It should come as no surprise that living in a major city is often pricey. Your cost of living is impacted by everything from housing costs to gasoline, utilities, and even food prices–and when you live in a metropolitan area, you can expect that these expenses will be significantly higher than the surrounding suburban areas.

Of course, the higher your cost of living, the more income you’ll need to pay your bills, save for retirement, and stay out of debt. So, just how much do you need to earn in order to live comfortably in some of America’s biggest cities?

Let’s take a look at the impact of living in a higher-cost-of-living area, as well as some ways that you can mitigate those elevated expenses. Then, we’ll look at the numbers for some major cities that probably won’t surprise you… as well as a few that might be more affordable than you think.

Cost of Living and Your Quality of Life

As you’d probably expect, a cost of living index indicates the amount you need to earn in order to maintain certain lifestyle standards in any particular area. This number includes expenses such as your

  • Housing costs
  • Taxes
  • Food
  • Healthcare
  • Transportation
  • Entertainment

This index takes into account the average and median expenses for each of these categories to calculate just how much an area’s residents can expect to spend annually. You can also use these numbers to determine whether or not you could comfortably move to a new city while still maintaining your current lifestyle.

Of course, everyone’s standards are different, so this can affect your numbers in either direction. For instance, there’s a big difference between renting a one-bedroom bachelor pad in the city, and requiring a four-bedroom home with a yard for your family. Or, you may choose to commute to work in your own vehicle each day, versus utilizing your local public transport system.

Still, an area’s cost of living (COL) calculation can help you get an idea of what to expect when considering a move. Even though your own numbers will probably be quite different, you can use the COL of one city against that of another, gauging whether your expenses are likely to increase or not.

This could help you negotiate a starting benefits package with a new company, make pre-emptive adjustments to your budget and spending, or even shift your lifestyle expectations.

Before making a move to a new area, you should take a good look at your current quality of life and the expenses that are most important to you. For some, this might mean a larger home with more space, or maintaining a personal vehicle. For others, it might be more important to have money each month for dining out, catching shows, or enjoying other local entertainment options.

Then, when you are researching potential cities, look at both the overall cost of living index as well as individual expense averages. This will give you a more defined view of how you can expect your quality of life to be impacted following a big move.

Why City Living Often Costs More

While it’s not always the case, you can usually expect that city living will mean an uptick in expenses. Most of these come from housing, as affordable homes tend to cost more per square foot in urban neighborhoods than they do in suburban and rural areas. Often, this is simply a result of supply-and-demand: with a city’s denser population comes a higher demand for the housing options therein, typically driving prices upward.

Housing isn’t the only place you will feel the pinch when moving into the city, though. You’ll often encounter higher prices on things like:

  • Parking and gasoline
  • Groceries
  • Childcare
  • Basic services, such as dry cleaning and haircuts
  • Utilities

While this across-the-board higher cost of living isn’t true for every city in the nation, it is true for most of the larger metropolitan areas.

How Much You Need to Live Comfortably

Everyone’s definition of comfortable is different. For some people, this means being completely debt-free and achieving financial freedom. To others, it might simply mean paying the bills and having a little fun money left over at the end of the month.

For others still, it might mean saving 20% of their income and spending less than 50% on total housing costs (a great rule of thumb). But while the 50-30-20 rule works for most people, it might simply be unattainable for those living in big, expensive cities where housing costs are disproportionately higher than other living expenses.

In April 2019, the median home listing price in the U.S. was $226,800. While this doesn’t tell the whole picture–after all, the median home price in West Virginia was only $96,300 and in Hawaii, it was $616,000–it does give us a general idea of what a home will cost.

Then, let’s look at everyday expenses.

A family of four can expect to pay around $289 per week on groceries if shopping liberally, according to the USDA. This comes out to about $15,000 a year. For gasoline, the average sedan driver will shell out just under $1,200 per year.

While the Department of Health and Human Services recommends that families spend no more than 7% of their income on childcare expenses, the average family actually spends over $9,000 a year. This amounts to more than 14% of most families’ income.

Lastly, let’s keep in mind that the national median household income in 2018 was $61,937, according to data.

Achieving Comfort in America’s Biggest Cities

So, just how much more will you need to spend in the city, if you want to reach the same comfort level found in the suburbs?

Here’s a look at a few of the country’s biggest cities, and how much you would need to earn there, according to a recent study from GOBankingRates.

Chicago, IL

The Windy City is, surprisingly, one of the more affordable big cities in which to live. While the population there is the third-largest in the country, the cost of living isn’t nearly as high as other, smaller cities on the list.

To live comfortably in Chicago–factoring in housing costs, transportation, utilities, and groceries–you’ll need to make around $94,917 as a renter or $84,765 as a homeowner. Unfortunately for many Chicagoans, the median income in the city is only $52,497, leaving a discrepancy of at least $32,000 on average.

Philadelphia, PA

It may be the City of Brotherly Love, but the price tag for living in Philadelphia is anything but loving. Here, you’ll need to earn around $82,439 as a renter or $92,639 as a homeowner in order to live comfortably. However, the median income in the city is a mere $40,649 less than half the average cost of living!

Tuscon, AZ

First, I’ll give you the good news about living in Tuscon: you only need $74,070 as a renter and $72,870 as a homeowner in order to live comfortably in the city.

Now the bad news: the median income in Tuscon is a paltry $39,617 well below the national average and nearly half of what you actually need to be making in order to live here.

San Diego, CA

You probably aren’t surprised to see California cities on this list–the state is known for its outrageous housing costs, among other elevated living expenses. However, the actual numbers might be enough to scare you away from ever moving to the Golden State.

In San Diego, the median income is $71,535. This seems like an impressive number–and well above the national average–until you look at the average cost of living: here, you would need $120,786 as a renter and $137,826 as a homeowner in order to live comfortably.

Virginia Beach, VA

Not all big cities bring bad news for residents and their incomes. Take Virginia Beach, for example.

Here, residents pull in a median income of $70,500, which is notably higher than the national average. To live comfortably, you’d only need $87,328 as a renter and $83,176 as a homeowner a much smaller delta than in most of the other big cities.

But while Virginia Beach is the largest city in the entire state of Virginia, many people would exclude it from the big cities in America list. When compared to cities like New York, with a population of over 8 million, it’s easy to see why.

San Francisco, CA

Another California city? I know, I know, you’re just as shocked as I am.

In San Fran, the mean income is a shocking $96,265 annually, which would take you pretty far in most other cities in America. Here, though, it won’t make nearly as much of a dent in the cost of living: you’d need $164,214 as a renter and $230,286 as a homeowner to cover your expenses.

Kansas City, MO

In Kansas City, residents won’t feel the cost-of-living pinch quite as badly as their fellow big city counterparts. Here, the median income is a modest $50,136, but you’ll only need $67,647 as a homeowner and $72,303 as a renter in order to live comfortably.

Yes, there is still a delta between income and cost of living, but it’s notably smaller than in many of the other big cities we’ve seen.

Washington, D.C.

As a northern Virginia resident, Washington, D.C. is near (though not always dear) to my heart. It certainly is pricey to live here, though!

In D.C., residents earn a median income of $77,649 per year. However, they need $122,934 as renters and $142,230 as homeowners in order to live here comfortably.

New York, NY

Ever felt like you needed to earn double–or even triple–your income in order to get ahead? Then you might live in New York City.

In the Big Apple, residents earn a median income of only $57,782, which is just shy of the national average. However, the cost of living here is exponentially higher: $128,552 for renters and a painful $148,448 for homeowners nearly triple what residents are actually earning each year.

Miami, FL

You might be as shocked as I was to learn that Miami is actually more expensive to live in (proportionately) than NYC or many of the California cities on this list.

Here, the median income is well below the national average, sitting at only $33,999. However, you’d need to earn $104,965 as a homeowner and $109,525 as a renter in order to get by. This is more than three times what most people are earning annually.

Is Big City Living for You?

For many people, the cost of living in a big city is justified. It might be your preferred way of life, or you may be able to snag a job that more than compensates you for the higher living expenses.

For others, though, residing within a metropolitan area could be outside your means at least, if you want to live comfortably. Considering that in almost all big cities, living expenses–from housing costs to transportation, food, and childcare costs–are disproportionately higher, it might be simply too hard to make ends meet.

It’s important to take a look at your family’s income, expenses, and priorities to determine where you can live comfortably. Not everyone can follow a budgeting guideline like the 50-30-20 rule, especially if living in an urban area. However, if it’s important to you to live in the middle of the city, it might simply be a matter of adjusting your financial priorities in order to make it work.


  • Stephanie Colestock

    Stephanie Colestock is a respected financial writer based in Washington, DC. Her work can be found on sites such as Investopedia, Credit Karma, Quicken, The Balance, Motley Fool, and more, covering a range of topics such as family finances, planning for the future, optimizing credit, and getting out of debt.