Location, location, location. It matters when you’re choosing where to live, how much you earn, and what your overall cost of living will be. In some cities, the cost of living is extremely high simply because renting an apartment or buying a house costs exorbitantly more than it does in other cities. In others, housing is cheaper, allowing your paycheck to stretch further.
To explore this in detail, Glassdoor wanted to see if there is a definite relationship between location, housing costs, and how much of your paycheck you get to keep after paying for a place to live every month. If you’re spending 30%, 40%, or 50% of your income just to put a roof over your head, you’ll obviously have less money left over to go toward your monthly expenses, not to mention your savings account. As it turns out, housing costs tend to be the largest factor in determining how much money you’ll get to keep after paying your bills — even more than the size of the paycheck itself.
Glassdoor ranked the 50 most populous cities in the United States based on each city’s cost of living ratio, which they determined by the ratio of median annual base salary to median metro home value. (A higher ratio is better for your bank account.) Though paychecks are higher in some of the largest cities in the nation, Glassdoor found that it can’t compensate enough for the extremely expensive housing markets that often come with them. “This report shows that where you live and how much you earn are directly tied to one another,” said Andrew Chamberlain, Glassdoor’s chief economist, in a release. “Though there are certainly other financial factors to consider when taking into account total cost of living, this data reinforces that pay typically goes further in mid-sized cities versus big metropolitan areas where there is often tighter competition for housing.”
If you’re looking to move to a new city, or simply want to see how your home stacks up, take a look at the 25 cities where your paycheck will stretch the furthest.