It’s no secret that the cost of living is rising in the US, especially true in our biggest cities. If you’re dreaming of living comfortably in one of these urban metropolises, you’ll need to make sure you have the right salary to support your lifestyle.
In this blog post, we’ll take a look at the latest data on how much salary you need to live comfortably in the 25 largest metro areas in the United States. We’ll also provide some tips for budgeting during inflation, so you can make the most of your money.
Cost of Living Comfortably Rising!
According to the Bureau of Labor Statistics, the consumer price index (CPI) rose 8.5% year-over-year in March 2023. This means that the cost of everyday goods and services is rising at a much faster pace than wages.
This is making it increasingly difficult for Americans to afford the basics, such as housing, food, and transportation. In fact, a recent study by SmartAsset found that the average after-tax income needed to live comfortably in the 25 largest metro areas in the United States increased by 20% from 2022 to 2023.
How Much Salary Do You Need for Living Comfortably?
So, how much salary do you need to live comfortably in a big city? The answer depends on a number of factors, including the specific city you want to live in, your lifestyle, and your family size.
However, as a general rule of thumb, you can expect to need an after-tax income of at least $68,499 to live comfortably in one of the 25 largest metro areas in the United States. This figure is based on the 50/30/20 rule, which allocates 50% of your after-tax income to needs (such as housing, food, and transportation), 30% to wants (such as dining out and entertainment), and 20% to savings and debt payments.
Most Expensive and Affordable Cities in the US (2023)
| Rank | City | State(s) | After-Tax Salary Needed ( Living Comfortably ) | Change from 2022 (%) |
|---|---|---|---|---|
| 1 | San Francisco-Oakland-Berkeley, CA | CA | $84,026 | 13.12% |
| 2 | San Diego-Chula Vista-Carlsbad, CA | CA | $79,324 | 21.32% |
| 3 | Boston-Cambridge-Newton, MA | MA, NH | $78,752 | 15.98% |
| 4 | New York-Newark-Jersey City, NY-NJ-PA | NY, NJ, PA | $78,524 | 13.94% |
| 5 | Seattle-Tacoma-Bellevue, WA | WA | $77,634 | 16.52% |
| 6 | Los Angeles-Long Beach-Anaheim, CA | CA | $76,809 | 19.64% |
| 7 | Washington-Arlington-Alexandria, DC-VA-MD-WV | DC, VA, MD, WV | $76,034 | 14.12% |
| 8 | Miami-Fort Lauderdale-West Palm Beach, FL | FL | $75,397 | 12.95% |
| 9 | Chicago-Naperville-Joliet, IL-IN | IL, IN | $73,901 | 17.54% |
| 10 | Denver-Aurora-Lakewood, CO | CO | $73,670 | 18.39% |
| 21 | Atlanta-Sandy Springs-Roswell, GA | GA | $65,960 | 16.62% |
| 22 | Dallas-Fort Worth-Arlington, TX | TX | $65,273 | 17.72% |
| 23 | Minneapolis-St. Paul-Bloomington, MN-WI | MN, WI | $64,725 | 18.21% |
| 24 | Austin-Round Rock-Georgetown, TX | TX | $64,610 | 22.73% |
| 25 | Houston-The Woodlands-Sugar Land, TX | TX | $64,302 | 19.25% |
| Most Affordable | City | State(s) | After-Tax Salary Needed (Living comfortably) | Change from 2022 (%) |
| 1 | St. Louis, MO-IL | MO, IL | $57,446 | 3.01% |
| 2 | Detroit-Warren-Dearborn, MI | MI | $58,358 | 24.39% |
| 3 | San Antonio-New Braunfels, TX | TX | $59,270 | 16.27% |
| 4 | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | PA, NJ, DE, MD | $61,678 | 14.92% |
| 5 | Charlotte-Concord-Gastonia, NC-SC | NC, SC | $62,110 | 15.43% |
| 6 | Memphis, TN-MS-AR | TN, MS, AR | $62,239 | 17.07% |
| 7 | Indianapolis-Carmel-Anderson, IN | IN | $62,595 | 16.14% |
| 8 | Columbus, OH | OH | $62,685 | 15.29% |
| 9 | Cincinnati-Middletown, OH-KY-IN | OH, KY, IN | $62,741 | 14.83% |
| 10 | Pittsburgh, PA | PA | $62,919 | 14.02% |
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The Five Most Expensive Cities
The five most expensive cities for living comfortably in are:
- San Francisco-Oakland-Berkeley, CA: $84,026
- San Diego-Chula Vista-Carlsbad, CA: $79,324
- Boston-Cambridge-Newton, MA: $78,752
- New York-Newark-Jersey City, NY-NJ-PA: $78,524
- Seattle-Tacoma-Bellevue, WA: $77,634
As you can see, it takes a significant salary to live comfortably in these cities. If you’re thinking about moving to one of these areas, it’s important to do your research and make sure you can afford the lifestyle.
The Five Most Affordable Cities
The five most affordable cities for Living comfortably in are:
- St. Louis, MO-IL: $57,446
- Detroit-Warren-Dearborn, MI: $58,358
- San Antonio-New Braunfels, TX: $59,270
- Philadelphia-Camden-Wilmington, PA-NJ-DE-MD: $61,678
- Charlotte-Concord-Gastonia, NC-SC: $62,110
These cities are much more affordable than the ones at the top of the list. However, it’s important to keep in mind that the cost of living can vary significantly within a metro area. So, if you’re thinking about moving to one of these cities, be sure to research the specific neighborhood you’re interested in.
Also read: Best Countries to Raising your Kids
Tips for Budgeting During Inflation
Navigating the tumultuous waters of inflation can often feel like steering a small boat through a storm. As prices rise and salaries struggle to keep pace, maintaining a comfortable lifestyle demands a strategic approach to budgeting. Here are some expert tips to empower you in tightening your financial belt, weathering the inflation wave, and achieving your financial goals:
1. Understand Your Spending: Knowledge is your greatest asset. Before making cuts, gain insight into your financial landscape. Utilize budgeting apps, spreadsheets, or a traditional notebook to meticulously track your income and expenses for at least a month. Categorize spending areas, such as housing, groceries, and entertainment, to identify potential areas for cutbacks.
Also Read: 10 method to Budget Your Christmas Expenses
2. Embrace the 50/30/20 Rule: Allocate your income wisely by following this rule—50% to essential needs (housing, food, utilities), 30% to discretionary spending (dining out, hobbies, entertainment), and 20% to savings and debt repayment. While these percentages can be adjusted based on your situation, the principle remains a valuable guide.
3. Trim Unnecessary Expenses: Scrutinize spending categories and ruthlessly eliminate unnecessary costs. Are there unused streaming services subscriptions or opportunities to switch to a more affordable phone plan? Consider cooking more meals at home instead of dining out. Every small adjustment contributes to overall savings.
4. Negotiate Bills and Subscriptions: Reach out to service providers, like cable companies or gym memberships, to negotiate lower rates. Polite inquiries and willingness to explore alternatives can yield surprising results. Consider downgrading plans or shopping around for better deals.
5. Innovate in Groceries: Grocery bills can be a significant drain. Embrace meal planning, cook with seasonal ingredients, opt for store-brand staples, compare prices across different supermarkets, and leverage coupons and loyalty programs. Evaluate bulk memberships for frequently used items based on storage and consumption needs.
6. Embrace a DIY Spirit: Learn basic repair skills, from mending clothes to fixing leaky faucets, to avoid unnecessary spending on professional services. This not only saves money but also fosters valuable self-reliance.
7. Boost Your Income: Explore ways to increase your income, such as taking on a side hustle, requesting a raise at your current job, or freelancing your skills. Every additional dollar strengthens your financial resilience.
8. Prioritize Savings and Debt Repayment: Guard your long-term goals against inflation by making small, consistent contributions to savings or debt repayment. Automate deposits to stay on track and resist the urge to dip into these funds.
9. Seek Professional Guidance: If overwhelmed, consider seeking professional help. A financial advisor can assist in creating a personalized budget, making wise investment decisions, and navigating complex financial choices.
10. Prioritize Flexibility: In unpredictable times, adhere to a flexible spending plan. Allow room for occasional adjustments within your overall financial framework to accommodate unexpected expenses.
11. Stay Informed: Keep abreast of economic trends and inflation forecasts. This knowledge empowers you to make informed decisions about spending and adjust your budget accordingly.
12. Stay Positive: Budgeting during inflation can be stressful, but remember, you’re not alone. Many face similar challenges. Stay optimistic, maintain healthy financial habits, and celebrate wins, no matter how small. With focused effort and smart budgeting, you can weather the storm and emerge stronger financially.
By adopting these tips and cultivating a mindful approach to your finances, you can effectively navigate inflation and build a secure financial future. Remember, budgeting is a marathon, not a sprint. Be patient, stay consistent, and celebrate progress along the way. Best of luck!”
Conclusion: Navigating the Costly Seas of Urban Living
In the ever-evolving landscape of the United States, the rising cost of living poses a significant challenge, especially in its sprawling urban centers. Aspirations of living comfortably in these metropolises require a keen understanding of the financial currents. Our exploration into the latest data on the 25 largest metro areas unveils a stark reality – the consumer price index surged by 8.5% year-over-year in March 2023, outpacing the growth of wages and making it progressively harder for individuals to afford essential needs.
The key to living comfortably amidst these financial challenges lies in strategic budgeting. Our analysis suggests that, as a general guideline, an after-tax income of at least $68,499 is necessary to fulfill the 50/30/20 rule, allocating funds to needs, wants, and savings respectively. The presented list of the most expensive and affordable cities underscores the financial diversity across the nation, with San Francisco leading the chart at $84,026 and St. Louis offering a more affordable option at $57,446.
In conclusion, the journey to living comfortably in the face of inflationary pressures demands both financial prudence and a realistic assessment of one’s resources. As the economic tide continues to ebb and flow, individuals must remain agile in their budgeting strategies, adapting to unforeseen challenges while keeping the goal of financial security in sight.