I thought I'd have fun and see how much where you live matters. So I used the cost of living calculator at Money Magazine to determine different cities I'd live in.
Now, starting out I put in Boston, MA and moving to Seattle using a $100k salary. Woohoo. I found out that I would only need $84k to live in Seattle. Wow a 16% decrease. Awesome. Basically housing and utilities will cost us 20% less, groceries and healthcare will cost 8% less, and transportation is equitable.
Now to move back to San Diego, CA we'd need $108k instead of $100k, which is an 8% increase. Gee whiz. How so? Well housing is about 40% more expensive, however utilities are 23% less. And transportation is 5% more, but healthcare is 8% less and groceries will be 2% less. So it computed 8% more money is needed.
Phoenix, AZ would only cost us $74k to live on instead of $100k in Boston. Wow. That's amazing. Groceries will be 17% less, housing will be 40% less, utilities will be 27% less, transportation 6% and healthcare 22% less.
So where you live matters. It really affects your ability to save and live within your means. So does this mean you should move to an area solely for the cost of living? No. But it probably should be considered when looking at job offers. And how cost of living will affect the lifestyle you desire to lead.