Many factors influence where we choose to live. While our home's proximity to friends and family is a crucial deciding factor, ultimately where we decide to live is influenced by our finances. The two major factors influencing where we live are the cost of living and the income potential in a given region. The problem with looking at these two factors individually, however, is that they often are highly influenced by one another and have a strong positive correlation. Fat paychecks in New York City and San Francisco translate into $20 salads, exorbitant rents, and surge-priced Uber rides.
When we analyze the data, it’s apparent that the most affordable cities to live in while earning an excellent living are in the middle of the country, rather than along the expensive coasts. We’ve compiled a list of the best cities in the United States that combine a low cost of living with relatively high per capita income compared with the rest of the nation.
- The best cities in the United States that combine a low cost of living with high wages are in the middle of the country and not along the high-priced coasts.
- Houston's strong economy boasts job growth in information technology, biomedicine, and aeronautics; wages are also increasing and outpacing the area's relatively low cost of living.
- Low housing prices are a big draw for Charlotte, North Carolina, which has become one of the leading financial and banking centers in the United States.
- Denver is known for its quality of life, natural beauty, and stable economy with job growth in technology, telecommunications, and energy.
The city of Houston benefits from a high domestic migration rate and a high economic growth rate. According to the Census Bureau’s 2017 population estimates (the most recent data available from the Census Bureau), Texas has experienced the nation's largest population growth for each year between 2010 and 2016. The Texas State Demographic Center, which produces annual population estimates for the state and its counties, estimates the population for Texas is 28.7 million people as of July 1, 2018. The state added over 3.55 million people between 2010 and 2018, an increase of 14.9%.
Houston is one of the state's leading areas of population growth, primarily due to its resilient economy. While Houston is well-known as a major oil town, the city has seen job growth in a variety of sectors, including information technology, biomedicine, aeronautics, and manufacturing. Houston’s median household income was $66,552 in 2019. Houston residents' income levels typically outpace the cost of living, with a fabulous transportation system, relatively affordable housing, and low prices of common consumer goods.
Dallas-Fort Worth, Texas
The Dallas-Forth Worth hub also lies in the Sunbelt. The city benefits from high net domestic migration and a nonexistent state income tax.
In a cost of living comparison between Dallas and Los Angeles, you would need an income of around $6,569 per month in Los Angeles, California, to maintain the same standard of life that you can have with $4,500 per month in Dallas, Texas. The cost of living in Los Angeles is approximately 46% higher than in Dallas. The most significant differences between the two cities are rent prices, which are 56.17% lower in Dallas than in Los Angeles.
Charlotte, North Carolina
Charlotte may seem off the beaten path to some, but to North Carolinians and Southerners who’ve grown up loving the city, the move seems like a no-brainer. Charlotte is a major U.S. financial center and is the headquarters of Bank of America. Other major industries include motorsports and energy. The city is home to the NASCAR Hall of Fame and boasts its own NFL football team, the Carolina Panthers.
According to Forbes' 2019 ranking of the best places for business and careers in the United States, Charlotte's median household income is $62,765. Housing costs are a key factor in Charlotte's affordability, with the median home price coming in at $250,000. Housing costs are 84% lower in Charlotte compared to New York City.
Denver is a gorgeous, relatively quiet city situated in the mountains. Downtown is a short half-hour drive from the University of Colorado at Boulder. Many beautiful, smaller towns are in the region, where people can hike with their dogs and families free of charge.
According to the Massachusetts Institute of Technology’s Living Wage Calculator as of Jan. 2020, a typical annual salary in Denver for a management job is $129,155. Business and financial operations workers typically earn a salary of $74,437. The calculated “living wage” that individuals must earn to support themselves working full time was $14.26 an hour as opposed to $20.82 in San Francisco. In addition to high wages, Colorado offers a high quality of life which continues to attract lovers of nature and adventure.
Dubbed “The Live Music Capital of the World” and the capital of the Lone Star State, Austin had job growth of 3.3% in 2018 and a population of about 2.2 million. The knowledge hub of Austin is home to a new wave of workers who vary from “hippie types” to tech-savvy millennials and corporate employees. The influence of the University of Texas has turned the city into a tech hub with a lively downtown full of theaters, art galleries, and restaurants.
According to Forbes, in 2019 the median household income in Austin was $76,845 and the median home price came in at $325,000. A typical annual salary in Austin for a management job is $104,200 and $87,763 for a job in information technology.
The Bottom Line
Career mobility is rising due to the advent of technology, transportation, and communication systems, allowing the U.S. population to move from city to city quite easily. Often, high salaries coincide with a relatively high cost of living. This list of cities highlights a few of the outliers.
Cities in the middle of the country, particularly in Texas, place workers in an optimal financial situation. This is due to the net migration, economic boom, and high salary growth rates in these particular hubs. These cities offer a high quality of life due to low prices and decreased financial stresses while providing an opportunity to find a lucrative career.