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want to update fields in 2 differnet objects using formula field

I am having 2 objects "account" and "contact" with common field "city" which is a lookup field. If i update city field in account (eg:mumbai to chennai) it must update it in all fields of contacts to mumabai to chennai in contacts also. How can i do it using formula fields
Because there can be many contacts for a single account, you may not be able to use formula fields.
You can use a before or after trigger to loop through all the contacts and then use an Update DML statement to update the contacts.

Satish Kumar