When you compare cities with cost of living estimates, it’s shocking to see how expensive some places are to live. You may change your plans for relocation based on those figures. The estimates are based on certain factors that affect the costs of living for different cities.
The average salary of city residents impacts the price of rent and other costs of living. For example, residents who live in Anchorage, Alaska pay triple the rent on average, compared to those who live in Appomattox, Virginia. The reason being is Anchorage residents earn much more money per year than Appomattox residents, and therefore landlords are able to charge more. When you compare cities using cost of living estimates, compare the average salary to what you will be paid. If you fall below that, you’ll have to make plans to spend a lot less money, or make more money. Otherwise, you might consider another city or town altogether.
2. Cost of Goods
The price of goods in the city, and how much consumers are willing to pay, affects cost of living estimates as well. The Consumer Price Indexes (CPI) program of the United States Bureau of Labor Statistics tracks that information online. In cities where the CPI is high, the cost of living is high as well. In basic terms, that means you’ll have to pay more for groceries, cleaning and other supplies for your apartment, and a number of other goods and services.
3. Cost of Services
The CPI program also measures the costs of services, and the same correlation applies. The higher the costs of services, more you can expect to pay to live in that city. When you compare cities by cost of living estimates, the calculator or statistics you use include the cost of services as a basis for arriving at that figure. For example, if people in city “A” are paying more for electric services, your electric bill will much higher there, than in city “B” where people pay less. It takes a lot of time and calling around to find out all the information, but you should make a list of all the utilities and other services you need on a monthly basis and get an amount you can expect to pay. If the budget for living in a particular city is too high based on needed services, then you may have to move on.
Across the country, some renters are leaving cities due to high taxes. Even though you don’t own your apartment, you’re paying property taxes because the landlord includes it in your rent. There are also sales taxes, and some cities are located in states where there is no sales tax. Of course, there’s the state income tax, and again not all states have one. City taxes are also wide ranging, and some cities charge much less in taxes, often disguised as fees, than others. Taxes play a vital role in living costs. When you compare cities using cost of living estimates, taxes have to be a factor. A city with lower taxes often costs less to live in.
Knowing how to compare cities with cost of living estimates, and these 4 factors that affect the estimates, will arm you with the information you need to make the right move.