How To Calculate The Cost Of Living In The U.S.?

Updated on October 28, 2020 12:39 pm

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.

Related Article: Steps To Take On Becoming An NRI

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.

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 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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Money Transfer FAQ's

Understanding IBAN: What Is It and Why Does It Matter?

If you have ever transferred money internationally or received funds from abroad, you have likely come across the term IBAN. You may have wondered, what is an IBAN number and why is it important. This guide offers clear answers.Here, you will find everything you need to know about IBANs, including what it is, how to find your IBAN, why they exist, and how they differ from a SWIFT code.What is an IBAN?IBAN stands for International Bank Account Number. It is a standardized format used to identify bank accounts across countries. The purpose of an IBAN is to ensure that international transactions are processed accurately and efficiently, minimizing delays and errors.An IBAN can contain up to 34 alphanumeric characters. Its structure typically includes:Country code (2 letters): Indicates the country where the bank is locatedCheck digits (2 numbers): Used to validate the IBANBank identifier: Specifies the bank that holds the accountBranch code (if applicable): Identifies the specific bank branchAccount number: The recipient’s unique account numberIBAN numbers from different countries look like this:France: FR1420041010050500013M02606Germany: DE89370400440532013000United Kingdom: GB82WEST12345698765432Key Banking Codes Beyond IBAN Besides the International Bank Account Number, there are two other money transfer codes you should know about:ABA routing number: Also known as Routing Transit Number (RTN), this is a 9-digit code that uniquely identifies your US bank for domestic transactions. It appears as first nine digits on the check—located on the left side before your account number. This number is vital for direct deposits, bill payments, Automated Clearing House (ACH) transfers, tax refunds, and wire transfers. Note that some banks use different routing numbers for wire transfers versus checks or ACH transactions. Always confirm the correct ABA routing number with your bank before initiating transfers to avoid delays.CHIPS: When sending high-value money through wire transfers, you may need a CHIPS UID. CHIPS stands for Clearing House Interbank Payments System. It is a 6-digit code that secures your transaction; it contains all essential details such as your name, account and routing numbers, and address in one encrypted reference. By using this identifier, banks can verify and settle transfers efficiently while maintaining strict confidentiality.How to Find Your IBANSince an IBAN is often required for international money transfer, it's helpful to know how to locate yours. Here are four common ways to find it:Bank statement: Your IBAN may be printed on your monthly statement or passbook.Bank’s website or app: Some banks offer tools to create or display your IBAN.Online banking: Most banks list your IBAN on your account overview page.Customer support: You can also reach out to your bank's customer support, and they will provide it to you.IBAN vs. SWIFT Code: What is the Difference?IBAN stands for International Bank Account Number, whereas SWIFT stands for Society for Worldwide Interbank Financial Telecommunications. While they both are used for international money transfers, they serve different purposes.FeatureIBAN NumberSWIFT CodePurposeIdentifies individual bank accountsIdentifies banks and financial institutionsCharactersUp to 348–11Used in70+ countriesGloballyExampleGB82WEST12345698765432CHASUS33XXXPro tip: When sharing your IBAN for receiving payments, always include the full international format along with your bank’s SWIFT code if required. This ensures smoother and faster processing of global transfers.How Does an IBAN Work in International Transfers?When making an international transfer, you will typically need the IBAN of the recipient, their bank name, and sometimes the SWIFT code of their bank. Here's how the process works:Include the recipient’s IBAN on the cheque before submitting.Your bank will verify the IBAN before initiating the transfer.Once verified, the funds are transferred using a SWIFT message.The recipient’s bank receives the SWIFT message and deposits the money into the appropriate account.If you enter the wrong IBAN, it can cause delays, failed transactions, or—in rare cases—misdirected funds. Always double-check it before sending the money.Do All Countries Use IBAN?All countries have a SWIFT code, not an IBAN number. While the system is adopted in more than 70 countries, some countries rely on an alternative format.Countries that use IBAN: Most of Europe, the Middle East, and parts of Africa and AsiaCountries that do not use IBAN: The United States, Canada, Australia, and China. They typically use routing numbers.Final ThoughtsUnderstanding the IBAN meaning can help ensure that international money transfers are accurate, smooth, and secure. Using the correct IBAN helps avoid transaction delays, processing errors, and unnecessary fees. While IBANs ensure your payment reaches the right account, it's also vital to choose a reliable online money transfer service provider for the best exchange rates and lower transfer costs.Before sending money overseas, always double-check the recipient’s IBAN and compare transfer services to get the most value for your money. If you want to save on fees and get the best exchange rates, CompareRemit makes it easy to compare money transfer providers in real time.Whether you're sending funds to family, making business payments, or paying for overseas expenses, using the correct details—including the IBAN—can make the entire process smoother.Frequently Asked Questions About IBAN (FAQs)Q: Is IBAN a 16-digit number?An IBAN can be up to 34 characters long and includes both letters and numbers. The exact length varies depending on the country.Q: How to get a SWIFT code from an IBAN?It is not possible to directly get a SWIFT code from an IBAN. These are distinct codes serving different purposes. You will need to find the SWIFT code separately—either from your bank's website, account statements, or by contacting your bank directly. Q: What if the IBAN is wrong?If you enter the wrong IBAN, the transaction may be delayed or canceled. In rare cases, it could even result in your money being sent to the wrong bank account.Q: How long does an international transfer take with an IBAN?International transfers using an IBAN typically take 1–5 business days to process. The exact timing depends on factors such as intermediary banks involved, your bank's daily cutoff times for processing transactions, and the efficiency of the recipient's banking system.Q: Can I create IBAN for multiple currencies in the same account?While you cannot create multiple IBANs for a single bank account (since each IBAN is a unique identifier for one specific account), many banks now offer multi-currency accounts. These accounts allow you to send and receive different currencies through a single IBAN.Q: Can I use my IBAN for receiving money from abroad?Yes, you can use your IBAN to receive money from abroad. The IBAN ensures that funds are accurately sent to the correct account.

What is an EFT (Electronic Funds Transfer)? Everything You Need to Know

Have you ever paid any bill online, sent money through your mobile banking app, or used your debit/credit card at checkout? If yes, you have used EFT—whether you know it or not.If you are an immigrant, expat, or a small business owner, understanding what an EFT is and how it works will help you save a lot of time and money, particularly when you are sending money overseas.In this guide, you will learn the meaning of EFT, the working of various types of EFT, its benefits and drawbacks, and how to choose the right service for your requirements.What Is an EFT?EFT, short for Electronic Funds Transfer, is a method of digitally transferring money between accounts—sometimes within the same bank, sometimes between two different financial institutions. It is a secure and fast method, and doesn’t require cash or paper checks.How Does an EFT Work?EFT is just a method of moving money digitally. Whether you are sending money from one account to another, paying for online shopping, or giving out employees’ salaries, your bank uses the electronic system to process the transaction.The key players involved in an electronic funds transfer are as follows:The sender: The sender who initiates the transactionThe receiver: The person or the business that is receiving the moneyBanks or payment processors: They move the money between accounts.EFT networks: These comprise systems like SWIFT, ACH, or card networks such as MasterCard and Visa.There is no involvement of physical cash here. The entire process of transferring funds happens through computers and secure protocols.Types of EFT PaymentsThere are various types of electronic funds transfer methods. Let’s break down the top five types, so that you can make an informed decision on which is the best for your needs.1: ACH transfersACH stands for Automated Clearing House. Mostly used in the United States, it is the perfect method for business invoicing, payroll, and recurring bill payments. It takes 1-2 days for the transfer, and the fee is usually free or very low.2: Wire transfersWire transfers are best for large amounts or urgent transactions, especially overseas. Domestic wires are completed within the same day, whereas international wires may take up to 5 business days, depending on the currency and the bank. It can be expensive due to the sender or receiver fees and intermediary bank charges.3: Debit and credit card paymentsEvery time you tap, swipe, or enter your card details online for payment, you are making an electronic funds transfer. Cards are used for everyday shopping and online transactions. It involves the MasterCard and Visa networks. The risk of potential fraud also exists with cards, so always keep your card details secure.4: Mobile wallets and payments appsThere are various apps built for transfer, such as Google Pay, Apple Pay, PayPal, and Venmo. These apps allow store payments and instant peer-to-peer transfers. They are very easy to use, convenient, and quick. The only limitations are geography and the amount transfer limit.5: ATM transfersElectronic funds transfer also involves using your debit or credit card to transfer or withdraw money through bank ATMs. Some banks charge an ATM withdrawal or transfer fee if you are using a card from another bank.EFT vs. Online Money Transfer Services (like Wise or Remitly)When you think of sending money, especially internationally, you must often think of companies like Wise, Remitly, or Western Union. These are money transfer services, not the same as EFTs, although they often use EFTs to move money in the background.Let’s understand the difference.FeatureEFT (Electronic Funds Transfer)Online Service (like Wise or Remitly)DefinitionA digital method to move money between bank accountsPlatforms built specifically for sending money, often internationallyUse casePayroll, paying bills, and bank-to-bank transfersSending money to family/friends abroad, business transfersTransfer modeUses ACH, SWIFT, or card networksUses EFTs, but adds extra services and layersSpeed and feesDepends on type (ACH: 1–2 days, Wire: Same day)Often faster, but may include service fees and markupsBest forDomestic transfers, direct bank-to-bank paymentsPersonal or business transfers with added featuresIf you are wondering which is the ideal fit for you, then:Use EFTs when you are transferring between bank accounts directly or setting up recurring domestic payments (like rent or payroll).Use money transfer services like Wise, Remitly, etc. when you want a more user-friendly experience for international transfers, especially if the recipient does not have a bank account or you want competitive exchange rates.How Long Does an EFT Take?The amount of time taken for electronic funds transfer depends on the type of EFT.Type of EFTSpeedACH1-2 business daysBank wire transferSame day or next dayDebit card or credit card2-5 business daysMobile wallets and payment appsInstant or near instantATM transfersImmediate authorizationTo find out about the fastest and most cost-efficient international money transfer methods, check out CompareRemit’s rate comparison tool.What Does an EFT Cost?While EFTS are very cost-efficient, the fees vary based on the method or the provider. The fees for ACH transfers are usually free or a nominal fee. Wire transfer can cost $15 - $50, depending on the bank and country or recipient. Cards and wallets may include currency conversion costs for international use. Always double-check hidden fees, exchange rates, or delays before finalizing your transfer.Benefits of EFT PaymentsHere are the reasons for you to consider EFT payments:Affordable: No middlemen, printing, or postage involved.Speed: You can send money anytime, anywhere.Security: It is regulated, trackable, and encrypted.Great for recurring bills: It is perfect for payroll and recurring bills. Set it and forget it.Paperless: There is no requirement for any checks or physical cash.Drawbacks of EFT PaymentsEFT payments have some downsides as well. Here's what you should be cautious about:Reversal: If you have sent money mistakenly to someone, it may be lost. Reversals are not at all easy, especially with bank wire transfers.Frauds: Electronic funds transfers are still vulnerable to potential phishing and identity theft.Fees on international transfer: Banks and traditional wire transfers might include many hidden charges.Pro tip: To avoid risks, always use a comparison tool and verified platforms before sending the money.What is the Electronic Funds Transfer Act?The Electronic Funds Transfer Act was passed in 1978. It protects the United States’ consumers making EFT transactions. It limits the liability if you quickly report when your card is stolen or lost. It gives you the right to dispute any unauthorized charges. It also requires the banks to show how EFTs work and what your rights are.Understanding your rights is vital, especially if you are transferring a large amount of money overseas or running a business.Compare and Choose SmartElectronic Funds Transfer is here to stay, and they have made moving money globally without physical cash or paper checks easier than ever. But with so many options available today, choosing the right service to transfer money overseas to save time and money can be difficult.Whether you are transferring money to your family, making a business payment, or managing funds internationally, CompareRemit’s exchange rate calculator tools and comparison engine can help you save a lot of time and money, enabling you to make smart decisions.Frequently Asked Questions (FAQs)Q: What is the difference between an EFT and an ACH?An EFT (Electronic Funds Transfer) is a broad term for any electronic movement of money, while an ACH (Automated Clearing House) payment is a specific type of EFT that uses the ACH network. Essentially, all ACH payments are EFTs, but not all EFTs are ACH payments.Q: What is the difference between RTGS and EFT?RTGS (Real-Time Gross Settlement) enables the immediate, individual transfer of high-value funds, while EFT (Electronic Funds Transfer) is a broader term, which can include various methods of electronic transfer with different processing speeds. Q: Is EFT the same as Swift?No, EFT (Electronic Funds Transfer) and SWIFT are not the same. EFT is a broad term for any electronic movement of money, while SWIFT is a messaging network used by financial institutions to send instructions for international money transfers.Q: Is Wise or Remitly an EFT?No, Wise and Remitly are not EFTs themselves—they are money transfer services that use EFT methods (like ACH or wire) to move your money. These platforms often offer faster delivery, currency conversion, and added services for sending money internationally.Q: What is the difference between EFT and ACH?EFT is a broad term for any digital money transfer—ACH, wire, card, or mobile payments. ACH is a type of EFT that uses the ACH network, mainly for U.S.-based direct deposits and bill payments. All ACH transfers are EFTs, but not all EFTs are ACH.

The USD-INR Rate Hits a High for 2024: What This Means for Sending Money to India

The USD to INR exchange rate just hit an all time high for 2024! On August 5, 2024, the USD to INR exchange rate reached an all-time high of 1 USD to 84 INR. This significant rise in the rate marks a milestone for those looking to send money to India, as the exchange rate is now more favorable than ever before. Understanding how this increase impacts your remittance to India is essential, especially if you want to get the best value for your money.The Recent Surge in the USD to INR Exchange RateIn March 2024, we witnessed a jump in the USD to INR rate from 82 INR to 83.5 INR. Since then, the USD to INR rate has been steadily increasing from 83.5 INR to eventually reaching 84 INR in August. This rise has been influenced by various political events that have strengthened the US dollar, increasing demand and pushing the exchange rate higher. As a result, the current rate of 1 USD to INR is at its peak for 2024, presenting an excellent opportunity for those planning to send money to India.On November 1, 2023, we saw a sudden spike in the USD to INR rate going beyond 85 rupees. It only lasted a day, but it was still a great day for those sending money home. What seemed like a marvel then, doesn’t seem too far off now. As the demand for the US dollar increases, we wonder how long it will take for the Google rate to hit 1 US dollar = 85 Indian rupees. How to Get the Best Exchange Rate for USD to INRTo reiterate what we said earlier, with the USD to INR exchange rate reaching new heights, many money transfer companies are offering competitive rates to attract customers. Some companies, particularly those not affiliated with banks, may offer rates higher than the standard 84 INR per dollar. In fact, a USD-INR rate of 1 to 84 rupees, which was highly impressive just a few weeks ago, is quickly becoming the new standard. We may even see some companies offering rates as high as 1 USD to 85 INR in the coming days and weeks.To ensure you get the best exchange rate, it’s essential to compare different money transfer services. CompareRemit allows you to do just that. Whether you choose a bank transfer or an online transfer, our platform helps you compare the top banks and money transfer companies to find the best rates, transfer times, and fees.Why Now Is the Time to Transfer Money to IndiaFor those looking to get the most value when sending money to India, the time to act is now. The USD-INR rate is currently guaranteed at 1 to 84, but there's no telling how long this will last. Rates could continue to rise, making it more expensive to transfer funds.However, it's important to note that exchange rates can also be volatile, with rates sometimes jumping up and then falling back down. This means that those who want to wait and see how companies adjust their rates are playing a game of risk and reward. We may see that this 84 rupee rate is a blip and the rate will fall back down over time or this may also leave an opportunity to get an even better deal down the line.Staying Updated on the Best Exchange RatesFor those who prefer to wait and watch how the exchange rate evolves, CompareRemit offers tools to keep you informed. You can subscribe to our daily newsletter, which provides updates on the best exchange rates for that day. Alternatively, you can use our rate notification system, where you set your desired exchange rate, and we’ll notify you when a company offers that rate. This way, you can immediately take advantage of the best exchange rate the moment it becomes available.CompareRemit: Your Best Tool for Finding the Right Money Transfer ServiceWhether you’re sending money to India from the USA or looking for the best way to transfer funds, CompareRemit is your go-to tool. Our platform allows you to compare exchange rates, transfer fees, and transfer times across top banks and money transfer companies. This comparison helps you find the best service that suits your needs, saving you time and ensuring you get the most value for your money. It only takes minutes to find the best option, making the process of sending money abroad simple and efficient.CompareRemit allows users to subscribe to a daily newsletter which informs users of the best rates that day. For those who have some more time to wait for the best rate, you can subscribe to a rate notification system which allows users to input their desired exchange rate and when a company hits that rate, they will get a notification, allowing them to immediately take advantage of the optimal rate the moment it's live. Conclusion: Act Now to Get the Best USD to INR RateThe recent surge in the USD to INR exchange rate is a significant development for anyone looking to send money to India. With the rate at 1 USD to 84 INR, now is the perfect time to transfer funds and get the most value for your money. By using CompareRemit, you can easily compare rates and find the best money transfer service, ensuring that your remittance is handled efficiently and at the best possible rate.Check back in with us for more news about exchange rates and money transfer companies with competitive rates.