locationA lot of the time we get sucked into thinking that moving to a bigger city can help with finances because you can find a higher-paying job. Unfortunately, that higher-paying job often comes with a higher cost of living.

I read a story recently on CNBC about cities in the United States where a $50,000 salary could go a long way. It got me thinking again about cost of living, location, and finances.

Where You Live Matters to Your Money

Deciding where to live is a big choice, but it’s about more than just your income. It’s also important to consider how much something will cost. I moved to Idaho for a very simple reason: my income could go much further in a small town of 50,000 people than it could go in Philadelphia. The difference is stark.

However, as the CNBC article points out, it’s possible to enjoy city living even without the high price tag. Cities like Memphis, Detroit, and Pittsburgh provide some of that city lifestyle without the costs you see in New York or San Francisco (or even Philadelphia). In my neck of the woods, it’s still pretty cost-effective to live in Boise or Salt Lake City.

Where you live can have a huge impact on your finances. In my case, moving to Idaho Falls not only means a much lower cost of living, but it also means I’m closer to family. This is a big help when it comes to raising my son. My siblings have all moved back to the inter-mountain west in the last couple of years, and a big part of that is the low cost of living and the help we receive from having our kids close to grandma and grandpa.

What’s Your Disposable Income?

Figure out how much you have left to spend after you have taken care of your expenses. Can you comfortably pay for your needs? Are you able to pay for housing and food without stretching all the time? Moving to a lower-cost area can help you better pay for your needs. It can also help when it comes to your wants.

After your needs are paid, do you have money left over for some of your wants? Can you set money aside for the future? Living in a lower-cost area might provide you with the chance to eat out a little more, go to the movies, and enroll your kids in more extracurricular activities.

Of course, the downside is that you might not have access to higher-paying jobs in areas with a low cost of living. You need to do a balancing act. In some areas, the lower salary is still fine, because the difference in cost of living is so great. There are other areas, though, where wages are so low that they still can’t keep up with the lower cost of living. Once you factor in moving costs, it might not be worth it to move.

In the end, the important thing is to do your research. Research the possibilities, and figure out what might work best for you. Weigh the lower income with the cost of living to see if the two really balance out.