What Are the Costs of Living for the Average American?

By information.com — Published September 19, 2017

What Are the Costs of Living for the Average American?

Cost of living is the money a household needs to sustain an average level of living. The basic expenses taken into account for determining living costs include food, housing, healthcare and taxes. They differ from one geographical area to another, and are used to determine the salary and minimum wage of a state. For instance, the cost of living in a state with a minimum wage exceeding $8 is higher than the nationwide cost of living.

Living expenses to factor in


Expect rent or mortgage payments to make up a large chunk of your monthly expenses. Breaking it down further, a homeowner's housing costs will include principal and interest payments, property taxes, hazard insurance premiums and homeowner's association fees.


The cost of utilities will depend on the amount of electricity, gas and water your household consumes. The average price of electricity is between $50 and $100 per month, subject to variations depending on the size of your home and energy-efficient appliances used.

Your annual energy bill will depend on the time you spend cooking on your stove. Gas is more efficient than electric. According to electric company MGE, the average cost of running a gas range without a pilot light is $2.34/month while an electric range costs $5.94 per month.

Internet costs average $50/month, while monthly cellular service with a data plan costs about the same.

The cost of water, sewer and garbage depends on the Homeowner's Association and type of house (single-family, condominium or other); if you're a renter, the cost will be included in your monthly rent and arranged for by your landlord.


According to statistics from the U.S Bureau of Labor Statistics, the average American household spent approximately 10% of its total budget on food. The average food cost for a household is $6,602. Wish to know how to save on grocery expenses? Flexible meal planning and couponing can help you lower your monthly out-of-pocket grocery costs.


Nearly 90% of American households report spending an average of $3,000/year on gasoline. Besides the $250 average cost of gas, you will also need to calculate your car's scheduled maintenance costs, tolls and parking fees.


The average annual healthcare costs per person is $10,345 per individual, and changes to the healthcare bill will have a significant impact on the extent to which Americans will be able to access and afford healthcare.


Discretionary spending on clothes, restaurants, movie theaters, live sports and books has increased over the years. The average cost of entertainment hovers around $2,500/year. Actively seeking out bargains and booking when prices are low can go a long way in helping you save on the cost of living.

The most expensive states to live in include Rhode Island, Connecticut, California, New York and Massachusetts. Among the least expensive states are Mississippi, Indiana, Michigan, Arkansas and Oklahoma.

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