How do you calculate cost of living?

Compare price levels across categories like housing, groceries, utilities, and transportation, index each city against a national average of 100, and combine them into an overall score.

What is the most important cost of living factor?

Housing, by far. It is the largest household expense and varies the most between cities, so it drives most of the difference in any comparison.

Cost of Living Comparison: How Two Cities Really Stack Up

Comparing two cities is about more than rent. Here is what a fair comparison includes and how to read it.

A fair cost of living comparison weighs housing, groceries, utilities, and transportation, indexed against a national average of 100. Housing drives most of the gap between cities, while groceries and utilities vary far less. Compare any two cities and the salary that bridges them with the free cost of living calculator.

What goes into a fair comparison

A real comparison covers the big four: housing, groceries, utilities, and transportation. Housing is usually weighted most because it is the largest household expense and the most variable between cities.

Each category gets an index number where 100 equals the national average. A housing index of 290 means housing costs nearly triple the national average; a grocery index of 104 means 4 percent above. The overall index blends them into one number.

Why housing dominates the index

Housing explains most of the gap between expensive and affordable cities. New York's overall index of 175 is driven by a housing index near 290; its grocery index of 115 barely moves the needle by comparison.

This is why two cities with similar overall scores can feel different. The city with cheaper housing usually wins for renters and buyers, even if its groceries cost a bit more.

How to use the comparison when job hunting

Convert every offer to your current city's dollars before comparing. A $140,000 offer in San Francisco is worth less than a $100,000 offer in Houston once housing is priced in.

Negotiate with the ratio, not the raw number. If the target city's index is 40 percent higher, asking for a 40 percent raise over your current salary just keeps you even; aim above it to actually get ahead.