How Expensive Is It To Live In The U.S.
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How To Calculate The Cost Of Living In The U.S.?

Updated on October 28, 2020 12:39 pm
Cost of living

Whether you are looking for employment in the U.S. or thinking of relocating to the U.S., having a picture of what it cost to live in the country is a valuable insight.

To begin, the cost of living is the amount of money you need to cover your basic living expenses like housing, food, clothing, health care, transportation, taxes, education, etc. In other words, a certain amount of money needed to sustain a decent standard of living.

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The U.S. is one of the largest countries in the world by landmass with varying costs of living depending on the state, city, or region. The cities can be more expensive to live in than in the suburbs or the countryside. Even the suburbs can be expensive depending on where you live. Cities like New York, San Francisco, Boston are some of the most expensive cities while Buffalo, Indianapolis, Columbus are some of the cheapest.

Why do people move to the U.S.?

The United States is a major attraction for professionals all around the world seeking a high-quality working environment, lofty salaries, high living standards, and a convenient lifestyle.

Students around the globe flock to the country to study in top universities to get the best quality education. Moving to the United States is an aspiration for many people. It is not a surprise that the U.S. is the top destination country for migrants (a total of 50.7 million international migrants) and home to thriving multi-cultural expat communities.

Asian Indian is one of the fastest-growing minority groups in the U.S. The Indian population in the U.S. has risen by 49% from 2010 to 2018 (from 1.78 million to 2.65 million) as per the Census Bureau report.

The top 10 cities with the highest Non-resident Indians (NRIs) population are New York, Chicago, San Francisco, San Jose, Washington (D.C.), Los Angeles, Dallas, Houston, Philadelphia, and Atlanta.

10 states with Indians

Whichever city you decide to move from your country of origin, the one thing to take into account is the foreign exchange rates. The cost of currency conversion from your home currency to dollars and fees for money transfers can increase your expenses. If you need to send money internationally, sending money online is quick, safe, and will save you money with every transfer. Compare top international money transfer companies to get the best exchange rates, transfer speed, and the lowest fees.

Now, let's come to the factors that determine the cost of living in the U.S.

The cost of living is quantified by collecting the prices of basic goods and services in different cities across time which are compiled into indices. Such indices include prices of housing, food, health care, utility services, and various other goods and services required for a certain quality of life. The U.S. Consumer Price Index (CPI) is one example of the cost of living index compiled by the U.S. Bureau of Labor Statistics.

The cost of living index gives you the difference in percentage in the cost of living between different cities. When comparing the cost of living index, the value 100 is considered as the U.S. average. For example, Hawaii has a high cost of living index in the U.S. at 192.9, which means the cost of living is 92.9% higher than the country's average.

Below are some of the major factors influencing the cost of living.

Cost of Living in the USA: Monthly Salary and Living Expenses

The cost of living is related to income level. The income is higher in cities where the cost of living is also high.

Average Monthly Salary (After Tax) & Living Expenses

Cost of Living

Cost of Living in the USA: Housing & Rent

Housing costs are a major factor in determining the cost of living. The monthly rent varies depending on the type of housing and the location. Places away from the city are less expensive. Small towns and the countryside are more affordable. However, the living standard may be different.

Many immigrants with permanent residents status tend to buy a property and pay a mortgage instead of paying rent. After all, homeownership is central to the American Dream.

Rent (per month)


Cost of Living in the USA: Education Cost

Education in the U.S. can be very expensive and the fees vary widely depending on the institution. For international students, the education costs can be even higher. The pricing structures are also different for public and private institutions. One good news is that the top universities in the U.S. provide financial aid packages for students or international students with financial need.

Given below is the yearly average cost of schools and colleges for the academic year 2017-2018 as per the National Center for Education Statistics.


Cost of Living in the USA: Utility Charges

Whether you are paying a mortgage or rent, you need to pay for utility services like electricity, water, garbage, heating, etc every month. The cost differs based on the location.

Utility Charges (monthly)


Cost of Living in the USA: Healthcare Expenditure

The healthcare system in the U.S. is top-notch but without proper health insurance, your medical expenses will be extremely high. For a normal Doctor's check-up, the fee can range from 100-200$, medicine for cold for a week can cost you around 10-30$, and 6-10 $ for antibiotics. A person in the U.S. pays a monthly insurance premium of $400-500 but depends on the type of insurance taken.

The U.S. has one of the expensive health care services. You need to have comprehensive health insurance to get the best medical treatment regardless of the place you live in. If you have parents or friends visiting the U.S., getting travel medical insurance is highly recommended.Here is the per capita total health care expenditure of the U.S. as compared to other countries according to the OECD Health Statistics 2019.


Cost of Living in the USA: Transportation Charges

Public transportation in major cities in the U.S. includes buses, trains, subway, taxi so it is very convenient. If you live nearby to the cities, you can also use your own private vehicle to commute. The expenses will differ because the gas price is not the same in many places.

Transportation Charges



The cost of living in the U.S. is on the rise as time goes on. It is estimated to be more than doubled in the last 3 decades. Despite the rising expenses, the U.S is not the most expensive country in the world. It is far cheaper than in several European cities. A low cost of living doesn't always mean the best choice. It is also wise to consider the quality of life that a place can give you which can be access to better health care, a good neighborhood, and a better standard of living.

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