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Reducing cost of living impact on remote work salaries

Search Remotely Remote Workers and Cost of Living

The main attraction for working from home is the bucolic lifestyle. Often the places that provide tranquility are often the lowest cost.

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Now more than ever, where to live while tele-working is no longer an afterthought. As someone working from home or working from anywhere.  I’m sure you have thought about ways to reduce your cost of living while trying to stretch your hard earned money. There is ample research to show that workers working from home can save money due to lowered commuting costs, expenses related to professional attire and dry-cleaning.

Remote workers experience increased costs in some areas

Contrary to earlier studies, there are other studies of late showing that some costs can increase. And, remote workers working on remote freelancing gigs can see increases in internet and phone services, electricity and even food. Check out the graphic below provided by

Work From Home Remote Work Costs Estimates


Considering these work-related costs that are borne by the remote worker, it is ever more important to watch your household budget. The reason why living within and even below your means during a recession  and periods of increasing inflation indicates a high probability that your salary will not increase.

Real wages fall as demand for labor wanes

The International Monetary Fund (IMF) gives a long-winded explanation. “As inflation increases, investment falls, and the capital stock declines decline over time. While consumption may decline as well, this has no direct bearing on capital accumulation. The declining capital stock reduces GDP and makes labor less productive. Therefore, labor demand declines and real wages fall.

The short of it is this. The IMF does not anticipate rising salaries to compensate for increases in inflation. The definition of cost of living is a measurement of just how much money will be required to maintain the standard of living for which you are accustomed within a given location.  What type of items are included in the cost of living? Basically, anything we need to survive from day to day: food, a place to live, transportation, water, electricity, gas, heat, clothing, healthcare and childcare.

Importance of cost of living calculations

The measure of the cost of living is so vital to a nation’s economy that it is often calculated and tracked in regular intervals. Its ebbs and flows associated with these costs show how the very basic necessities needed for survival decrease or rise over time. lThe data is then reported upon to governments and leaders who then take the statistic to drive public policy.  The cost of living index is calculated by the Economic Policy Institute and the Council for Community and Economic Research.

Even though we may not have much say or input on how much items cost, the good news is remote workers weld tremendous sway over where we choose to live.  This is one of many advantages of tele-work and working from home. Remote workers can practically chose anywhere to live (remote first employers do prefer, however, that remote workers remain within the geographical region of entity employing them).

Purchasing power varies by geographical region and state

As the cost of living varies from region to region and state to state, several nonprofits develop and post mathematical tools, algorithms, and calculators on the internet for ease of comparison.

One such organization is  The Cordell Hull Foundation of International Education provides such a tool. To use the estimation tool, it is suggested that the cost of living in New York City is used as a baseline and set at 100. Any living area with an index greater than 100 can be interpreted to mean that the cost of living is higher than that of New York City. A living area with an index value less than 100 means that the cost of living is lower than that of New York City. See the table below.

Search Remotely Local Purchasing Power

If you’d like to try a similar tool for yourself that is based upon your individual circumstances, click here for Numbeo Cost of Living Tool.

Top 10 cities where $100,000 goes the farthest

In addition to this information, Smart Asset made calculations after analyzing income (after taxes) of almost 80 US cities to demonstrate where a $100,000 salary can be stretched the farthest.

The top ten cities where $100,000 salary goes a long way are:

  1. Memphis, Tennessee
  2. El Paso, Texas
  3. Oklahoma City, Oklahoma
  4. Corpus Christi, Texas
  5. Lubbock, Texas
  6. Houston, Texas
  7. San Antonio, Fort Worth and Arlington, Texas
  8. St. Louis, Missouri

Implications for the Remote Worker

This data show that the remote worker must be as shrewd as the traditional in-office worker when managing his money. It is not enough to think that money saved due to lowered commuting costs, vehicle maintenance, and professional wardrobe upkeep will cover higher costs related to internet, phone service, office supplies and the like. In recessionary periods we all should be watching our bottom line.


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