Your Salary Isn't the Same Everywhere
A $120,000 salary in San Francisco doesn't buy the same lifestyle as $120,000 in Austin or Nashville. Cost of living varies dramatically between cities, and understanding these differences is crucial when evaluating job offers or planning relocations.
Real Example:
• $150K in San Francisco ≈ $90K in Austin purchasing power
• $100K in Miami (no state tax) ≈ $114K in NYC (high state tax)
• $80K in rural Ohio ≈ $130K in Manhattan lifestyle
The 5 Key Cost of Living Categories
1. Housing (30-50% of budget)
The single biggest cost of living factor. Housing costs vary by 5-10x between cities.
Typical Monthly Rent (1-bedroom):
💡 Pro Tip: Don't compare rent to your current city—compare it to your take-home pay in the new city. A $3,000 apartment might be affordable on a $200K salary but unaffordable on $120K.
2. State and Local Taxes (0-13% of income)
State income tax can make a massive difference in take-home pay. This is often overlooked but incredibly important.
No State Income Tax:
- • Texas (Austin, Dallas, Houston)
- • Florida (Miami, Tampa, Orlando)
- • Washington (Seattle)
- • Nevada (Las Vegas, Reno)
- • Tennessee (Nashville)
- • Wyoming, Alaska, South Dakota
Highest State Tax Rates:
- • California: Up to 13.3%
- • New York: Up to 10.9%
- • New Jersey: Up to 10.75%
- • Oregon: Up to 9.9%
- • Minnesota: Up to 9.85%
Tax Impact Example (on $150K salary):
→ That's nearly $20K/year difference in take-home pay!
3. Transportation ($200-$1,200/month)
Car ownership vs. public transit makes a huge difference in monthly expenses.
Car-Dependent Cities (Higher Cost):
Los Angeles, Houston, Phoenix, Dallas, Atlanta
Public Transit Cities (Lower Cost):
NYC, San Francisco, Chicago, Boston, DC
4. Food & Groceries (10-15% of budget)
Eating out and grocery costs vary significantly by city.
Monthly Food Budget (Single Person):
5. Healthcare (Variable)
Healthcare costs don't vary as much by city, but they're still significant and often overlooked.
What to consider:
- Insurance premiums (employer-provided vs. out-of-pocket)
- Deductibles and out-of-pocket maximums
- Provider network quality in your new city
- Proximity to quality medical facilities
Quality of Life Factors (The Intangibles)
Cost of living isn't just about money—it's about lifestyle. Consider these factors:
Climate & Weather
Do you prefer year-round sunshine (Austin, Miami) or four seasons (NYC, Chicago)? Can you handle extreme heat or cold?
Commute Times
A $10K salary bump isn't worth 2+ hours daily commuting. Factor in time as a cost.
Social & Cultural Scene
Does the city match your lifestyle? Arts, music, nightlife, outdoor activities, diversity.
Family Considerations
School quality, childcare costs, proximity to family, family-friendly neighborhoods.
Career Opportunities
Is this a one-company town or a thriving job market? What if your job doesn't work out?
Housing Market Stability
Are you comfortable with the local real estate market if you plan to buy? Consider long-term appreciation.
How to Calculate Equivalent Salaries
Simple COL Adjustment Formula
Equivalent Salary = (Current Salary) × (New City COL Index) / (Current City COL Index)
Example: $120K in San Francisco → Austin equivalent
= $120K × (Austin COL: 119) / (SF COL: 244) = $58,525
Real Example: Two Offers
Offer A: San Francisco
Offer B: Austin
Result: The "$180K SF job" leaves you with similar purchasing power as the "$140K Austin job"—but Austin has $40K less in salary. However, SF might offer better long-term career growth and higher lifetime earnings.
The Remote Work Arbitrage Opportunity
Geographic arbitrage: Earn a high-COL city salary while living in a low-COL city.
Example: Earn $150K from a San Francisco company while living in Austin, Boise, or Nashville. You get the high salary without the high expenses.
⚠️ Caveat: Many companies adjust salaries based on location. Ask about location-based comp policies before relocating.
Common COL Mistakes
❌ Only Looking at Housing Costs
Taxes, transportation, and food all matter. Calculate total cost of living, not just rent.
❌ Ignoring Quality of Life
The "cheapest city" might not be worth it if you hate the weather, culture, or commute times.
❌ Not Factoring in Career Growth
A lower salary in a major tech hub (SF, NYC, Seattle) might lead to faster career growth and higher lifetime earnings than a higher salary in a smaller market.
Tools to Compare Cities
Key Takeaways
- ✅ A dollar isn't a dollar everywhere - Adjust salary for location
- ✅ Taxes matter enormously - No state tax can be worth $10K-$20K/year
- ✅ Housing is the biggest factor - But don't ignore transportation and food
- ✅ Consider quality of life - Money isn't everything; lifestyle matters
- ✅ Remote work = arbitrage opportunity - Earn big-city salaries in low-cost areas
- ✅ Think long-term - Career growth opportunities matter for lifetime earnings
Ready to Compare Cities?
Use our cost of living calculator to see how salaries compare across different locations.
Calculate COL Adjustment