Diane Kowalczyk spread a spreadsheet across her kitchen table in Austin, Texas in the spring of , staring at a number that made her stomach drop: her monthly burn rate had crossed $5,400. She’d heard about a cost of living index. She had no idea what it actually measured — or whether it would save her.
A cost of living index is not a magic number. It is a weighted comparison tool built from six real spending categories. Understanding those categories — and their local quirks — is the difference between a smart relocation and a costly surprise. This guide anchors every concept to real cities, real dollar amounts, and real tax rates.
Why People Keep Moving — And Why They Keep Getting It Wrong
Read more: Cheapest States to Live in America
The domestic migration numbers tell a consistent story. People leave California, New York, and Illinois — and land in Tulsa, Oklahoma, Columbus, Ohio, and Boise, Idaho. The logic is simple: stretch the dollar further. But “affordable” is not a feeling. It is a calculation. And most people skip the calculation entirely.
The cost of living index is a helpful tool used to compare the cost of living in different cities, offering practical information when choosing a place to live. Factors to consider include housing, food, education, healthcare, transportation, and taxes. That sounds simple. In practice, those six categories each carry different weights — and in different cities, they behave very differently.
The Six Categories That Actually Drive Every COL Score
No index is neutral. Each one — whether published by the Council for Community and Economic Research (C2ER), MIT’s Living Wage Calculator, or the Missouri Economic Research and Information Center — assigns weights to categories differently. Here is what those six categories look like in concrete dollar terms, comparing Austin, TX to Tulsa, OK.
| Category | Austin, TX | Tulsa, OK | % Difference |
|---|---|---|---|
| Housing | $1,927/mo avg 1BR | $890/mo avg 1BR | +117% |
| Groceries | ~$420/mo (single adult) | ~$350/mo (single adult) | +20% |
| Healthcare | Index: 105.4 | Index: 89.1 | +18% |
| Transportation | ~$510/mo (car + gas) | ~$430/mo (car + gas) | +19% |
| Utilities | ~$185/mo | ~$155/mo | +19% |
| State Income Tax | 0% (Texas) | 0.25–4.75% (Oklahoma) | TX wins |
Sources: C2ER ACCRA Cost of Living Index Q3 2024; Zillow Rental Data; Oklahoma Tax Commission oklahoma.gov; Texas Comptroller comptroller.texas.gov
Notice that Texas wins on income tax. But Tulsa wins on everything else. The index captures that trade-off as a single number. Your personal spending mix might look completely different.
Remote Work, Job Markets, and Why Income Side Matters as Much as Costs
A cost of living index measures the expense side of your budget. It tells you nothing about income. That oversight bites people. The median household income in Travis County, TX (Austin) is approximately $82,000. In Tulsa County, OK, it’s closer to $56,000. Move to Tulsa for lower costs, but take a local job — and your net position may not improve as much as the index promised.
Remote workers sidestep this problem. If your employer pays Austin or San Francisco wages while you live in Tulsa — or in Joplin, Missouri (index score: ~79) or Wichita Falls, Texas (index: ~82) — the arbitrage is real and significant. Diane eventually did the math: keeping her $110,000 remote salary and moving to Tulsa would have freed up roughly $1,800/month in disposable income immediately.
Some financial bloggers are beginning to push back on index-driven relocation decisions. One personal finance writer noted candidly
A low index score doesn’t guarantee you’ll feel richer. If you earn $38,000 in Joplin, Missouri — where the index sits around 79 — you’re still stretched. The index measures relative price levels, not absolute affordability. A city can be cheap and still price out its own workforce.
Where the Index Breaks Down Completely
Read more: Mississippi vs. California: The $2,500/Month Cost of Living Gap
COLI data gets collected at irregular intervals. Harlingen, Texas — consistently one of the lowest-cost metros in the country, with an index near 78 — last had comprehensive survey data refreshed in a cycle that lags current conditions by 12 to 18 months. Pandemic-era rent spikes hit fast. The index caught them slow.
There’s also a category blindspot. The standard ACCRA/C2ER basket doesn’t weight childcare heavily enough for families. In Washington, D.C. — index around 152 — full-time infant care at a licensed center averages over $2,400/month according to Economic Policy Institute family budget data. That single line item can obliterate any apparent savings from a “moderately priced” suburb.
Healthcare costs present a similar distortion. Bend, Oregon looks reasonable on a composite index — roughly 113 — but insurance premiums on the individual market in Deschutes County can run $650+ per month for a healthy 45-year-old. That’s a housing-level expense the index buries inside a weighted average.
“The index tells you what a dollar buys on average. It doesn’t tell you what your dollar buys — because your life isn’t average.”
Taxes Are Almost Never Baked In
This is the trap that catches relocating retirees hardest. The standard cost-of-living index does not include state income tax, property tax rates, or estate taxes. It measures what groceries and haircuts cost. It ignores what your government takes first.
| City / State | COLI Index | State Income Tax | Avg. Property Tax Rate |
|---|---|---|---|
| Tulsa, OK | 87 | 4.75% top rate | ~0.87% |
| Austin, TX | 120 | None | ~1.81% |
| Bend, OR | 113 | 9.9% top rate | ~0.82% |
| Sarasota, FL | 105 | None | ~0.89% |
| Wichita Falls, TX | 82 | None | ~1.60% |
Sources: Oklahoma Tax Commission, Oregon DOR, Tax Foundation. Rates reflect schedules.
Notice what happens when you layer taxes onto the index. Austin has no state income tax but property tax rates near 1.81% — meaning a $450,000 home costs roughly $8,145/year in property taxes alone. Wichita Falls looks cheaper on the index, but property tax rates there also bite at around 1.6%. Sarasota quietly threads the needle: no income tax, moderate property taxes, and a COLI composite that’s only 5 points above 100.
How to Build Your Own Personal Index
The honest move is to stop using the composite score as your final answer. Use it as the first filter. Then build a personal basket based on your actual spending — not a theoretical household’s.
- Pull your last 12 months of actual spending by category from your bank or budgeting app.
- Weight your own categories. If you spend $0 on private school tuition, don’t let that drive your index comparison.
- Use Numbeo or BLS regional data to price your specific basket in the target city.
- Add after-tax income impact: run your salary through both states’ tax calculators.
- Apply a 12-month buffer — prices in fast-growing metros like Boise, Idaho can shift 8–12% in a single year.
Diane, from our earlier example, eventually did exactly this. She wasn’t average. She spent heavily on dining and fitness, lightly on housing (she rented a small apartment). Her personal basket made Tulsa look even more attractive than the composite index suggested — roughly 91 on her weighted scale versus the published 87. The dining scene surprised her too. Downtown Tulsa’s Brady Arts District has expanded considerably since , with sit-down meals routinely running $14–$22 per entrée.
What Smart Movers Actually Do With This Data
Read more: Best States for Cost of Living 2026: Where $60K Feels Like $90K
Financial planners who specialize in relocation — particularly those serving federal employees or retirees using OPM pension data — typically run three parallel analyses. First: composite COLI. Second: after-tax income delta. Third: a 10-year housing appreciation forecast for the target market.
That third lens matters more than most people realize. Columbus, Ohio carried a COLI index near 91 in . Home values in Franklin County have risen over 50% since then according to FHFA House Price Index data. The city is still cheaper than coastal metros. But the “cheap” window narrows every year. Buyers who moved in locked in a deal. Buyers arriving in are getting a different city.
Contrast that with Huntington, West Virginia — index around 83, one of the lowest in the Appalachian region. Home values have appreciated modestly. Affordability remains intact. But population has declined, and some service categories (specialty medical care, broadband infrastructure in outlying Cabell County areas) score poorly even if grocery and housing costs are low. The index won’t tell you that a 45-minute drive for a cardiologist is part of your cost structure.
Based on composite COLI, median wage growth, and net migration data: Greenville, SC (index ~93), Chattanooga, TN (index ~89), and Fayetteville, AR (index ~88) are all attracting remote workers and retirees faster than their index scores alone would predict. Quality of life metrics — trails, arts infrastructure, university-town energy in Fayetteville — are pulling people that raw numbers don’t explain.
Frequently Asked Questions
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