Ever find yourself dreaming about relocating, perhaps when a list of the best places to live in the U.S. is dropped? If a certain city strikes your fancy, could you actually afford to live there? To live comfortably anywhere, you need to balance daily necessities, discretionary spending and long-term savings. This balance is often framed by the "50/30/20 budget rule"—allocating 50% of income to needs, 30% to wants and 20% to savings or debt repayment. However, achieving this balance is increasingly challenging in many metropolitan areas due to rising living costs.
A new SmartAsset study, completed using the MIT Living Wage Calculator, found that in most large U.S. cities, the income required to live comfortably surpasses the national median household income of $80,610. A single adult typically needs at least $85,000 annually, while a family of four often requires nearly $200,000.
The study reveals some interesting findings about affordability in the U.S. Indianapolis stands out as the most affordable major city for a single adult to live comfortably, with a required salary of $85,197. However, for a family of four, the needed salary jumps to $222,726—considerably higher than the city's median household income of $66,629. Memphis, TN, requires the lowest household income to support a family of four at $198,349. Meanwhile, San Jose, CA, now surpasses New York City for the highest salary needed to live comfortably. A single adult in San Jose must earn $147,430, while New York City's requirement is slightly lower at $136,656.
Find the full study here, or check out your options using the Living Wage Calculator.
What is the MIT Living Wage Calculator?
The MIT Living Wage Calculator is a valuable tool for assessing local cost-of-living standards that can help individuals and employers understand the financial realities of maintaining a stable, comfortable lifestyle in different regions. It estimates the cost of living in a community or region based on typical expenses including housing, food, transportation and income taxes. The calculator is regularly updated to reflect the most recent data available. MIT defines the living wage as "the hourly rate that an individual in a household must earn to support themselves and/or their family, working full-time, or 2,080 hours per year."
The cost of living in major U.S. cities
Cities with the lowest salary needed to live comfortably as a single adult
1 Indianapolis, Indiana $85,197
2 Oklahoma City, Oklahoma $85,446
3 Tulsa, Oklahoma $85,571
4 New Orleans, Louisiana $86,445
5 Albuquerque, New Mexico $86,611
Cities with the highest salary needed to live comfortably as a single adult
95 Boston, Massachusetts $133,578
96 Anaheim, California $133,952
97 Irvine, California $133,952
98 Santa Ana, California $133,952
99 New York, New York $136,656
100 San Jose, California $147,430