Hcol Area – Where Are the Best High Cost of Living Areas

hcol area

Looking at the best HCOL areas in the US, we must first understand what HCOL areas are.

High Cost of living areas are simply areas that are relatively expensive to live in. These places cost more to live in than other areas. The other areas that cost less to live in are referred to as low cost of living areas. LCOL areas are significantly cheaper to live in compared to HCOL areas. Cost of living is the amount of money a person needs to fund their basic expenses and maintain a certain lifestyle and standard of living in a particular place and time. 

What determines this cost of living are basic expenses such as; cost of housing; rent, food, transportation and healthcare. The cost of these expenses vary by location and there are several factors responsible for this. Rent in San Francisco, CA may cost as high as $3,500, while the average cost of rent for a 2-Bedroom in Houston is $1,600. These costs are also largely affected by individuals’ lifestyle and taste. 

We can identify HCOL and LCOL across the United States using the cost of living index. When the cost of living index is less than 100; that’s a LCOL area(costs are lower than the average) and if the cost of living index in that area is higher than 100, then that’s a HCOL area(costs are higher than the average).

Where a person decides to live is largely dependent on one’s income. It would be financially unhealthy to live somewhere that’s above your means. This would likely put you under financial stress because you’ll constantly have to work more and more to be able to afford your basic needs. You’ll have to work a lot more to make ends meet. One primary goal any adult person is walking towards is financial independence; improving their personal finance. That’s basically what every person who gets a job is aiming for. But to do that you must be able to make enough to cater for your essential needs, and then some to invest and get you closer to being financially independent. Living above your income and means will only make your path to financial independence harder and longer. That is what most people that do not make enough money face when they live in HCOL areas. HCOL areas offer a lot more in terms of a certain type of lifestyle, access to more opportunities, jobs, people, experiences etc. 

HCOL cities are the best for people with a very adventurous lifestyle. People who want the best and only the best out of life. They seek adventure and enjoy the daily rigor of going after something they want. Constantly trying to make more money to afford the lifestyle that they see and love can even be a motivation for them. This is not to say that people who live in Lcol areas do not have the drive to go after that kind of life, they just prefer not to and that’s totally fine. Not everyone can strive to be a Kardashian and live the Beverly Hills dreams. Some people want quieter lives, where they spend quality time with their friends and family. It really all boils down to the lifestyle of individuals. What’s important is that you’re happy and satisfied with yourself and your day to day life.

HCOL areas are home to the top businesses, institutions, and companies, and as such offer more in terms of opportunities, entertainment and certain activities that you’ll likely not find in a LCOL area. As expensive as it is to live in HCOL areas, you also have a better chance of earning six figures than if you were living in a LCOL area. How much a person wants to make is not the only thing that determines where a person decides to live. A LCOL area may appeal more to another person that wants a slower paced life, where they work fewer hours and can make time for other things like hobbies and family. Whichever area one decides to live, that decision will be based on what matters to them the most. 


This is a question worth asking because it can be baffling why the same products and services cost way more in some areas than in other areas. In this case, they cost more in High cost of living areas, than in Low cost of living areas.

The simple answer to this question is the issue and Demand and Supply. There are other factors that contribute to this situation, but the answer is that more people simply want to live in High cost of living areas. As such, the demand for housing and other necessities is higher in these areas. It’s the simple law of economics; all other things being equal, as demand increases, price would increase as well. Plus, it’s not hard to understand why more people want to live in such areas. These HCOL areas have access to beaches, lakes, mountains, scenic views etc.

Let’s look at some of the best HCOL areas in the United States; 


Manhattan (New York)

New York is not only one of the most expensive cities to live in in the United States, but also of the top 10 most expensive cities in the world to live in, and Manhattan borough leads that park of expensive areas in New York. The cost of living index is 237.8% higher than the average, and the median cost of housing in New York is about $776,946, compared to the national median of $355,852. Everything costs more here. The median home value is only second to San Francisco. The average rent in Manhattan is $4,604 and the average home price is a whopping $2.6 million.

This insane cost of living doesn’t end in housing alone, even transportation and grocery shopping are considerably higher in Manhattan. It is said that residents pay at least 44% more grocery shopping in Manhattan and movie ticket prices are 62% higher in Manhattan than the rest of the country.

Manhattan is not shy of popular attractions. Not many cities can boast of as many famous streets as Manhattan can. It is home to the famous Broadway, one of best known streets in the world, Wall Street, skyscrapers such as The Empire State Building; Harlem and Central Park, the United Nations Headquarters building. All these and more are what has primed Manhattan as one of the most expensive cities in the US. 

Honolulu (Hawaii)

This is the second most expensive city in the United States to live in. Residents who live here pay more for everything. Groceries in Honolulu go for 153% more than the national average, while utilities such as gas, water, electricity cost over 102.2% more. The median household income is $87,722, and the cost of living is 92.7% above the United States average. 

Honolulu, Hawaii is a paradise location and a great tourist location for people all over the world. Most of the items sold there are brought in by boats or planes, and this significantly increases their prices. 

Housing is one of the biggest income eaters in Honolulu. Costs related to housing are almost four times more than the national average in Honolulu; an average home goes for $1.5million. Honolulu is said to be family friendly, it also happens to be one of the most tax friendly cities for retirees in the United States. 

San Francisco (California)

San Francisco is not only one of the most expensive cities, but one of the most popular in the United States as well. Innovative growth driven mostly by highly paid tech workers. As highly paid as the people who live in San Francisco are, it’s still hard to keep up with the exorbitant living costs. So much so that even the highest earners are struggling to make ends meet. 

The average price of a house in San Francisco is $1.4million and its median household income is $119,136. The cost of living in San Francisco is 84.2% above the United States national average. San Francisco’s economy is mostly garnered by its IT, tourism and financial services industries. San Francisco is mostly surrounded by water, and so there isn’t sufficient land to grow and expand. This has made housing an issue, as it’s not able to meet up with the housing demand, this in turn is increasing the price of housing. So many residents have had to move away from San Francisco for much cheaper locations. 

Brooklyn (New York)

Brooklyn is the second borough in New York City to be named among the most expensive cities in the US. Formerly home to the Dodgers, Brooklyn was once considered as a cheaper option than Manhattan. Not anymore. 

Housing in Brooklyn is now 4.3 times more than the national average in the US. The cost of living in Brooklyn is 74.9% above the US average. The median household income in Brooklyn is $63,973 and the median home value is $734,800. The good news is not everything runs significantly more expensive in Brooklyn. Utilities are only 7% higher, and healthcare runs only about 4% higher than the average. Groceries, utilities and transportation only about 11% more. 

Washington, District of Columbia

Living expenses are not so much higher in Washington. Amazing cheap transport systems like the Metro Bus make sure you don’t spend a fortune moving around in the city. Its cost of living is 58.8% above the national average. Healthcare costs are slightly below the national average. Its median household income is $90,842 and median home value is $618,100. Washington being the seat of the world’s most powerful nation justifies its expensive living costs. Housing and taxes are two of the most contributing factors to it being one of the cities in the US with the most high cost of living. 

Orange County, California

Also known as the O.C, is synonymous with wealth. So popular it even had a tv series made about it in the 2000s. The median household income in Orange County is $94,441 and its living cost is 54.8% above the US average. 

Rent in Orange County goes as high as $2,564 a month and that is about twice the national average. The median cost of a home in Orange County is $1.1million. 

Utilities are about 7% cheaper in OC, and healthcare costs only about 3% more than the US average. The OC is concentrated with Fortune 500 and celebrities. If you love to surf, this is the perfect place for you as it boasts of one of the country’s finest waters. You’ll find most Orange County residents hiking, surfing, going on mountainous trails and just spending time in the sun. 

Los Angeles, California

When it comes to glitz and glamor, LA easily tops the chat. It is home to one of the largest movie industries, Hollywood. Some might even describe it as the cradle of popular culture. Surprisingly, most of its residents don’t work in Hollywood. It is the second largest city in the nation, and proudly boasts of top spots like Beverly Hills and Venice Beach. The median household income in LA is $65,290 and its cost of living is 51.29% above the US average. LA receives criticism for its poor public transportation and notorious traffic. If you can’t stand long hour traffic, LA may not be the place for you. Its median monthly rent is $2,776 dollars and median home price is $823,191. The beauty of LA is its range of cultures and people. 

Boston, Massachusetts

Boston is one of the most appealing places to live in, with its unmatchable collection of universities, hospitals, tech, monuments and historical sites, the price tag on this city is not surprising. Housing is the major culprit in eating through its residents’ wallets in Boston. The average apartment rent in Boston is about $3,396 a month, compared to the $1,121 per month national average. The median household income in Boston is $76,298 and its cost of living is 50.8% above the US average. Groceries are 16% more expensive than the average, while healthcare costs about 17% more than what the average American pays. 

Seattle, Washington

Home of Starbucks. Boasts of a budding tech scene housing big tech companies like Microsoft and Amazon as well as other small tech companies. The median household income is $97,185 and its cost of living is 50.7% more than the US average. The median home value is $981,548. Housing also takes the lion’s share of its residents in Seattle. Seattle residents spend up to triple the US average on housing expenses. Transportation, healthcare and groceries don’t come cheap either; they run as high 22-29% more than the average American pays and 36% more on miscellaneous goods and services.

Oakland, California

Housing related expenses in Oakland cost up to three times more than the national average. Median household income in Oakland is $80,143 and its cost of living is 49.0% above the US average. Groceries and gas don’t come cheap in Oakland; it is ranked among the top five most expensive cities for food and gas. Buying a home in Oakland could cost you as much as $981,000.

Looking at these HCOL areas, you’ll see that Housing and taxes are what makes these states and cities so expensive to live in. 


Living in any of these high cost of living areas and low cost of living areas has its pros and cons as we’ve vaguely considered before. Whichever of these areas you decide to live in, there are certain things you’ll have to trade off. For HCOL areas, you may not get the peace and quiet you may enjoy in a LCOL area because these HCOL areas are usually large cities with larger populations than LCOL areas. Also with LCOL areas, you may miss out on the fun social activities and entertainment that the larger HCOL areas offer regularly. Whichever of these areas you decide to call home has their pros and cons. 

HCOL areas – High Cost of Living Areas

The Pros of living in High Cost of Living Areas

  • Higher Paying Jobs: High Cost of living areas offer more higher paying jobs than low cost of living areas. There is a high potential of earning 6 figures in a HCOL area. 

According to the U.S Economic Research Service, urban areas offer higher median wages than rural areas. This is definitely appealing to anyone looking to make a decision whether or not to move to a HCOL area. You have a higher potential of landing a job where you can make more money living in a HCOL area than in a LCOL area. So, although living in a HCOL area costs more, there you have a higher chance of making more money that’s enough to cover your basic expenses and more to save. This will in turn ease your path to financial independence. When you have more to save, you have more to invest as well and further increase the volume of your investment. You can then see your investments even yield enough returns to cover your expenses and fast track your path achieving financial independence.

  • Better Job Market – The jobs do not only pay higher, but there are more than in low cost of living areas. The job market is more solid, more high profile companies set up businesses there because there’s more skilled people there. College graduates are more likely to look to settle in these areas to get those top dollar jobs and so there’s adequate demand and supply of talent. It is also easier to make high income leaps in these areas because of the amount of budding business in the market to attract top talent.
  • Better Quality of Life: You’re sure to enjoy life more in HCOL areas. There are various attractions and activities that would peak your interest and make you want to live in these expensive cities. You get access to better healthcare and medical facilities. Even basic institutions like restaurants, and shops are more in these high cost of living areas.  
  • Appealing Lifestyle: If what you want is an Instagram worthy lifestyle then HCOL areas are where you should be living. Living in these areas will give you a rich access to a lifestyle you likely would not be able to experience in a LCOL area. There’s way more people to meet and socialize with, make new friends with and maybe build businesses with even. All of that and more is what you’ll get in these high cost of living areas. 

Take LA for example, LA is the home of many superstars and celebrities. The chances that you’ll run into your favorite celebrity or actress in a LCOL area like Fort Wayne, Indiana, is slim.

The Cons of Living in High Cost of Living Areas

  • It costs more to live in HCOL areas: This is the most obvious disadvantage of living in a High cost of living area. The living expenses just cost more and so you’ll need to earn considerably more than the average income to live well. This can put a burden on you if you’re not making enough money to live in a HCOL area. 

The reality of the situation is that someone living in a LCOL area making as much money as you’re making living in a HCOL area would have much more left to save or invest after removing their living expenses. For example, a family living in a Low cost of living area may need to make more than two times what they make to live in a High cost of living area. So, it’s a decision you have to make to decide to live in a HCOL area, knowing full well that you could have more disposable income if you lived somewhere less expensive. 

  • It can take you longer to achieve FI (financial independence) – Since you’ll be living on premium expenses, although you have the potential to make a lot, your living expenses would be taking a chunk of your income. This isn’t a bad thing if your lifestyle truly is tailored to live in these areas, and you find true happiness living there. It’s not all about saving for tomorrow, you also have to be able to enjoy your daily life, and if living in such areas is giving you that happiness then you can choose to delay attaining financial independence. 

LCOL – Low Cost of Living Areas

The Pros of Living in Low Cost of Living Areas

  • A much more Peaceful and Slower Pace of life – If you’ve ever spent some time in a large city and you got sick of the traffic, or how many people are crammed together in public transportation during transit, then a LCOL area is best for you. There are not as many people in these cities rushing off to work trying to get to work on time, or catch a bus and so life there is slower paced and just healthier for your mental health. Instead of spending long hours at work to be able to afford your lifestyle in an expensive city, you can focus more on leading a healthier life. You may not be making as much as someone living in a high cost of living area, but you’ll have way more time.

According to a study published by the National Library of Medicine, longer work hours can put you at risk of diseases such as hypertension, depression/anxiety, work stress, fatigue, diabetes etc. 

  • Low Costs – The living expenses in Low Cost of living areas are extremely low. What that means is you can get more for less. This affords you the luxury of saving or investing for your future without financial stress. You would have way much more after your expenses than a friend or partner living a high cost of living area, because you’re not spending more on rent, food, and even transportation. Although you won’t be making as much as they do, the amazing thing is you are able to do more with even the lesser you’re making. You won’t need as much money to afford your lifestyle in these areas. 
  • Lower Income taxes – LCOL cities tend to have lower taxes compared to HCOL cities. This is a huge advantage because your taxes and income are the two most important contributors to your financial independence. Imagine someone making the same as you living in a LCOL city, you’ll be left with more salary after taxes than the other person. 

The Cons of Living in Low Cost of Living Areas

  • Lack of high paying Jobs – There are just not as many high paying jobs in LCOL areas as there are in HCOL areas. There’s a lot more business going on in larger cities, and a lot more companies are present there and so there are naturally more opportunities and potential of earning high incomes. The job prospects are considerably low.
  • Less Stable Job markets – Unexpected happenings in the economy affect job opportunities more in these areas than in HCOL areas because there are fewer jobs available in such cities.  You will find more jobs in a HCOL city than a LCOL city.
  • Take Longer to achieve Financial Independence – Because there are less paying jobs in these cities, it would take longer for a person earning less to achieve their reach financial independence. There’s only so much saving one can do with the little they’re making. 


  1. Living in a HCOL city automatically means you’ll spend more money – This isn’t necessarily the case. No matter how expensive it may be to live in a hcol city, you still have your free will to spend on things you want to spend on. You’re still in control of your personal finances and it’s up to you to make sure you don’t spend more than you earn. 
  2. You won’t save as much money – A lot of people also buy into the myth that they would not be able to save as much money living in such high income areas. With a significant income bracket; which you are open to when you live and work in an expensive city you can save as much as you want to, by being more frugal and just getting better at managing your money and making your money work for you and not the other way around. 


This is a very smart way to maximize your living expenses. If you can get a remote job at an HCOL company, you can live in a LCOL area and save money. It’s an earn large, live small philosophy. This is a sure fire way to fast track your path in achieving financial independence. This also opens you up to more jobs and more potential income because you’re not bound by where you live. Remote work gives you the possibility to live in a LCOL area and earn a HCOL area income. 


Where you decide to call home depends on what’s most important to you and what you value. Living in a HCOL area may be relatively more expensive but it offers you a more exciting lifestyle. Wherever you choose to live, make sure it’s a smart financial decision. Because where you live falls and rises at the feet of your finances. The type of area you decide to live in has a huge impact on your finances, so you see that it’s a decision you have to make wisely.  Regardless of the financial demands of living in any of these areas, you can live frugally in a HCOL area, and expensively in a LCOL area. The goal should be to live in a place where your income can go the farthest relative to your living expenses. Another smart thing people do is to save for retirement while working in a HCOL city and then move to a LCOL city to stay. 

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