A woman pushing a card through a grocery store reaches onto the shelf for a product from the produce section.

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

7 min read

Published December 13, 2024

Table of contents

Key Takeaways

The Bureau of Labor Statistics defines the cost-of-living index as “changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living.”
The cost of living varies significantly from state to state and sometimes even city to city.
Personal finance practices, like budgeting for monthly expenses and using credit cards responsibly, could help people manage living expenses.

Within the United States, your cost of living depends on many factors. As the Bureau of Labor Statistics (BLS) defines it, the cost-of-living index measures “changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living.” The measure includes prices for necessities, like food and clothing, as well as other factors, like education, health, and water quality. 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.

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 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, including insurance costs, doctor visits, medications, and medical supplies
Childcare, 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, based on the Department of Housing and Urban Development’s Fair Market Rents
Income and payroll taxes
Transportation, including both gas costs and public transportation costs
Other necessities, including personal care products and household supplies

Average cost of living across the U.S.

The U.S. is a massive, varied country. Economic conditions like housing prices and minimum wage differ across states, cities, and even neighborhoods. Understanding the living cost in different areas could help you make informed decisions. If you’re considering a cross-country move, a cost-of-living comparison could help you narrow down your options. The information below was reviewed in January 2024 and applies to a single adult’s “required annual income before taxes,” so the figures don’t include childcare costs. In many cases, adding a child to the calculation nearly doubles the cost, according to the Living Wage Calculator.

According to MIT’s calculator, the average person living in New York State would have to make $44,627 a year before taxes to make ends meet comfortably. However, New York City is a particularly expensive city, so it skews the state's average. Two people in different parts of the state may have vastly different living costs. To cover necessary expenses in New York City, a person would need an annual salary of $46,826. Just a few hours away, the cost is much lower. On average, you would need only $32,995 to cover the same expenses in Rochester.

California is home to several major cities, which make the average cost of living relatively high at $44,175. The average cost of living within the San Francisco Bay Area is $49,329. However, there are cost discrepancies even within that region, as San Francisco is one of the nation’s priciest cities. According to the U.S. census, San Francisco city’s median household income is $126,187, which may point to a higher overall cost of living. The average person living in the Los Angeles region may not have to make quite as much as they would in San Francisco. The required annual income before taxes comes out to $44,783.

To meet your needs in D.C., as a single adult, you’d have to make $46,082 a year. However, your living cost may vary across DC’s significant metropolitan area.

Further south, the cost of living is typically lower. To cover expenses in North Carolina, you would have to make at least $35,012 a year. South Carolina is slightly more affordable, at $34,806.

The average cost of living is often lower in states with fewer big cities. In North Dakota, for example, you would need an annual salary of $31,937 a year to cover necessary expenses. Neighboring South Dakota is slightly more affordable, with a living wage of $31,509.

Florida‘s average required annual income is $36,848. The state is famously a popular vacation spot and retirement destination. These factors may influence the cost of living in certain areas.

Texas is a massive, diverse state. It contains both bustling cities and vast, sparsely populated rural areas. The state’s overall average required annual income is $34,931. Like New York, though, the cost of living varies drastically across Texas. In the Austin area, the required annual income is $37,754. On the other hand, a region near the New Mexico state border called Terry County requires only $30,521 a year for the same expenses.

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 monthly budget that includes your total income, expenses, and financial goals may provide a valuable foundation. Many budgeting strategies and frameworks are available. The right fit for you depends on your unique circumstances and location.

Many adults have to pay for expenses and must 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.

Did you know?

If too many credit card payments or a card with a high interest rate are contributing to your monthly expenses, a balance transfer credit card from Discover may be able to help you consolidate credit card debt on one card and lower the amount of money you spend on interest.

Learn More

The cost of everyday needs like housing, food, and transportation varies widely in different parts of the country. Understanding the differences could help you determine the best places for you and your family to live.

Important Information >