Have you just received a job offer from another city? That's great news! However, before saying yes and preparing to move, it is important to consider the cost of living in the potential new city.
The cost of living significantly differs from one city to another. Your anticipated salary increase might not necessarily translate to greater purchasing power due to local expenses like accommodation, taxes, and healthcare.
The concept of cost of living encapsulates all the expenditures needed to sustain your standard of living in a particular location. Housing, unsurprisingly, often takes the biggest slice of the household budget pie. According to U.S. Bureau of Labor Statistics data from 2023, an average of 32.9% of household spending was allocated to housing, outperforming other costs like food (12.9%) and healthcare (8.0%).
The variance in housing prices across the United States is striking. For rental property, the difference can also be significant. For example, as of July 2025, the average rent in San Francisco was $3,500 while in Des Moines, Iowa, it was as low as $975.
Taxes also play a pivotal role in determining the cost of living in a city or state. This can be complex to compare as states can balance low income tax with high sales or property taxes and vice versa.
Online calculators can be used to compare cost of living between two locations. For instance, a calculator on Payscale indicates that to maintain the same living standard, a Des Moines resident earning $50,000 would need to generate at least $96,893 in San Francisco. Conversely, a person earning $50,000 in San Francisco could live equally well in Des Moines on a mere $25,802.
Before jumping for a job offer in a new location, always compare housing and taxes, use cost-of-living calculators, and focus on take-home pay, not just the base salary. This data can be used as leverage in negotiations for a higher salary or relocation assistance. A carefully considered decision could transform a potentially losing or break-even proposition into a successful venture.