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 in two ways: it places you in one of four cost-of-living tiers, shown on the Financial Profile page, and it sets the ZIP code the Local comparison is drawn from. The national peer comparison is not adjusted for location, which is why it can misread high-cost and low-cost areas in opposite directions.
Worked through
Same salary, four tiers
An identical $120k household income, restated at national prices on Promi's cost-of-living index (Medium cost is 100).
- Low cost (85)
- $141k
- Medium cost (100)
- $120k
- High cost (130)
- $92k
- Very high cost (180)
- $67k
The nominal figure is identical. On the index, $120k in a very high cost area goes about as far as $67k at national prices, and in a low cost area about as far as $141k.
Where this lives in Promi
Financial Profile page. Your cost-of-living tier, and a Local comparison drawn from your ZIP code.
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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