One of the most important decisions you need to make before moving to a new city is how much it will cost to live there. The “cost of living” is the amount of money you need to maintain a certain way of life in a given location.
Because the price of goods and services varies from city to city, calculating the cost of living will determine how affordable it is to live in a certain area. Expenses that factor into the cost of living can include affordability of housing, transportation costs, food prices, and entertainment costs. The cost of living is also related to income, as salary levels in a geographic area are measured against those expenses.
A cost of living index allows you to directly compare the cost of living in one region versus another, helping you understand how far your money can go in each location. For example, the cost of living in San Francisco is double that of Boise, Idaho. Whether you are using a cost of living index or a cost of living calculator, each will help you feel more confident in deciding where to live.
NerdWallet’s cost of living calculator is powered by data from the Council for Community and Economic Research (C2ER). According to the council, “C2ER produces the cost of living index to provide a useful and reasonably accurate measure of cost of living differences between urban areas. The items on which the index is based have been carefully chosen to reflect the different categories of consumer spending.
C2ER was founded in 1961 and continues to exist today as a not-for-profit organization, “comprising research staff from chambers of commerce, economic development organizations and agencies and related organizations across the board. United States “. The C2ER has published its quarterly cost of living index since 1968. It is made up of “nearly 100,000 data points collected mainly by C2ER members located in 400 cities”.