Cost of Living: Where You Live Can Affect How Rich You Feel


Do you find yourself treading water financially even with a relatively healthy household income? Does your friend or relative halfway across the country have a better quality of life on less income? If so, the cost of living might be to blame.

The cost of living refers to the cost of various items necessary in everyday life. It includes things like housing, transportation, food, utilities, health care and taxes.

Single or family of six?
The Economic Policy Institute ( has a family budget calculator that lets you enter your household size (up to two adults and four children) along with your Zip code to see how much you would need to earn to have an “adequate but modest” standard of living in that geographic area.

Factors that influence the cost of living
Housing — When an area is described as having a “high cost of living, it usually means housing costs. Looking to relocate to Silicon Valley from the Midwest? You better hope for a big raise; the mortgage you’re paying now on your modest three-bedroom home might get you a walk-in closet in this technology hub, where prices last spring climbed to a record-high $905,000 in Santa Clara County, $1,194,5000 in San Mateo County, and $690,000 in Alameda County.*

Related to housing affordability is student loan debt. Student debt — both for young adults and those in their 30s, 40s and 50s who either took out their own loans, or co-signed or borrowed on behalf of their children — is increasingly affecting housing choices and living situations. For some borrowers, monthly student loan payments can approximate a second mortgage.

Transportation — Do you have access to reliable public transportation or do you need a car? Younger adults often favor public transportation and supplement with ride-sharing services like Uber, Lyft, and Zipcar. But for others, a car (or two or three), along with the cost of gas and maintenance, is a necessity. How far is your work commute? Do you drive 100 miles round trip each day or do you telecommute? Having to buy a new (or used) car every few years can significantly impact your bottom line.

Utilities — The cost of utilities can vary by location, weather, usage and infrastructure. For example, residents of colder climates might find it more expensive to heat their homes in the winter than residents of warmer climates do cooling their homes in the summer.

Taxes — Your tax bite will vary by state. Seven states have no income tax — Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. In addition, property taxes and sales taxes can vary significantly by state and even by county, and states have different rules for taxing Social Security and pension income.

Miscellaneous — If you have children, other things that can affect your bottom line are the costs of childcare, extracurricular activities, and tuition at your flagship state university.

To move or not to move
Your money will go further in some places than in others. If you’re thinking of moving to a new location, cost-of-living information can make your decision more grounded in financial reality.

The U.S. State Department has compiled a list of online cost-of-living calculators at

*San Jose Mercury News, (May 21, 2015)

 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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