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Cost Of Living Comparison Calculator

Written by Mia Taylor | Edited by Troy Segal

The cost of living is the total amount of money required to live in a certain area and cover your basic necessities. 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. Expenses can vary dramatically from place to place, especially as inflation continues to impact the economy and housing market. 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.

Data source:  ACCRA

Necessary vs discretionary spending

Necessary spending is the money used to cover basic or essential needs, such as housing and food. Necessary expenses are living costs that cannot be avoided. The term discretionary spending, on the other hand, is used to describe non-essential costs. These might include recreation, entertainment or other items consumers purchase when they have money leftover after necessary expenses are covered. Discretionary spending could also include luxury goods and travel. Discretionary spending is influenced not only by how much disposable income one has remaining after paying for essential expenses, but also by the overall economic climate. People generally feel more comfortable spending on non-essential items when broader economic conditions are positive.

Cost of living index

A cost of living index is a city-to-city comparison of the cost of living in each place, based on a variety of consumer expenses and spending categories. Typically, the index is based on expenses such as food, housing, utilities, transportation, health care and other goods. For most cost of living indexes, the number 100 is used to represent the national average cost of living. Each city or region is given a number that’s either above or below 100, which is a barometer that consumers can use to gauge how the cost of living in a particular city relates to the national average. There are various cost of living indexes available online including:

In addition, the U.S. Bureau of Labor Statistics publishes the widely referenced Consumer Price Index, or CPI. This index measures changes in prices for goods and services purchased by urban households. It also includes such consumer expenses as water and sewer service fees and sales and excise taxes. The CPI does not, however, include costs associated with income taxes or money consumers spend on investments like stocks, bonds or life insurance.

What’s included

Cost of living calculations are based on various key necessities and expenses. These include:


Housing is considered a necessity, an essential cost of living that cannot be avoided. This expense may be a mortgage or rent, and it is typically the single biggest expense for consumers. The 2021 Consumer Expenditure Survey published by the Bureau of Labor Statistics found that housing expenses accounted for 26 percent of average budgets, or about $22,624 annually. Depending on income level, some consumers spend significantly more than that.


Similar to housing, food is a basic need. It is the third-largest expense category for consumers, behind housing and transportation respectively. In 2021, American households spent an average of $8,289 on food, or 10 percent of their budget, according to the Consumer Expenditure Survey. But depending on their income, American consumers may spend anywhere from 10.9 percent to 15.8 percent of their annual income on this category.


Lifestyle plays a significant role in cost of living expenses and includes the cost of items above and beyond necessities such as food and housing. This category of expenses could include clothing, entertainment and personal care such as haircuts and more.

Additional costs to consider

Housing, food and lifestyle expenses are merely the tip of the iceberg when it comes to the true cost of living. Health care, childcare, education, transportation and utilities are additional necessities that combine to create the overall cost of living for the average individual or family. Transportation costs are often the second-largest cost for most people. Consumers spend about 13 percent of their annual budget on this necessity, which amounts to about $10,961, according to the Consumer Expenditure Survey. Health care is also one of the most significant expenses consumers face, eating up about 8 percent of a consumer’s annual budget, or about $5,452. Education costs meanwhile amount to about  $1,226 annually.

Economic and other factors to consider

Aside from your personal expenses and lifestyle habits, you’ll also need to be mindful of macroeconomic items that aren’t within your control – such as inflation, interest rate hikes, and mortgage rate fluctuations. While it’s impossible to predict these types of changes, it’s smart to have a plan in place to minimize their impact on your finances. Sometimes, these factors will be managed on your behalf. If you’re a Social Security recipient, for example, your benefit will be updated for inflation as needed, thanks to the annual cost-of-living adjustment (COLA).

Also, remember that some of the outputs on the cost of living calculator – like medical visits – are for a single person, so you’ll need to adjust the calculations if you’re married or have children. You may also need to scale up the food costs, depending on the size of your household.

If you’d like some help narrowing down cities to compare, check out Bankrate’s Best Places to Live series. We’ve broken down the top cities in several states, ranked by such factors as affordability, job prospects and safety. 

How to use this data

Cost of living information can be helpful to make comparisons between two or more cities and determine how much money would be required to make ends meet. This information is important when job searching or when considering relocating or purchasing a home in a new part of the country, or even the world. The information provided by a cost of living index can help you get a realistic snapshot of living expenses and create a budget. This information can also help you determine whether or not you can afford to live in a particular location at all.

Comparing states

To give you an idea of how living expenses vary by state, let’s compare the cost of living differences in the country’s three most-populated states: California, Texas and Florida. 

According to data from RentCafe, the cost of living in California is 41 percent higher than the national average – but this is highly dependent on where you live within The Golden State. For example, if you live in Bakersfield, your cost of living is 4 percent higher than the national average, but if you live in San Francisco, it’s 91 percent higher.

Compare that to the cost of living in Texas, which is 8 percent lower than the national average, even though pricier cities like Plano have a cost of living that’s above the national average. 

Similarly, Florida’s cost of living is just 1 percent lower than the country as a whole, according to RentCafe. But like Texas, living in the Sunshine State’s most cosmopolitan cities (like Miami) will put your cost of living above the national average.

Or take important individual items like groceries and health care. According to MIT’s living wage calculator, food costs in Florida and Texas run $3,351 per year for a single adult. In California, they run almost to $4,000 annually. On the other hand, medical costs are lower in The Golden State: $2,288 per year for that same single adult, vs $2,871 in Florida and $2,549 in Texas.

Overall, MIT estimates, to have a basic living wage, your pre-tax earnings would need to be  $45,382 in California; $35,858 in Florida; and $34,127 in Texas.


Additional reporting by Taylor Freitas