The True Cost Of Living In America

Regular Accidental FIRE readers know that I spend my copious free time scouring the dark corners of the web in search of nifty mapping tools related to money and finances.  Sometimes I find a site worth highlighting.  Today’s post does just that. 

HowMuch.net has issued a slick new interactive cost of living map that attempts to give a more accurate measure of the true cost of living in American census tracts based on your personal situation. 

Here’s their description of why they created it:

There are many cost of living rankings out there, but most of them give cost of living averages for the “average American household.” Here’s the issue – the “average American household” doesn’t exist. Income and expenses vary widely between a single millennial to a household of two parents and three kids. Our cost tool explores the costs and expenses of living in a place based on your own, specific needs. The True Cost of Living tool allows you to add details like household size, income, occupation, and even food preferences.

 

The Map

When you open the site you’ll see this: 

 

*like all interactive maps this site works best on a laptop or desktop and not your phone.

Notice the red box I added above around the “Show More Option” menu.  That’s the magic button that allows you to customize the map to more than just a location and household type.   

When you click that button a new set of options will pop up that allow you to customize the map based on these aspects of your life situation:

• Household type (middle class, freelancer etc)
• Profession or dual professions for married/co-habiting (you can also enter an exact income – this is key!)
• Number of people in household (including ages)
• Food Plan (thrifty, moderate, liberal)
• Rent (based on square footage) 

The Howmuch.net folks automatically add utility costs, childcare costs, healthcare costs, and transportation costs which you’ll see on the right hand side in the white box. 

Once you choose your location and desired (or current) life situation from the options presented, the map codes each census tract from green to red, which correspond to more affordable to less affordable.  They also quantify each census tract with how much additional money you’d need, or how much you’d have left over based on your chosen parameters.

For instance, I would need an additional income of $21,989 a year to live in this exclusive Northwest D.C. neighborhood.

 

Sources

As mentioned the Howmuch.net folks automatically add taxes, utility costs, childcare costs, healthcare costs, and transportation costs in the white box on the right after you choose your options.  I looked into where they’re getting their data for these because that’s the value I add to the world. 

Here’s their sources:

• Income Data – Bureau of Labor Statistics and U.S. Dept. of Labor (if you only choose a profession and don’t specify an income)
• Taxes – National Bureau of Economic Research.
• Rent -Renthub.com
• Food costs – USDA
• Utility costs – U.S. Dept of Labor and BLS Consumer Expenditure Surveys
• Child care costs – Childcareaware.org
• Healthcare costs – BLS Consumer Expenditure Surveys
• Transportation costs – BLS Consumer Expenditure Surveys

Having done lots of research of financial data for mapping purposes myself, I find their sources to be sound.  And they’ve included the big three expenses for most Americans which are housing, transportation, and food.

 

Gripes

I have some gripes with the map.

My main gripe is that they apparently only include data for renting and not owning a house or apartment.  They don’t explain why they did this, but the fact is that 65.8% of Americans own their place of residence as of the fourth quarter of 2020. 

Including home ownership would greatly increase the complexity of the map since factors like property taxes and insurance would come into play.  I assume this is the reason, and since property taxes are very local and diverse in America that aspect alone would be difficult to map.

Another gripe is that they do not explain if their analysis assumes you are living paycheck to paycheck, or if you are saving some money.  Given the common denominator of American financial behavior, I suspect it’s the former. 

But it’d be nice to know if you could live in a certain area while saving 10 or 20% of your income.  If you assume they do not include this then an easy hack would be to take the percentage you wish to save off of your income and check the results.

 

Geoarbitrage

So there you have it financial warriors, a slick cost of living mapping tool that goes way further than others in attempting to show the true cost of living based on location.

I post lots of tools like this that show various aspects of money and finance from a location perspective.  If you’re considering Geoarbitrage in the United States this mapping tool can help you find a place to live with a reasonable cost of living that meets your specific needs. 

Also be sure to check out my Geoarbitrage Resources Page that has tons of great tools to help you find your perfect location.

I hope you find these resources handy and I will continue to expose valuable tools that can help when deciding on a geoarbitrage strategy.