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Understanding the Cost of Living in Your New Location

The cost of living can dramatically vary across the United States. This can make a significant difference in what your salary will actually buy you and how much it will stretch when you move to another state. At GoinGlobal, we help people determine how their salary can make it to their new location, as well as how they can increase the value of their dollar in the state they are relocating to.

Whether you are a professional looking for the next big opportunity or an immigrant who needs to make their money stretch further, understanding how your spending will change is important. A major factor that influences how much you spend is your state’s cost of living index. The index compares the price of a typical set of goods and services from one geographic area to another. It is based on the prices of specific goods and services, like housing, food, utilities, transportation and health care. The index helps you understand how much your salary will need to cover the expenses of living in your new location.

To calculate the cost of living, most indexes start with a base city or region, usually represented by 100. Then, other regions are compared to that base and assigned a number of above or below 100 based on how they rank in comparison. For example, if Boston’s cost of living is 20% higher than Chicago’s, it would be given a 120 on the index.

While there are many factors that influence the cost of living, some of the most influential include housing, food, transportation and health care costs. These are the most basic necessities of life and can have a huge impact on how much your salary will cover.

In addition, the availability of services and the quality of those services will also impact the cost of living. While some services are essential, others may be optional or unnecessary. For instance, the cost of living will not be as high if you live in an area that has a public healthcare system and free or inexpensive college education.

Another factor that impacts the cost of living is inflation. Whether it is due to global instability or rising fuel costs, inflation will affect the amount of money your salary will need to cover basic expenses. This is why it is crucial to monitor inflation rates, and it’s also a good idea to save as much as possible, even if it means you have to sacrifice some of your desired lifestyle amenities.

Understanding how your spending will be impacted when you relocate can make the transition much easier. A simple way to calculate your potential budget is to use a cost of living calculator. These tools are available online and allow you to enter in the details of your current living expenses and the location of the new place you’re considering. This will give you a clear picture of how far your current salary will go in your new location and help you decide if it will be enough to maintain the standard of living you desire.