Nerd Wallet Cost Of Living (2024)

FAQs

Is the NerdWallet cost of living calculator reliable? ›

NerdWallet's cost of living calculator is powered by data from The Council for Community and Economic Research (C2ER). According to the council, “C2ER produces the Cost of Living Index to provide a useful and reasonably accurate measure of living cost differences among urban areas.

An Accurate Cost of Living Comparison

These calculators are only as good as the data they use. Whether you're looking for cost of living comparison by state or to compare cost of living between cities, you'll want the most current information. Most calculators are out of date.

How cost of living is calculated. Typically, cost of living is determined by comparing the prices of a range of goods and services on which consumers spend their money. Costs are broken down and weighted by category, like health care, food or housing.

Gusto's paycheck calculator is one of the most detailed on the market. Some other calculators may only include estimations of federal and state taxes, but Gusto lets you enter data directly from your W-4 and state tax filings in order to get the most accurate picture of take-home pay.

If one wants the most accurate measure of inflation as it impacts households, one should use the CPI, as it only picks up prices of products purchased by households. That is why economists sometimes refer to the CPI as the cost-of-living index.

Cheapest Southern States to Live In

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.

Numbeo's data points on crime have been criticized by academics and by the media as unreliable and, at times, misleading.

The cost of living in 2024 has continued to increase. The Consumer Price Index showed prices increased 3.2 percent between February 2023 and February 2024, according to the Bureau of Labor Statistics.

Generally, experts recommend spending no more than 30% of monthly pre-tax income on housing. However, it's not always that simple. According to the U.S. Census Bureau, between 2017 and 2021, over 40% of renter households (19 million) spent more than 30% of their income on rent.

What is the rule of thumb for cost of living? ›

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.

Hawaii ranks No. 1 as the most expensive state based on monthly household bills. Hawaii residents spend an average of $3,091 each month on utilities, rent/mortgage and other common household costs. Residents spend 45% above the national average.

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 median price of a single-family home in the United States is $273,992.

To calculate cost of living raise, employers can apply the percentage change in the CPI to the employee's salary; for instance, if the CPI increases by 2%, an employee's salary would also increase by 2% to match the rise in living costs.

Inflation measures the increase in the price of goods and services. Or, the decrease in the buying power of the dollar. Cost of living measures the change in price, up or down, of the basic necessities of life like food, housing, and healthcare.

What Does it Mean When the Cost of Living Index Is Below 100? Cost of living indexes have a baseline of 100, with figures above or below representing a city as more expensive or less expensive. An index below 100 means the region or area is less expensive to live in than the national average.

Expenses typically factored into cost of living calculations include housing, food and taxes. It may also include such expenses as transportation, health care, entertainment and education. Cost of living calculators are useful in comparing the expenses associated with different cities or regions.

The 50/30/20 budget recommends that for sustainable comfort, 50% of your salary should be allocated to your needs, such as housing, groceries and transportation; 30% toward wants like entertainment and hobbies; and 20% toward paying off debt, saving or investing.