Relocating to the United States is an exciting prospect for many people, but it can also be a daunting one. The cost of living in the US is significantly higher than in many other countries, and it is important to consider the cost of living before moving.
The cost of living varies widely between states and cities
The US is a huge country of continental size and a population of more than 334 million people (Census Dec 2022 estimate). So naturally, the cost of living differs a lot between states and cities. Generally, cities on the East and West Coasts are more expensive than those in the Midwest or South.
The Council for Community and Economic Research (C2ER)’s Cost of Living Index, published since 1968, has been the most consistent source of city-to-city cost comparisons available. Here are the top 10 most and least expensive urban areas in Q3 2022.
New York (Manhattan) is more than twice the national average. San Francisco is 1.8 times.
If you want to see a more detailed comparison, you can use their tool here but there is a cost to it.
Housing is often one of the biggest expenses for expats in the US
The average cost of rent in the US varies significantly depending on the location. For example, the average rent for a one-bedroom apartment in Manhattan in Dec 2022 was about $4000, while the average rent in Indianapolis is less than $1,000. So it’s important to research the cost of housing in the specific city or region you plan to live in and compare it to the cost of housing in your home country.
The cost of owning and maintaining a car in the US
While public transportation is available in some cities, many Americans rely on their own vehicles for daily transportation. The cost of owning a car in the US can include the purchase price, insurance, gas, and maintenance expenses. The average new car sold in Nov 2022 cost more than $48,000. This is a new record due to various reasons. The average used car price remains elevated too, due to the pandemic so too bad for car buyers 😐
The cost of healthcare in the US
The US has a complex healthcare system, and as an expat, you’ll need to secure medical insurance to cover your medical expenses. The cost of medical insurance in the US can vary depending on your age, location, and level of coverage. For example, a family of three in San Francisco may pay $500+ per month for a high-deductible plan sponsored by the employer. It’s important to compare the cost of healthcare in the US to the cost in your home country and factor this into your budget.
Food and groceries
Given that inflation in the US is at (or near) the 40-year record, food and groceries are very expensive. For example, the average cost of a dozen eggs was about $3.6 by the end of 2022, while the average cost of a gallon of milk was $4.4. Dining out can also be a significant expense, with the average cost of a meal at a mid-range restaurant in the US ranging from $20 to $50 per person.
Entertainment and leisure activities
can also add to your expenses as an expat in the US. The cost of events such as movie tickets, concerts, and sports games can vary depending on the location and the popularity of the event. For example, a movie ticket in San Mateo may cost $20, while a ticket to a concert in New York City may cost $100 or more. Membership fees at gyms or recreational facilities can also add to your expenses, with the average monthly cost ranging from $30 to $100 or more. It’s important to consider the cost of entertainment and leisure activities in the US and how it compares to the cost in your home country when budgeting for your relocation.
Cost of education
If you have children, the cost of education may also be a factor to consider when relocating to the US. The cost of tuition at universities in the US can vary significantly depending on the institution and the location. For example, tuition at a public university in California may cost $30,000 per year, while tuition at a private university in New York may cost $50,000 or more per year. The cost of private school tuition for elementary or high school students can also be expensive, with the average annual cost ranging from $10,000 to $30,000 or more.
Taxes in the US
In addition to these expenses, you’ll also need to consider the cost of taxes in the US. The US has a complex tax system, and as an expat, you may be required to pay federal, state, and local taxes on your income and certain purchases. For example,
- For federal income tax: for the tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).
- State income tax differs greatly between states. For example, Nevada has zero state income tax, while California has the highest marginal rate of close to 13%.
In conclusion, the cost of living in the US can vary significantly depending on the location and lifestyle you choose. As an expat, it’s important to consider these costs when preparing for your relocation and budget accordingly. Researching the cost of housing, transportation, healthcare, food and groceries, entertainment and leisure, education, and taxes in the US and comparing it to the cost in your home country can help you make informed decisions about your relocation and manage your expenses.
Good luck! Chandler
P.S: I recently created a group on Facebook called Asian Expats in the US so that we can share/discuss more tips directly. Feel free to join.