In tough times like these, you need to know precisely the price you're paying for everything you buy. But knowing the true price of one of our largest purchases -- location -- is particularly tricky.

Will your living standard be 28 percent lower or only 5 percent lower if you move to Seattle with its cosmopolitan coffee houses, but rainy weather, rather than stay in Kansas City with its delicious Bar-B-Q, but scary tornadoes?

If you're indifferent between these two cities at a 5 percent difference in living standards, you'd surely want to stay in Kansas City at a 28 percent living standard price. And since purchasing Seattle by moving there is not refundable, getting the price right is really important.

Comparing living standards in two cities is vastly more complicated than it may seem. Take housing costs, which are 72 percent higher in Seattle than KC. If one third of your budget is spent on housing, you might think you need a 24 percent (one third of 72 percent) higher salary in Seattle just to compensate for the higher housing costs.

But this assumes that your budget (your annual spending) and your salary are the same thing, which they aren't. You have to pay taxes and save for the future, so you can't generally spend anything close to what you earn. Of course, if you're Richie Rich and have a huge trust fund, you can spend a lot more than you earn year after year for the rest of your life, provided you don't lose your shirt in the market.

The "rest of your life" is another reason this 24 percent measure can be miles off base. Suppose you are 55 and will retire at 65 and don't want to move again. Then moving to java city means paying higher housing costs for the rest of your life. And getting paid 24 percent more for only ten years won't necessarily cover what may prove to be decades of 72 percent higher housing costs.

Uncle Sam giveth as well as taketh. If you move to Seattle for a 24 percent higher salary, the move will likely boost your future Social Security benefits as well as those your spouse can collect on your earnings record.

Hum? This does sound involved. Yes, and I haven't mentioned that different housing costs have different tax implications. If you buy, rather than rent, you can, each year, deduct the extra mortgage interest and property taxes you'll face provided you itemize your deductions. Hence, understanding your own extra cost of housing in Seattle requires, in effect, filing today all your future federal and state income tax returns!

And these mind-numbing as well as mind-sickening calculations can't ignore the fact that standard deductions will rise through time, thanks to the tax system's indexation to inflation, while mortgage payments will not, assuming you'd take out a standard fixed-rate mortgage on the Seattle home. So you may itemize for the next eight years, but not the following 12, if, for example, you take out a 20-year mortgage.

Got the complexity point? Or should we toss in differences between the Seattle and KC jobs in service- and age-related pension benefits, differences in employer 401(k) contributions, and the cost of shipping your mother-in-law back and forth from KC to Seattle to see the grandkids.

There are tools on the web that tell you the cost of living in different cities. But are they really useful given that they leave out so many issues that are specific to you?

The best of these calculators is produced by C2ER (the Council For Community and Economic Research) and featured on prominent financial websites, such as CNNmoney.com. You plug in your current salary and where you now live, and it will tell you how much more you need to earn to enjoy the same living standard if you move to a different city.

The calculator accounts for differences in the costs of groceries, housing, utilities, transportation, and healthcare. But it ignores your age, your current and future federal, state, and local taxes, your Social Security benefits, your fringe benefits, your mother-in-law, and many other factors -- all of which can make a big difference.

The C2ER calculator also gives you the same answer no matter how you spend your money. So if you have a stronger (weaker) preference than the average for housing, using this calculator in thinking about moving to a city with high housing costs will understate (overstate) the extra earnings you need to be indifferent.

Fortunately, we now have a tool available to assess A) how much moving from job A to job B will alter your living standard on a lifetime basis, given what the two jobs are paying and B) the difference in pay required to make you whole, i.e., provide you with the same living standard in job B as in job A.

The tool, called ESPlannerBASIC, is a life-cycle personal financial planning program, which I and other economists co-developed. The program is provided for free by my company. It's available at www.esplanner.com/basic and incorporates all of the aforementioned factors and many others. It also makes all those nasty future tax and Social Security benefit calculations and determines your sustainable living standard per household member in less than two seconds.

So how do ESPlannerBASIC and C2ER differ in assessing the cost of living in Seattle?

Here's a simple example -- Bill and Sally Owens, a hypothetical 55 year-old, childless couple living in Kansas City. Billy and Sally are sick of Bar-B-Q and dying for a some new adventures in caffeination. They are looking at jobs in Seattle.

Billy and Sally each earn $75,000 working for companies based in India that offer no fringe benefits. They plan to retire at 65. Conservative investors, they are planning based on a 2 percent return after inflation. Billy and Sally have $300,000 in regular assets and $250,000 each in IRAs to which they contribute $3,000 each per year. They each expect to collect $2500 (in today's dollars) per month from Social Security starting at age 65. They own a $400,000 house with a $200,000, 15-year mortgage and a monthly payment of $1,600, a $4,000 per year property tax bill, a $1,000 per year homeowners insurance bill, and a $2,000 per year maintenance bill. Since they telecommute, they can move to Seattle without switching employers.

As you can verify at https://www.areavibes.com/salary-calculator, C2ER says Bill and Sally need to earn $192,192 to have the same living standard in Seattle as they enjoy in Kansas City earning $150,000. Since C2ER is equating earnings with living standard and ignoring the couple's other resources (i.e., assets and Social Security) that help determine its living standard, and since $150,000 is only 78 percent of $192,192, C2ER is also saying that Bill and Sally's living standard will be 22 percent lower if they move to Seattle to jobs that pay the same salaries as they are now earning.

C2ER's explanation for the 22 percent living standard decline is that housing in Seattle is the aforementioned 72 percent more expensive, groceries are 23 percent more expensive, utilities are 13 percent more expensive, transportation is 13 percent more expensive, and healthcare is 25 percent more expensive.

Running the Owens through ESPlannerBASIC delivers different results. The program lets you enter housing expenses separately and determines how much you can and should spend on a discretionary basis each year to smooth your living standard through time.

In moving the Owens to Seattle, I assumed they buy a house that's 72 percent more expensive than their current house and that they borrow the extra $288,000, leaving them with a total mortgage of $488,000 and a monthly payment of $3,904. I assume the property taxes, insurance, and maintenance costs are also 72 percent higher in Seattle.

According to ESPlannerBASIC, Billy and Sally can spend $78,898 per year on a discretionary basis if they stay in Kansas City. This discretionary spending is over and above their housing costs, tax payments, contributions to IRAs, and saving for retirement.

If Billy and Sally move to Seattle, their sustainable discretionary spending drops to $72,552 per year or to $64,894 (measured in Kansas City dollars) after you account for the higher cost of groceries, utilities, transportation, and healthcare.

[Note, according to the Bureau of Labor Statistics data (see ftp://ftp.bls.gov/pub/special.requests/cpi/cpiri05-06_2007.txt), households typically spend 22.1 percent, 7.6 percent, 26.2 percent, and 9.2 percent, respectively, on these non-shelter budget items. To arrive at $57,410, I divided $64,185 by 1.118, where .118 is .221 x .23 + .076 x .13 + .262 x .13 + .092 x .25].

Hence, if we measure living standard based on discretionary spending, the move from Kansas to Seattle reduced Billy's and Sally's living standard not by 22 percent reduction as suggested by C2ER, but by 18 percent. But even this overstates the living standard difference. The reason is that in Seattle, Billy and Sally will be sitting on a house worth $288,000 more dollars. If Billy and Sally take out a reverse mortgage at say, age 75, that let's them borrow $150,000, they'll end up at age 100 (if they last that long) with roughly the same equity in their home after paying off the reverse mortgage as in Kansas City. In this case, their living standard in Seattle is only 15 percent lower. That's still a good sized drop, but it may be worth it from Billy's and Sally's perspective.

C2ER is also very far off base with respect to the requisite increase in earnings needed by Billy and Sally to have the same spending power. According to ESPlannerBASIC, the salary increase needed to keep Billy and Sally whole is 55 percent, not 28 percent. The reason is that Billy and Sally are only going to work another ten years and every extra dollar they earn is being taxed at a 33 percent rate federal marginal rate, although at a zero state income tax rate since Washington has no state income tax.

Clearly, if Billy and Sally are really concerned about maintaining their living standard, they may need to work 55 percent harder or longer for a decade. That’s a big price to pay for better coffee shops, not to mention rain and fog.