Deciding where to build your life involves many factors, including the cost of living in your chosen location.

Understanding the differences between high cost of living (HCOL) and low cost of living (LCOL) areas can help you make an informed decision about where to settle down.

In HCOL areas, you’ll find that the everyday essentials like food, housing, and transportation are more expensive, so a higher salary would be required to maintain a similar lifestyle.

On the other hand, LCOL areas remain more budget-friendly but may lack the amenities and opportunities offered by their more expensive counterparts.

To determine which option is best for you when it comes to HCOL vs LCOL, weigh the pros and cons of each, taking into consideration your personal preferences, career goals, and financial situation.

Understanding HCOL vs LCOL

High Low Cost Area

In order to make informed decisions about where to live, it’s essential to understand the differences between high cost of living (HCOL), low cost of living (LCOL), and median cost of living (MCOL) areas.

High Cost of Living (HCOL)

A high cost of living area is considered more expensive for the average person. The costs of essential commodities such as gas, food, and utilities are higher in HCOL areas compared to other regions.

In these areas, you might need a higher income to maintain a decent standard of living, as your dollar will not stretch as far.

Some factors contributing to a high cost of living include:

  • Housing: Elevated property and rental prices
  • Transportation: Higher costs for public transit, gas, and vehicle maintenance
  • Food: Expensive groceries or dining out options
  • Healthcare: Greater costs for medical services

Low Cost of Living (LCOL)

On the contrary, a low cost of living area has below-average overall costs.

LCOL areas typically have lower expenses for housing, transportation, food, and entertainment.

It means that in an LCOL area, you can enjoy a decent standard of living with a lower income, as the cost of living is not as high.

Some factors contributing to a low cost of living include:

  • Housing: Affordable property and rental prices
  • Transportation: Lower costs for public transit, gas, and vehicle maintenance
  • Food: Inexpensive groceries or dining out options
  • Healthcare: Lower costs for medical services

Median Cost of Living (MCOL)

A median cost of living area falls between HCOL and LCOL areas.

MCOLs represent a middle ground in terms of overall costs associated with living in a particular region.

In an MCOL area, you can expect a balance between the cost of living and access to amenities in comparison to HCOL and LCOL areas.

When considering these types of living situations, it’s essential to weigh the pros and cons of each according to your personal priorities, financial situation, and lifestyle preferences.

By learning the essential differences between HCOL, LCOL, and MCOL, you can now make an informed decision on which type of area best suits your needs.

Factors Impacting Cost of Living

High Low Cost Area

Housing Costs

One of the main factors affecting the cost of living in HCOL and LCOL areas is housing costs.

In general, housing costs in HCOL areas are significantly higher than in LCOL areas.

For example, the median house price in California is $579,332, while in Florida, it’s around $254,607.

Consequently, your mortgage or rent payments can greatly impact your cost of living.

Food and Groceries

The cost of food and groceries also varies depending on the area. Typically, food prices are higher in HCOL areas, whether you’re dining out or grocery shopping.

This is due to higher transportation costs, urban taxes, and other factors. To reduce your food expenses, consider buying groceries in bulk or shopping at discount stores.


Transportation costs can differ greatly between HCOL and LCOL areas. In HCOL areas, public transportation options may be more available and efficient, but they can also be more expensive.

Conversely, LCOL areas may rely more on personal vehicles, leading to higher gas and maintenance expenses.

It’s essential to evaluate your transportation options and choose the most cost-effective method for your situation.


Utilities, including electricity, gas, water, and waste removal, have varying costs depending on the region.

HCOL areas often have higher utility rates due to increased demand, higher taxes, and other factors.

To lower your utility costs, be mindful of your energy consumption and implement energy-saving practices.


Healthcare expenses can also vary based on your area’s cost of living.

HCOL areas might have higher healthcare costs due to increased demand, higher overhead, and other factors.

It’s important to investigate local healthcare providers and insurance options to minimize your healthcare costs.


Taxes, including income, property, and sales taxes, can significantly impact your cost of living.

HCOL areas often have higher tax rates to fund public services, while LCOL areas may have lower rates.

When considering your finances, don’t forget to account for the various taxes that will affect your total expenses.

Comparing HCOL vs LCOL Cities

HCOL Cities

High cost of living cities are typically large metropolitan areas with a wide range of amenities, cultural attractions, and economic opportunities.

Some examples include San Francisco, New York City, Los Angeles, Seattle, Chicago, and Honolulu.

Here are some key points about HCOL cities:

  • Housing, transportation, and daily expenses tend to be higher.
  • Salaries are generally higher as well, but your purchasing power may not go as far.
  • These cities often have more job opportunities, especially in specialized fields.
  • They tend to be more culturally diverse and offer a variety of entertainment and dining options.

LCOL Cities

Low cost of living cities are generally found in less populated rural areas or smaller towns.

Examples include cities in Kansas, Alabama, Mississippi, Texas, and certain parts of Oregon, Nevada, Alaska, and Florida.

Here are some key points about LCOL cities:

  • Housing, transportation, and daily expenses are generally lower.
  • Salaries might be lower as well, but your purchasing power could stretch further.
  • LCOL areas may have fewer job opportunities, especially in specialized fields.
  • There might be less cultural diversity and fewer entertainment and dining options.

As you weigh your options between HCOL and LCOL cities, consider your personal preferences, career goals, and financial situation.

Ultimately, the best choice will depend on your individual circumstances and priorities.

Pros and Cons of HCOL and LCOL Living

HCOL Advantages and Disadvantages

HCOL Advantages

  • Better job opportunities: HCOL areas often offer more opportunities for high-paying jobs, giving you the chance to earn a higher income.
  • Quality of life: In HCOL areas, you will generally find better schools, healthcare facilities, and overall infrastructure.
  • More entertainment options: HCOL locations typically have a greater variety of amenities such as restaurants, theaters, cultural events, and shopping options.

HCOL Disadvantages

  • Higher living expenses: Living in an HCOL area means higher costs for housing, transportation, food, and other daily expenses.
  • Increased competition: Due to the demand for high-paying jobs and affordable housing, you may face more competition in fields like real estate and the job market.
  • Tighter budget: The higher cost of living may restrict your budget, limiting your spending on entertainment and other non-essentials.

LCOL Advantages and Disadvantages

LCOL Advantages

  • Lower housing costs: In an LCOL area, your money will go further, allowing you to afford a larger home or more spacious living arrangements.
  • Fewer expenses: Daily expenses such as groceries, transportation, and utilities are generally more affordable, leaving you with more disposable income.
  • Less competition: LCOL areas can offer lower competition in the job market and housing, which may make it easier to secure a job and find affordable housing.

LCOL Disadvantages

  • Limited job opportunities: There may be fewer high-paying jobs available, meaning you might have to compromise on your career aspirations.
  • Less amenities and entertainment: LCOL areas may not offer as many amenities or entertainment options, which might affect your quality of life.
  • Potential for lower quality services: Schools, healthcare, and other public services may be of lower quality in LCOL areas compared to HCOL locations.

Personal factors can greatly influence the pros and cons of living in HCOL and LCOL areas. Consider your career goals, family needs, and lifestyle preferences when deciding between the two.

Choosing Where to Live

Financial Considerations

When selecting an area in your pursuit for financial independence or just a comfortable lifestyle, it’s crucial to weigh the pros and cons of high cost of living (HCOL) versus low cost of living (LCOL) areas.

Living in an LCOL can potentially allow you to save more, thus putting you on the fast track to early retirement.

Take time to compare income, home prices, and other living expenses in both HCOL and LCOL areas, as this will impact your net savings.


  • Median income in California (HCOL): $80,440
  • Median income in Florida (LCOL): $59,227
  • Median house price in California (HCOL): $579,332
  • Median house price in Florida (LCOL): $254,607

(Source: Google search results)

Consider using tools like NerdWallet’s Cost of Living Calculator to help you compare expenses between different locations.

Lifestyle Preferences

Consider the quality of life each location brings.

HCOL areas often provide better amenities and services, while LCOL areas might offer a slower, more relaxed pace of life.

Make sure to weigh the lifestyle and local culture that each area offers before making a decision.

Job Opportunities and Remote Work

HCOL areas usually have more job opportunities and higher salaries. However, if you are working remotely,

LCOL areas become more attractive, as you can maintain your big city salary while cutting living expenses.

Research the job market and remote work opportunities to ensure you can find a suitable career in your chosen location.

Proximity to Friends and Family

Proximity to friends and family should also be a priority.

If living near your loved ones is essential, take this into account when considering where to live.

Sometimes, the benefits of being close to your support network outweigh the financial benefits of living in an LCOL area.

School Districts and Education

Don’t overlook the importance of education when deciding on where to live.

HCOL areas often have better-funded and higher-ranking school districts.

If education is a priority for you and your family, ensure the area you choose supports the educational goals you have.

Dealing with HCOL and LCOL Challenges

High Low Cost Area

Navigating the challenges of living in high cost of living (HCOL) or low cost of living (LCOL) areas involves adopting various strategies to manage your finances and make the most of your surroundings.

Strategies for HCOL Living

Living in an HCOL area, such as a big city, often comes with a higher median income and better job opportunities.

However, it also means coping with increased living expenses, like housing, groceries, and transportation.

Here are some strategies to help you manage:

  • Budgeting: Keep a close eye on your spending habits and categorize your expenses. This will help you identify areas where you can cut back or seek more affordable alternatives.
  • Housing: Consider downsizing or opting for a less expensive neighborhood to save on your rent or mortgage. Sharing accommodations with roommates can also help reduce your living costs.
  • Public transportation: Taking advantage of public transportation can save you money and stress compared to owning a vehicle in a densely populated area.
  • Food and entertainment: Look for free or budget-friendly entertainment options like parks, museums, and local events. Cook at home more often and explore discount grocery stores to control your food expenses.

Thriving in LCOL Areas

In contrast, living in an LCOL area, such as a small town in Ohio, often translates to lower median home prices and costs for basics like groceries and healthcare.

While you may find fewer job opportunities or a more modest median income, there are still ways to thrive:

  • Leverage your income: Your money will generally go further in an LCOL area, allowing you to save and invest more. Take advantage of this by building a robust investment portfolio and increasing your financial well-being.
  • Seek remote work: If local job opportunities don’t align with your skills or pay well, consider seeking remote work. Many employers now offer remote positions, allowing you to earn a higher wage while enjoying the lower cost of living.
  • Get involved in the community: Engage with your local community to make new friends and take advantage of the lower-stress atmosphere. Volunteer, join clubs, and attend community events to develop connections and enrich your life in an LCOL area.
  • Maximize your credit: Good credit can help lower the cost of commodities and improve your overall financial situation. Keep an eye on your credit score, pay down debt, and maintain good money-smart habits to benefit from LCOL living.

By understanding and employing these strategies, you can successfully navigate the challenges and make the most of your experiences in both HCOL and LCOL areas.

Stay mindful of your finances and your surroundings, and you’ll be well-equipped to tackle any cost of living situation.