Home > Personal Finance > 10 Cities Where Your Paycheck Goes the Furthest

Comments 0 Comments

Many people dream of living in New York or Los Angeles—rubbing shoulders with celebrities and Instagramming food from the hottest restaurants. They dream of flashy jobs and fat paychecks.

That is, until they scroll through Craigslist or Zillow and determine they could never afford a fourth-floor walk-up above a noisy bar, let alone afford to buy a house in such an expensive city.

If “they” is really “you,” you might want to consider a midsize city where your paycheck will go the furthest.

10 Cities with Excellent Cost-of-Living Ratios

For this list, we turned to a recent report by Glassdoor, which looked at salaries and housing costs for the 50 most populated metro areas across the US.

With that data, Glassdoor determined each city’s cost-of-living ratio—the median annual base salary divided by the median home value.

The results show that where you live and how much you make are directly related.

“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 [midsize] cities versus big metropolitan areas, where there is often tighter competition for housing,” said Dr. Andrew Chamberlain, Glassdoor’s chief economist.

It probably won’t surprise you that New York City, Boston, and San Francisco fared poorly, with ratios of 18%, 17%, and 11%, respectively. Some of the winners might surprise you, though. Here are the 10 cities where your paycheck will go the furthest.

10. Louisville, Kentucky

  • Cost-of-Living Ratio: 39%
  • Median Base Salary: $54,000
  • Median Home Value: $137,500

When most people think of Louisville, they think of big hats and baseball bats. But this city has a lot more going for it—not least of all is its southern charm.

UPS employs more than 20,000 people here, and the city has become a major center for the health care and medical sciences industries—both of which are growing fields with good pay.

9. Kansas City, Missouri

  • Cost-of-Living Ratio: 39%
  • Median Base Salary: $58,000
  • Median Home Value: $147,500

Kansas City has the most expensive homes on the list and the second-highest salaries. You’ll find friendly people and a lot of love for the local baseball team here.

Jobs are available in health care, education, and government, and companies such as Garmin, Hallmark, and Sprint have headquarters in the larger Kansas City metro area.

8. Birmingham, Alabama

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $50,800
  • Median Home Value: $128,000

If you love barbecue, you’ll love Alabama. And Birmingham offers excellent restaurants, easy access to the outdoors, and passionate college football fans.

Its biggest industries are banking and insurance, health care, and logistics and transportation. Major employers include the University of Alabama at Birmingham, Regions Financial Corporation, Honda, and Mercedes-Benz.

7. Cincinnati, Ohio

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $57,179
  • Median Home Value: $143,400

Even though I’m a Michigan grad and therefore not supposed to like Ohio, I have a soft spot for Cincy. My favorite activity is wandering the scenic riverfront park and then having a picnic while I watch the boats sail past.

Procter & Gamble, the University of Cincinnati, and Kroger are major employers here.

6. St. Louis, Missouri

  • Cost-of-Living Ratio: 40%
  • Median Base Salary: $56,896
  • Median Home Value: $141,900

How aren’t more people flocking to St. Louis? This city’s got it going on.

Thanks to its large student population, it has a bumping nightlife and lots of nice cafes. Another highlight is the City Museum, which is basically a jungle gym for adults and kids.

Big industries include biotech and health care, and Boeing employs more than 15,000 people in the area.

5. Indianapolis, Indiana

  • Cost-of-Living Ratio: 43%
  • Median Base Salary: $56,000
  • Median Home Value: $130,200

My friend’s dad—a well-traveled person—calls Indianapolis his favorite city. Although I’ll never fully understand that, I can see why it’s appealing.

I lived in this affordable city during middle school, and it offers midwestern values, a healthy population of young people, quality sports teams, and a convenient location in the heart of the country.

Its major industries include health care, education, finance, and tourism.

4. Cleveland, Ohio

  • Cost-of-Living Ratio: 44%
  • Median Base Salary: $55,000
  • Median Home Value: $125,500

Downtown Cleveland is cool—and not just because it’s home to the Rock & Roll Hall of Fame. There’s a fun and active culture about the city, as evidenced by the many restaurants on the walkable East 4th Street.

Cleveland’s major industries are advanced manufacturing and health care.

3. Pittsburgh, Pennsylvania

  • Cost-of-Living Ratio: 45%
  • Median Base Salary: $56,896
  • Median Home Value: $126,700

With American Eagle, GNC, and Dick’s Sporting Goods headquartered in the area, in addition to several manufacturing and steel companies, incomes are good in Pittsburgh.

So if you want to be in the Northeast and close to major cities such as Philadelphia, New York, Boston, and Washington, DC, Pittsburgh makes an excellent home base.

2. Memphis, Tennessee

  • Cost-of-Living Ratio: 46%
  • Median Base Salary: $52,000
  • Median Home Value: $112,100

The birthplace of rock ’n’ roll has a lot going for it: a vibrant culture, mild winters, and excellent southern cooking. With a median home value of just over $110K—the lowest on this list—it’s clear you can get a lot for your money here.

Major employers include FedEx, International Paper, AutoZone, and St. Jude’s Children’s Research Hospital.

1. Detroit, Michigan

  • Cost-of-Living Ratio: 50%
  • Median Base Salary: $61,500
  • Median Home Value: $123,100

Detroit is on the upswing. I went to college nearby, and I know many people who moved back and are passionate about the city’s growth and success.

Quicken Loans and General Motors have headquarters here, and other major industries with employment potential include health care, finance, and government.

How Major Expenses and Income Affect the Cost of Living

Although I’ve written before about the most affordable cities in the US, Glassdoor’s report provides a new angle on the issue by including income—because the combination of low-cost homes and decent incomes makes a compelling argument for midsize cities. Even if you take steps to drastically reduce your cost-of-living expenses, that pairing is hard to beat.

Still not convinced? The numbers might change your mind.

Let’s say you lived in San Francisco, where the median home value is $806,600, and saved 10% of your $88,000 median base salary. It would take you over 18 years to save a 20% down payment. If you lived in Detroit and saved 10% of your $61,500 income, it would take you only four to save for a 20% down payment on a $123,100 house. So the next time a flashy city calls, think about that.

If you’re ready to pack up and move to one of these affordable cities, it’s a good idea to check out mortgage loan offerings in the area first. Affordable housing is great, but it’s even better when paired with a loan that has a competitive APR. Check out Credit.com’s Mortgage Loan Center to learn more about available loan offerings.

Image: istock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.



Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team