Cost of Living Comparison Calculator (2024)

FAQs

What is the best way to measure the cost of living? ›

To determine the cost of living, economists tally up the prices for a sample of goods and services, like health care, food, and housing. These costs are based on what people actually spend, broken down by location.

Simply add up all of your monthly fixed expenses, like rent or a mortgage payment, and your variable expenses, such as groceries and gas costs. Also factor in occasional but expected purchases, such as new tires. The resulting amount, assuming you aren't going to debt every month, is your cost of living.

Bankrate's cost of living calculator can help you understand the disparities between two metro areas. The information can also be used to help you determine or negotiate the salary you'll need in order to cover your basic needs in a particular city.

West Virginia is the cheapest state to live in the US due to its low cost of living. This affordability is primarily driven by the state's low housing costs and other economic facilities. The median home price in West Virginia is $155,400, and the average rent for a two-bedroom apartment is $930 per month.

The most common way is to use the GDP per capita. This is a measure of the country's economic output divided by its population. Another common method of measurement in standard of living is per capita income. It gives us an idea of how much each person in the country earns on average.

The best measure of the cost of living is the Consumer Price Index (CPI).

"At this point, giving employees a raise to offset inflation may be too little, too late," noted Dalgliesh. "As inflation approaches the Federal Reserve's 2% target, a raise of 3% to 4% starts to look beneficial unless you recognize the compounding effects of inflation over the past two years.

A cost of living increase is not mandated unless required by law or agreement. Additionally, it may not be needed every year. This may be the case during years when inflation remains flat, and the cost of living doesn't change, meaning that employees' pay value is not diminished. Why would an employer give a COLA?

A cost-of-living raise can help you afford increasing expenses due to inflation, but not all employers offer these raises automatically. For years, 2-3% has been the norm, but some employers say they're boosting that to 4%, given the current economic climate.

You can calculate this by using the following formula:Current employee salary x cost of living increase = Cost of living raiseFor the abovementioned employee, the calculation would be as follows: 40,000 x 0.02 = 800This means that the employee would receive an $800 raise and would now make $40,800 annually.

How much should living expenses be of income? ›

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

The first is your cost of living, which is the totality of all of your reasonably-expected expenses, such as rent/mortgage, food, insurance, etc. The second is your total income, including salary, bonus, stocks, etc.

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

Calculating the cost of living

The Consumer Price Index (CPI) is one of the most commonly used indices to track price changes of consumer goods over time.

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.