Cost-of-Living Adjustment
Normalizing income and benchmarks for what things actually cost where you live.
The same nominal salary supports very different standards of living by location, and the spread is large. The Bureau of Economic Analysis publishes regional price parities showing metro price levels ranging from roughly 15% below the national average to well above it, with housing driving most of the gap.
Adjustment matters for benchmarking because an unadjusted comparison silently attributes a cost-of-living difference to behavior. A household in an expensive metro saving less than the national median may be saving more of what is left after rent than a peer paying half as much for housing.
Promi uses the location in your profile to set the peer bands. Leaving it unset falls back to national figures, which will misread high-cost and low-cost areas in opposite directions.
Worked through
Same salary, different realities
An identical $120k household income in two metros, adjusted for local price levels.
- San Francisco, adjusted
- $82k
- San Francisco rent
- $3,200
- Austin, adjusted
- $130k
- Austin rent
- $1,600
On these adjustments $120k in Austin goes as far as about $190k in San Francisco. The nominal figures are identical.
Where this lives in Promi
Financial Profile page. Peer bands adjusted for your location.
Related in Financial Profile & Comparisons
See your own cost-of-living adjustment
Promi computes this from your linked accounts, with the definition one click from the number.
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