of your career, and with the economy perking up, perhaps you should to consider making a dramatic change. After all, what’s more American than relocating for opportunity?

But even as careers get shorter — the average millennial will have seven jobs by age 28 — and the gig economy encourages all sorts of creative work arrangements, a funny thing has happened to the idea of heading “West.”

Americans don’t really move much anymore.

In fact, the rate of interstate moves has fallen by 50% in a single generation. In the 1980s, about 3% of the population moved to a new state every year. Today, that figure has fallen to less than 1.5%. The rate has steadily dropped, and it’s dropping across demographics, and through both good times and bad, suggesting it’s a trend with staying power.

Economists are worried about this. Movement suggests opportunity, so a decrease in migration suggests the “American Frontier” may be closing for good.

Why does this matter so much? Labor portability is the bedrock of capitalism and social mobility. Workers must be able to move where opportunities are in order for labor to be distributed efficiently. And freedom of movement (take this job, and shove it!) is the main tool workers have to bargain effectively with employers — not to mention getting themselves a big increase in income. (Want to know where your finances stand? You can view two of your credit scores, updated every 14 days, for free on Credit.com.)

“Given the role of mobility both for individual labor market outcomes and for the overall efficiency of the aggregate labor market, the long-run decline in migration rates could indicate a decline in overall labor market dynamism,” wrote Fatih Karahan and Darius Li on the New York Fed’s blog recently. “Many policymakers have worried that lower mobility is associated with a more rigid economy, where workers cannot move to locations with good jobs. Lower mobility might cause the labor market to be slow in adjusting to shocks, making downturns longer and recoveries slower.”

But try as they might, while everyone seems to agree migration is down dramatically, researchers can’t agree on the cause. In fact, they don’t even agree that it’s a bad thing.

First, to be specific about the change that’s occurring: The Urban Institute called attention to this slowing migration trend recently, citing Federal Reserve researcher Raven Molloy, who said the percentage of interstate movers among working-age people (25 to 59) has steadily slowed from nearly 3% in the 1980s to less than 1.5% from 2010 to 2015.

In a separate paper, Molloy wrote that drops have occurred across all age groups and many demographic categories. You’d expect younger people to move more, but even that group has shown a steady drop — those aged 20 to 24 moved at a 5.7% rate from 1981 to 1989 but only a 3.3% rate from 2002 to 2012, Molly wrote.

Renters moved more than homeowners, but both moved less frequently during that same time span — renters from 6.4% to 3.6%; owners from 1.5% to 0.9%. Those with more education moved more, but again, movement across all groups fell: College+ dropped from 4.2% to 2.1% while those with only high school educations dropped 2.2% to 1.1%.

That means some more seemingly obvious explanations — like trouble selling housing during the recession, or an aging population — don’t explain what’s going on.

Maybe there’s a happy explanation for this. Three years ago, Greg Kaplan and Sam Schulhofer-Wohl wrote a paper for the Minneapolis Fed that dispelled another popular theory — that the growth of two-income couples makes moving harder, because it’s more challenging for both partners to find new jobs in new areas.

Instead, they said that the changing nature of industry in America means that most regions now offer very similar opportunities. Gone are the days when people moved West to farm or moved to Detroit to work on cars. Using data known as the Theil Index, the pair point out that the mix of jobs offered in U.S. states is continually growing more and more similar — that “geographic job specificity” has fallen by one-third in the past 20 years.

“Fewer workers need to move to obtain the best jobs for them, because labor markets around the country have become more similar … That decrease in geographic specificity makes it easier for workers to stay where they most enjoy living and maintain their occupation,” the two wrote.

Their other explanation is even more positive. Would-be movers have a much easier time test-driving their potential new homes from afar. It’s easier for people in Minnesota to connect with people in California to see what life there is really like.

“With more information, workers are less likely to make moves they ultimately regret, and the migration rate declines,” they wrote. The authors note that among people who do move from state to state, there’s a 15% chance that they’ll move again the next year. So, perhaps we are finally learning the grass isn’t always greener. “In other words, American workers haven’t lost their flexibility. They just don’t need to move so much anymore.”

Another explanation is a variation on the discredited idea that the greying population explains why Americans are moving less. Corporations looking to fill jobs would generally prefer to hire locally. Nationwide searches are expensive, as are long-distance relocations. Because a greater number of older candidates are available nearby, many companies are skipping the more costly form of job hunting, indirectly contributing to less migration, even among younger people, Karhan and Li argued in their paper.

“In short, a young individual today is moving less than a young person did in the 1980s because of the higher presence of older workers,” they wrote. (Again, it’s a silver-lining theory.) “These findings suggest that the declining trend in interstate migration is a response of the labor market to an aging population and does not necessarily signal a decline in the market’s dynamism or efficiency.”

But a more recent research paper published by Molloy and others at The Brookings Institution threw a lot of cold water on these various theories and conceded they’re unable to identify a clear reason. It does hint at two intriguing explanations that require more study, however.

One involves declining levels of trust. States where more people say strangers can’t be trusted experienced even greater drops in migration, the paper said. So a decline in overall social trust could be making people less likely to take the leap of faith needed to make a big move.

But the paper’s most intriguing suggestion involves understanding why workers get the pay and benefits they do. Perhaps larger corporations are screening employees more thoroughly, increasing a worker’s costs for finding new jobs, again making a move less attractive.

Or, perhaps the most obvious answer of all: Moving just isn’t worth it any longer.

Companies may also no longer feel much pressure to lure employees with big pay increases — and that in turn means there are no gold rushes that encourage workers to uproot their lives. This explanation fits with another trend that’s stymied economists for years — Americans stubbornly slugging wage increases, despite a seemingly tight labor market.

While pointing out that much more research in this area is needed, Molloy and his co-authors ended their paper ominously: This effect is “unlikely to be benign.”

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10 Cities Americans Are Leaving the Fastest

These 10 cities are losing population faster than any other large American cities.

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These Movers Will Help You Escape an Abusive Relationship for Free

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In 1997, high school students Aaron and Evan Steed launched their moving service, Meathead Movers, as a way to make money while juggling sports and school. Based in San Luis Obispo, California, roughly midway between San Francisco and Los Angeles, the company’s business was a hit. But periodically, Steed and his partners received upsetting calls — from panicked women trying to flee abusive relationships.

“We’d just help them out for free,” no questions asked, Aaron Steed told Credit.com. Once Meathead Movers opened four offices and began serving the Los Angeles market, they continued to help out victims of domestic abuse free of charge.

“We just kept helping out, and after three years we found ourselves in a contentious situation where the batterer came home and the police were called,” Steed said. At that point, “we realized we had to team up with a local domestic violence shelter” in order to get it done right.

One day, a friend of Steed’s passed along a contact at The Women’s Shelter Program in San Luis Obispo, which offers women and children affected by domestic violence counseling and support. After speaking with a former executive director there, Steed began collaborating on a strategy to better serve the families without putting anyone in harm’s way. The first partnership was formalized in 2001; today, Meathead Movers has nine partnerships with women’s shelters throughout Central and Southern California.

When victims call asking for help, Steed turns them over to a case worker at one of Meathead Movers’ partners, like Good Shepherd in Los Angeles, which then determines the best course of action. “They’ll confirm it’s a legitimate situation, provide housing, legal advice, and all kinds of other things,” Steed explained. “Then, once it’s time to actually move the person out, the shelter will contact us and we’ll do the move.”

Meathead Movers also often helps victims leave the shelter when it’s time to strike out on their own. By his estimate, Steed’s company has helped between 350 and 400 victims. “We don’t want moving to be a hindrance to get out of a bad situation,” he said.

It’s a random act of kindness that’s inspiring other small businesses: In July, Meathead Movers launched the site, MoveToEndDV.org, which challenges 10,000 businesses “to take the #MoveToEndDV pledge and make a donation or provide a product or service for free to help the shelters that support victims of domestic violence.”

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5 Money Tips You Should Know Before Moving Out

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Moving to a new home can be very stressful and also exciting. This may be your first time on your own without financial support. You want to ensure you are financially prepared and ready for the big step, so here are a few money tips to help you get started.

1. Build Your Credit

Before signing on the dotted line, you should consider building solid credit. If you have a good credit score, then you may get a low, fixed-interest rate when applying for a mortgage. If you ignore your credit score, then you may get a high interest rate or even possibly denied on your loan. If you are moving in with a partner, then consider sitting down with him or her and looking over your credit together. (You can view a free snapshot of your credit report, updated every 14 days, on Credit.com.) Whether you have a joint account or not, you are now both responsible for your mortgage and other expenses that come with your home. (Note: Landlords, too, often check credit, so it’s in your best interest to make sure yours is in good shape before filling out rental applications.)

2. Plan Your Budget Now

While you are still living at home, you might want to plan out your budget before moving into your new home. First, write down all of your current expenses, then include your “new home” expenses and how you will be paying for them. Your “new home” expenses may be furniture and appliances to start out, but you also want to include your mortgage or rent, utilities and any loans you plan on taking out. It might be difficult to guess how much all of your bills will be, but it’s beneficial to provide an estimate of how much you think it might cost. This way, you will be prepared and have enough money aside to pay for it.

3. Pay Down Your Debts

Moving to a new home comes with a lot of additional expenses. You might want to pay down a little (or all) of your debt now before taking on more. It might be impossible to eliminate a debt as large as student loans, but you should try to at least get your number down. So, if you already have steady monthly payments, consider putting a little extra toward it each month. Any little bit helps.

4. Save Money

Take out a pen and paper and write down all of your financial goals for your new home. Let’s say you’ve always wanted a large dining room table or a leather love seat. Try and find the cheapest option and start saving! You can choose to save one at a time or tackle each goal separately.

Whatever your strategy is, saving before you move will help you stay organized and avoid going into debt.

You might want to consider putting 10% of your net pay (take-home pay) toward your savings for your new home to help you get ready. You can even have a little fun with this and give your savings a name such as “A New Beginning.”

5. Practice Makes Perfect

You might want to practice paying your bills before you move out so you can get used to not having the money. This might be a little difficult at first, but it will only help you become more financially prepared for your move. If you find yourself struggling to meet your payments, then you may have to cut back on some expenses from your budget. If you are comfortable taking the money out of your account, consider putting it into your savings so you are ready to pay for it when you officially move in.

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Should I Get a Credit Card Before or After I Move?

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If you’re in the process of moving, or know you will be before too long, you probably have a long checklist of things to do before the movers load up all the boxes. If you have “get a new credit card” on that list, you may want to think twice before you file an application.

According to an email from Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, “moving is hectic enough without bringing credit into the picture.”

Timing is Everything

“People who are relocating and considering a credit move should think about timing,” McClary said. “It is far better to apply for new credit well before the move or a while afterward, in order to avoid any problems closing on a mortgage or being approved for an apartment rental.”

But where is that sweet spot?

“While there is no set rule, an ideal buffer may be about six months or more on either side of the relocation,” McClary said. “The bottom line is that too many credit inquiries … could have a negative impact on a person’s credit rating.”

How New Credit Could Affect Your Move

When you apply for a new line of credit, a hard inquiry is generally placed on your profile, which will ding your score. (Your history of applying for credit accounts for 10% of your credit scores.)

“While it may not amount to much, a small drop in a credit score can be the difference for being approved or rejected for some who already are on the margin,” McClary said. “Others may still be approved, but may miss out on the best available terms when qualifying for a mortgage loan.”

Remember, many landlords check a potential tenant’s credit reports and review their credit scores before agreeing to rent out an apartment, so dings to your credit due to a new inquiry could hurt your odds of getting that place, too, particularly if your credit is on the bubble.

You can see how your credit inquiries and spending habits are affecting your credit by viewing two of your credit scores for free, updated every 14 days, on Credit.com. If you discover your credit needs a bit of work, now may not be the time to apply for that credit card. You may also want to consider paying down your debts and disputing any errors you find on your report to help your score rebound.

Don’t Forget…

No matter when you apply, it’s important you don’t let payments fall through the cracks.

“It sounds like a no-brainer, but with all of the confusion and chaos of relocating, even the most alert consumers can be at risk of missing a payment or two,” McClary said. “This can not only cause a problem when the time comes to apply for new credit after the move, but it can have a negative impact on new accounts that were opened beforehand.”

Your payment history is the biggest influencer on your credit, making up 35% of your scores. To help prevent negative damage, McClary advises consumers “set automated reminders and switch to email and online account management if you haven’t done so already.” He said that “even if you prefer paper statements, having online account access is a good backup plan when in transition.”

Sending Your Change of Address Cards

You probably have a list of people to notify that you’ve moved. And, although they may not exactly qualify as your friends, it’s important your creditors are on that list. Not only does letting them know you’ve moved help them keep track of where to send any snail mail, but it is a security measure.

“If your creditor is relying on an outdated address, your normal card activity in your new neighborhood may trigger a fraud alert that could cause them to shut down the account,” McClary said. “Even if the account suspension is temporary, it can still be a big hassle.”

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10 Areas With Great Schools Where You Can Actually Afford to Live

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10 Areas With Great Schools Where You Can Actually Afford to Live

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Young Adults Are Skipping Starter Homes, Survey Says

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Young would-be home buyers are still sitting on the sidelines of America’s housing market, with first-time homebuyers representing a decades-low share. Student loans, high prices and low credit scores have all been blamed for this, but Bank of America recently proposed a different explanation.

Perhaps they’re just being patient.

Young adults don’t want starter homes, the bank said when explaining the results of a recent survey; they want to wait until they can buy their dream home and perhaps the home they’ll grow old in.

“Seventy-five percent of first-time buyers would prefer to bypass the starter home and purchase a place that will meet their future needs, even if that means waiting to save more,” the bank says. “Thirty-five percent want to retire there.”

When asked why they haven’t bought a home, 56% told researchers, “I don’t think I can afford a home or the type of home I’d want.”

California loan agent and housing expert Logan Mohtashami said he’s seen evidence of this in his own sales. Younger folks are looking for larger homes, he said, specifically “more three-bedroom detached homes. That means no condos for them.”

But while patience is a virtue, so is facing reality. There’s a chicken-and-egg problem with claiming that would-be buyers are simply waiting and saving: There are very few starter homes for them to buy. Would these young people feel differently if they actually had options?

To understand the question, let’s back up a bit and get into the numbers.

The housing market is hot — home price listings are up 9% nationally from one year ago, according to Realtor.com. But the market is still broken. Only 30% of homes are being sold to first-time buyers, when the historic rate is 40%, according to the National Association of Realtors (NAR). The absence of (mostly) young first-time buyers creates problems all the way up the housing market food chain, making life difficult for families looking to sell and trade up while turning millennials into a generation of apartment dwellers.

Or perhaps it’s not really a problem. It’s possible some homeownership attitudes are changing, and trading up is becoming a thing of the past. Older generations were very comfortable buying smaller homes and moving as their families grew. Today’s buyers are used to much larger homes — the average home built in 2016 is 2,500 square feet, compared to 1,500 square feet in the 1970s, Mohtashami said.

Meanwhile, long-term trends suggest that Americans — both first-time buyers and trade-up buyers — are staying in their homes longer. A study by the National Association of Home Builders shows families moved after 11 years in 1987, on average, but stayed 16 years in 2011. The research is skewed by the housing recession, but the long-term trend is still for buyers to stay in their homes longer.

Maybe we should call millennials the “one and done” crowd.

But back to the chicken-and-egg problem. First-time home buyers have an average student loan debt of $25,000, according to NAR, which puts a serious damper on home-buying dreams. NAR thinks that debt delays saving for a down payment by an average of three years.

But debt is only one of the obstacles young people face.

“There are several reasons why there should be more first–time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college-educated and the fact that renting is becoming more unaffordable in many areas,” said Lawrence Yun, NAR chief economist at NAR. “Unfortunately, there are just as many high hurdles slowing first-time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there’s scarce inventory for new and existing homes in their price range, and it’s still too difficult for some to get a mortgage.”

Where Are All the Starter Homes?

The disappearing starter home is one element of the equation that some have overlooked, but it’s critical. Five minutes on any realty website can offer a tough dose of reality to anyone dreaming of buying a first home.

Sales of $200,000-and-under homes dropped the past two years, according to RealtyTrac. And many of the existing cheaper homes — often made available through foreclosure during the recession — have been snapped up by investors and turned into single-family rental units. A report last year from Harvard’s Joint Center for Housing Studies found that the recession added 3.2 million more single-family home rental units, “unprecedented” growth in this part of the market.

Then there’s the new construction problem. Builders just aren’t building $200,000 homes right now for a simple reason: Larger homes mean larger profit margins. BuilderOnline.com did a great job of breaking down the math in a story last year:

Making a $200,000 home work as a home builder is junior high–level arithmetic. Solving for profit — say, 20% — land and building direct costs cannot exceed $160,000. Problem is, a 20% margin on a sub-$200,000 house has become frighteningly elusive in the past decade.

The lowest build cost is around a $50 a foot,” says David Goldberg, a home building and building products manufacturers analyst for UBS, New York. “If you do a 2,000-square-foot house, which is what you’d have to do to compete with existing stock, that leaves you with $100,000 of sticks-and-bricks cost. The maximum cost on the land would be $60,000.”

So back to the original proposition: Are young people staying in apartments or living with their parents because they are patient or because they are hopeless? The answer, no doubt, lies somewhere in the middle. But when young people say they are simply waiting until they can afford the home they want, you have to wonder if they are being patient or simply sparing themselves the heartache of shopping for a unicorn.

If you’re in the market to buy a home, it’s a good idea to check your credit before you apply, since a good credit score will help you qualify for better terms and rates. You can see where you currently stand by viewing two of your credit scores, updated each month, for free on Credit.com.

And if your credit is looking lackluster, you can try to improve your score by disputing errors on your credit report, paying down high credit card balances and limiting new credit inquiries.

More on Mortgages & Homebuying:

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