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What is the Average Cost of Living in the U.S.?

5 min read

Last Updated: March 18, 2026

Table of contents

Key Takeaways

The cost of living is what you need to spend on basic expenses , including food, shelter, energy, clothing, transportation, and healthcare.
The cost of living varies from state to state and sometimes even city to city.
Manage your living expenses with proper budgeting and by using credit cards responsibly.

In the United States, a person’s cost of living depends on many factors, including where you live and prices for necessities like food, shelter, and clothing. Typically, the cost of living increases over time with inflation, but some Americans’ wages don’t increase at the same pace, which may lead to financial challenges.

If you struggle with the cost of living, credit cards and loans may be helpful tools for earning rewards or financing major purchases. However, using credit for necessities you couldn’t otherwise afford could lead to mounting debt.

If you find yourself leaning on credit to make ends meet, you might consider reviewing your cost-of-living expenses and seeing if there are any areas where you can change your spending habits and save.

How cost of living is calculated

Organizations may use several methods and metrics to estimate the cost of living. The U.S. Bureau of Labor Statistics (BLS) uses The Consumer Price Index (CPI) to determine the changing costs of resources like shelter, transportation, food, clothes, and medical needs. The BLS explains that they calculate the measure based on the spending patterns of urban consumers, clerical workers, and wage earners. The Social Security Administration bases annual cost-of-living adjustments on the CPI, making it a helpful cost of living index.

The Massachusetts Institute of Technology (MIT) used the CPI and other metrics to develop its Living Wage Calculator. The calculator shows an estimate of how much money a full-time worker would have to make in a specific location to cover the following basic needs:

Food, based on grocery cost estimates from the U.S. Department of Agriculture
Healthcare costs, including health insurance, doctor visits, medications, and medical supplies
Childcare costs, including daycare and babysitters
Civic engagement, including a wide range of expenses like hobbies, education, entertainment, books, pets, and toys
Broadband, based on cell phone service costs
Housing costs, based on the Department of Housing and Urban Development’s Fair Market Rents
Income tax and payroll taxes
Transportation costs, including both gas and any public transportation cost
Other necessities, including personal care products and household supplies

Average cost of living across the United States

The United States is a big country and economic conditions like housing prices and minimum wage differ across states, cities, and even neighborhoods. Understanding what living cost you’ll pay in different areas could help you make informed decisions.

Say that you’re considering a cross-country move. A cost-of-living comparison could help you narrow down your choices.

The information below was compiled in February 2025 and applies to a single adult’s “required annual income before taxes.” This means the figures won’t include childcare costs. In many cases, adding a child to the calculation nearly doubles the cost, according to the Living Wage Calculator.

States with the highest cost of living

According to MIT’s calculator, these states have the highest cost of living in the U.S.

Hawaii ($62,233)
Massachussets ($60,080)
California ($59,740)

Keep in mind that certain cities are far more expensive than others within the same state and can skew the state average. For example, to cover necessary expenses in New York City, a person would need an annual salary of $60,040 on average, but just a few hours away in Rochester, New York, a person would need $47,488 annually to cover these same expenses.

While metropolitan areas typically have higher costs of living, they also tend to have higher income averages. In the San Francisco-Oakland-Berkeley area, where the average cost of living for a single adult with no children is $64,286, the median salary is $109,100 (according to SF.gov).

States with the lowest cost of living

The calculator found these states to have the lowest cost of living.

West Virginia ($40,415)
Arkansas ($40,540)
South Dakota ($41,081)

Other noteworthy findings

Also worth mentioning from this economic research:

Texas is a massive, diverse state. It contains both bustling cities and vast, sparsely populated rural areas. Like New York, the cost of living varies drastically across the state.
As a popular vacation spot, snowbird getaway, and retirement destination, the cost of living in Florida varies based on the specific area, and even seasonally.
States with fewer big cities, like North Dakota, tend to have a lower average cost of living.
The cost of living is also generally lower in southern states, like North Carolina and South Carolina, relative to states in the northeast.

How to manage cost of living expenses

Certain tools can help you manage your living expenses and maintain your financial well-being no matter where you live. A family budget calculator can help you set a monthly budget and provides a great foundation. This should include your total income, (realistic) expenses, and financial goals. This budget should also include debt payments and retirement savings to ensure long-term financial health. Track spending throughout the month to find areas that aren’t essential and that you could cut back on.

There are different budgeting strategies and frameworks that could work for you. The right fit depends on your unique circumstances and, as we’ve seen above, where you live.

Did you know?

If a card with high interest adds to your average monthly expenses, a balance transfer credit card from Discover^® may be able to help. You could consolidate credit card debt on one card and lower the amount of money you spend on interest.

Learn More

Many adults have expenses and manage debts. If you’re struggling to pay down debts, some strategies could help you prioritize your bills. You may also want to use tools like balance transfer cards to make payments more manageable.

The bottom line

The cost of everyday needs like housing, food, and transportation varies widely in different parts of the country. By understanding the differences, you can determine the best area for you and your family to live. This all varies based on your household size, household income and other factors, but getting a clearer picture can set you up for greater security and financial success.

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