One of the most important decisions you need to make before moving to a new city or town is how much it costs to live there. “Cost of Living” is the amount of money you need to maintain a particular lifestyle in a particular location.
Because the prices of goods and services vary from city to city, calculating the cost of living determines how affordable it is to live in a given area. The expenses that are included in the cost of living can include affordability of housing, transportation costs, food prices, and maintenance costs. The cost of living is also linked to income, as the wage level in a geographic area is measured by these expenses.
A cost of living index allows you to directly compare the cost of living in one area with another and helps you understand how far your money can go in each location. For example, the cost of living in San Francisco is twice that of Boise, Idaho. Whether you use a cost of living index or a cost of living calculator, each will help you decide where to live, to be safer.
NerdWallet’s cost of living calculator is based on data from the Council for Community and Economic Research (C2ER). According to the council, “C2ER compiles the cost of living index to provide a useful and reasonably accurate measure of the differences in the cost of living between urban areas. The elements on which the index is based have been carefully selected to reflect the different categories of consumer spending. “
Founded in 1961, C2ER continues to operate as a not-for-profit organization that “includes research staff from chambers of commerce, business development organizations and agencies, and related organizations across the United States.” C2ER has published its cost of living index on a quarterly basis since 1968. It consists of “almost 100,000 data points, mainly collected by C2ER members in 400 cities”.