Chicago is the third largest city in the US. It’s known for deep-dish pizza, incredible architecture and improvisational comedy – but how does it compare to other cities in terms of living expenses? The cost of living in Chicago is affordable compared to other large cities, but a move to Chicago can still be a major expense.
Named by Business Insider as one of the best cities for young professionals, Chicago might be a terrific opportunity if you are looking to advance in your career.
What is the average cost of living in Chicago? The answer relies on three important expenses: housing, utilities and taxes.
Housing Costs in Chicago
According to NerdWallet, the median price for a three-bedroom home in Chicago is $454,905. That is well below the million-dollar averages of New York City and San Francisco. The estimated monthly mortgage payment would be just over $1,600. If you aren’t ready to purchase a home, the average two-bedroom apartment would cost you $1,500 a month to rent.
To further break down housing costs, the average price per square foot for real estate in the Windy City is $230. Again, this is well below the average of Manhattan, San Francisco and even Boston. While less costly than other major cities, housing prices in Chicago are 30% higher than the national average.
Utilities Costs in Chicago
Whether you choose to rent or buy, you have to budget for utilities. In Chicago, the average cost of utilities for an apartment, including heat, electricity and gas, ranges from $112 to $176, depending on the square footage of the unit. However for homeowners looking to lower these costs, there are tools like green energy loans, which can help you save on utilities in the long run by investing in energy-efficient appliances to reduce your bills.
Taxes in Chicago
Chicago, as part of Illinois, has the second-highest property taxes in the country, which are twice the national average. Unfortunately, property taxes are expected to increase for Chicago residents. In fact, transportation, phone service and amusement taxes are all expected to rise in 2018.
Rising taxes are not a new concern for Chicagoans. As of 2016, sales tax in Chicago became10.25%, the highest in the nation. In 2017, the flat income tax rate rose from 3.75% to 4.95% and is expected to increase again next year. All these taxes and fees contribute to a higher cost of living in Chicago.
If you are looking to move to a large city, Chicago could be a smart choice. According to a cost-of-living comparison conducted by GoBankingRates, to comfortably live in Chicago having a household income of at least $68,671 is ideal to cover necessities, discretionary spending and savings. If your income is below that, though, that doesn’t mean Chicago is off limits.
There are ways to make extra money to better afford the cost of living in Chicago.
You could even consider a personal loan to help with moving expenses. No matter what draws you to the Windy City, there is plenty to do once you get there.