It’s hard to feel financially stable when the cost of living continues to take a bigger bite out of your budget. While wages rose 5.1% between December 2021 and December 2022, wage growth failed to keep pace with inflation, which averaged 8% in 2022.
Ultimately, inflation has affected everything from housing costs to the price of eggs, making it increasingly difficult to live comfortably in America’s largest cities. With this in mind, SmartAsset set out to uncover the after-tax income now needed to live comfortably in the nation’s 25 largest metropolitan areas.
To determine how much money is needed to live comfortably in the largest metro areas, we used the 50/30/20 rule to define a comfortable lifestyle. This rule is a budgeting strategy that allocates 50% of after-tax income to basic living expenses (needs), 30% to discretionary spending (wants), and 20% to savings or debt payments.
“A budget is the foundation of many people’s financial plans. And it’s especially important to understand and track your spending when the cost of everyday things increases,” says Susannah Snider, a certified financial planner and SmartAsset’s managing editor for financial education.
“Being able to stick to a 50/30/20 budget means you have enough to fund short- and long-term goals while paying for essential living expenses.”
Data and method
SmartAsset used the latest MIT Living Wage Calculator data to gather the basic cost of living for a person without children in each metropolitan area. The data covers the cost of living in each city as of 2022. The online tool calculates the cost of living by adding the average cost of housing, food, transportation, medical care and other expenses within each metro area.
We assumed that the MIT cost of living figure for each urban area would cover needs (ie, 50% of one’s budget) and then calculated the total take-home pay that allows individuals to spend an additional 30% on wants and 20% on savings or debt payments.
This is SmartAsset’s second study of how much money is needed to live comfortably in the 25 largest metro areas. You can read the 2022 edition here.
Key findings
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St. Louis is again the most affordable. St. Louis metro area is the most affordable place for the second year in a row, requiring $57,446 after taxes to live comfortably. The San Francisco Bay Area, on the other hand, again requires the highest take-home pay—over $84,000—to maintain a comfortable lifestyle.
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Income requirements in this Southern California metro area increased nearly 30%. None of the 25 places in our study had a more acute one-year increase in the after-tax income needed to live comfortably than Riverside-San Bernardino-Ontario. A year ago, $52,686 was required for a comfortable lifestyle. That number has since increased 27.28% to $67,060 in 2023.
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On average, you need $68,499 after taxes to live comfortably. The average after-tax income needed for a comfortable lifestyle across the 25 metropolitan areas in our study increased by about 20% from a year ago when it was just $57,013.
Five places that demand the highest salaries
1. San Francisco-Oakland-Berkeley, CA
A single person with no children needs $84,026 after taxes to support a comfortable lifestyle in San Francisco-Oakland-Berkeley. Using the MIT Cost of Living Calculator, SmartAsset found that an average person spends $42,013 on annual living expenses in the San Francisco area. Someone following the 50/30/20 budget would set aside $25,208 for discretionary spending and $16,805 for savings or debt payments. Despite remaining the most expensive place in our study, San Francisco-Oakland-Berkeley had the smallest one-year increase in required after-tax income from a year ago (13.12%).
2. San Diego-Chula Vista-Carlsbad, CA
San Diego-Chula Vista-Carlsbad jumped up four spots on this year’s rankings after the annual cost of living rose a whopping 21.32%, according to MIT. As a result, a single person now needs to earn $79,324 after taxes to live comfortably in that part of California. After their basic living expenses ($39,662) are covered, a person can spend $23,797 on wants and set aside $15,865 for savings or debt payments.
3. Boston-Cambridge-Newton, MA
The metropolitan area, which surrounds Boston and extends into southern New Hampshire, requires the third highest take-home pay for a comfortable lifestyle. A single person needs to earn $78,752 after tax to cover basic living expenses ($39,376) and still set aside half of their earnings for wants and savings/debt. Following the 50/30/20 budget, someone living comfortably would set aside $23,626 for discretionary spending and $15,750 for savings or debt payments.
4. New York-Newark-Jersey City, NY-NJ-PA
The New York metropolitan area may be the most populous in the country, but it’s not where you need the most after-tax dollars to live comfortably. However, the New York-Newark-Jersey City area requires a take home salary of $78,524 as the typical cost of living is $39,262 per year. This means that someone following the 50/30/20 budget would set aside $23,557 of their income for discretionary spending and either save the remaining $15,705 or use it to pay down debt.
5. Seattle-Tacoma-Bellevue, WA
It takes $77,634 in after-tax dollars to live comfortably in the Emerald City and its surrounding areas. Living expenses for a person in Seattle-Tacoma-Bellevue add up to $38,817. As a result, a single person will allocate 30% of their take-home pay ($23,290) to discretionary spending and the remaining $15,527 to savings or debt payment.
Five places that demand the lowest wages 1. St. Louis, MO-IL
Living comfortably in the greater St. Louis area means your after-tax income should be $57,446 — the least amount in all 25 metropolitan areas. That can cover basic living expenses ($28,723) with enough left over to set aside 30% for your wants ($17,234) and another 20% for savings or debt payments ($11,489).
2. Detroit-Warren-Dearborn, MI
A single person needs to earn $58,358 after taxes to live comfortably in the Detroit-Warren-Dearborn metro area. With basic living expenses adding up to $29,179 per year, someone following the 50/30/20 budget would have $17,507 left over for discretionary spending and $11,672 for savings or debt payments. While living in the Detroit area requires the second-lowest take-home pay in our survey, that number is up 24.39% from a year ago.
3. San Antonio-New Braunfels, TX
To live comfortably in the San Antonio-New Braunfels metro area in Texas, a single person would need to earn $59,270 after taxes. Typical cost of living in this part of the Lone Star State adds up to $29,635 per year, meaning a person living comfortably would have $17,781 for discretionary spending and another $11,854 to add to their savings or debt.
4. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Typical cost of living in the Philadelphia-Camden-Wilmington metro area is $30,839 per year. That means a single person would need to take home at least $61,678 each year to live comfortably in the Philadelphia area, which spans four states. Doing so will allow them to spend 30% of their after-tax income on wants ($18,503) and have 20% left for savings or paying down debt ($12,336).
5. Charlotte-Concord-Gastonia, NC-SC
A single person can live comfortably in the Charlotte-Concord-Gastonia metro area in the Carolinas for $62,110. The average cost of living in the Charlotte area adds up to $31,055 per year, meaning someone adhering to the 50/30/20 budget would allocate $18,633 to their discretionary spending and either save the remaining $12,422 or use it to pay down debt.
Tips for budgeting during inflation
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Be realistic with your budget. Use SmartAsset’s budget calculator to build a spending plan, but don’t be afraid to make adjustments as needed. “It’s important to stick to a spending plan, but give yourself some flexibility and grace. A plan that’s overly restrictive can quickly give up,” says Snider. “So if buying yourself a daily latte is the one thing that brings you joy every morning, make room for it in your budget and consider where else you can cut back.”
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Talk to an expert. A financial advisor can help you build a budget, create a financial plan and invest your assets during periods of high inflation. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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