Nerd Wallet Cost Of Living (2024)

FAQs

How to determine cost of living? ›

Strictly speaking, the cost of living measures how much the basics of life will cost: shelter, food, transportation, health care, etc. Your standard of living is measured by how much comfort you can afford in goods and services. How you view your standard of living can be more subjective.

The Cost of Living in the United States

The average household in the United States spends $61,334 a year on expenses. On average, 34.9% of spending, or roughly $1,784 a month, is dedicated to housing and housing-related costs.

The cost of living in Texas is 7% lower than the national average. Housing is 17% lower than the national average, while utilities are 3% higher. When it comes to basic necessities such as food and clothing, groceries are around 4% lower than in the rest of the country, while clothing costs 4% lower.

A cost-of-living index is a theoretical price index that measures relative cost of living over time or regions. It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as prices vary.

Try the 50/30/20 rule

The rule entails spending 50% of your monthly income on essential expenses such as rent, monthly bills, and groceries, spending 30% on non-essential purchases such as going out to eat, and putting 20% into your savings account.

The CPI helps households understand their overall cost of living from month to month, while the core inflation index is a preferred gauge from which to make important government policy changes.

On average, an individual needs $96,500 for sustainable comfort in a major U.S. city. This includes being able to pay off debt and invest for the future.

Mississippi: According to World Population Review, in 2023, Mississippi holds the title of the cheapest state to live in the United States. Its cost of living index is 85, and overall costs in the state are 17% lower than the national average.

Average living expenses for a single person

Again, living expenses vary significantly by location, but we can use some average numbers. The average monthly living expenses for a single person in the USA are $3,189, which is $38,266 per year.

Cost of Living in Florida vs Texas

Florida offers some of the best living costs in the country but Texas is still the winner with a cost of living index that is actually lower than the nation average. The median listing price of a house in Texas is also $274,500 compared to $300,00 in Florida.

What salary do you need to live comfortably in Texas? ›

What's considered a “good” salary in Texas depends on your household size and lifestyle, but most Texans make between $45,000 and $100,000 annually. Texas cities have differing costs of living, of course — Austin is much pricier than Amarillo — so where you live in the Lone Star State also matters.

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

Discover why C2ER's Cost of Living Index is the most trusted resource for historical and current cost of living data since 1968.

But some economists expect annual inflation to creep up to 3.5% from 3.2% in March CPI numbers. But the reality is that even as the inflation rate slows, it's unlikely the cost of many individual items will decline. They just won't rise as fast.

Our 50/30/20 calculator divides your take-home income into suggested spending in three categories: 50% of net pay for needs, 30% for wants and 20% for savings and debt repayment.

The formula used to calculate COLA utilizes an average of the CPI-W from the third quarter of the current year (A) and the third quarter of the previous year (B). The formula is (A-B) / B * 100 = I. Usually calculated in December, the adjustment begins in January of the following year.

2022 calendar year COLA factor will be 15.93%. Calculate the COLA amount by multiplying the 2023 calendar year COLA factor to the base allowance. The 2023 calendar year payable COLA amount is $159.30. The new allowance is $1,159.30.