HomeResourcesWhat is the cost of living in ...
June 20th 2023

What is the cost of living in the United States?

This article discusses what to expect from the cost of living in the United States across housing, transportation, food, healthcare, and other expenses.

According to the Consumer Expenditure Report by the Bureau of Labor Statistics, the average American household spends $5,577 per month. While this “average” statistic is a helpful guide, these living expenses can vary greatly between cities, household sizes, and different lifestyles.

In order to develop a realistic budget for your own lifestyle that will help you achieve your financial goals, it’s helpful to get more specific on how much things cost in the United States across different categories and cities.

This guide will provide you with an overview of estimated costs for typical living expenses in 2023, and additional resources to research the cost of living in your specific city.

What is the cost of living in the US?

Cost of living refers to the amount of money needed to cover basic living expenses, such as food, housing, transportation, healthcare, and other miscellaneous expenses. 

These costs can vary quite a bit across different states in the U.S., so different cost of living indexes are created to establish a baseline for comparison. Using an index pegged to the national average, a city with a score above 100 will be more expensive than the national average, while a city with one below 100 will be cheaper.

For instance, according to the popular Cost of Living (COL) Index of BestNet, NYC has a COL index of 168 in 2023, while Indianapolis has a COL index of 84.9. This means that the total cost of living in NYC is nearly twice as high as that in Indianapolis. 

We’ll discuss the average costs in common spending categories, and note where there may be significant differences between various cities in the U.S. You can compare 2023 COL indexes for major U.S. cities here, to scale these averages towards a more realistic estimate of your city.

Let’s dive in.


Housing is typically one of the most significant expenses in the U.S., whether you are renting an apartment or making a monthly payment on a mortgage. 

According to the BLS report, the average monthly housing cost is $1,885.

In major cities like New York, San Francisco, or Los Angeles, housing tends to be more expensive compared to smaller towns or rural areas. While the national average rent in 2023 is approximately $1,700, an average 1-bedroom apartment in New York can be over $4,000, while the average in smaller cities like Charlotte, North Carolina or Columbus, Ohio is closer to $1,000.

Tip: Websites like Rent.com and Apartments.com can provide more detailed information on the latest rental prices in specific cities. Also, check out the “Relocation” tab of our U.S. Arrival Map for additional resources for finding both short and long-term housing.

If you plan to purchase a home, your monthly expenses can vary greatly depending on the value of your home, the size of your mortgage, and the current interest rate. You can browse housing prices using popular listing platforms like Zillow and use a mortgage calculator to calculate your estimated monthly payment.

Other than the cost of renting and paying a mortgage, you should also factor in utilities, furniture, appliances, and housekeeping fees into your total housing costs.


Transportation costs include expenses related to owning a car, using public transportation, or using other transportation options like cabs and ride-sharing apps. 

According to the BLS report, the average total monthly transportation cost is $913.

Owning a vehicle may involve expenses like car payments, insurance, fuel, and vehicle maintenance. Be careful, because this number may increase due to rising fuel prices, higher interest rates on car loans, and other price increases caused by inflation.

Tip: Public transportation systems such as buses, trains, and subways are another way of getting around in dense urban areas. In cities like New York or Chicago, for example, a monthly public transportation pass can cost between $75 and $120. Websites like Citymapper and Google Maps can help estimate transportation costs in your chosen city.

Also read: How to pre-qualify for an auto loan as a newcomer


Food expenses can vary depending on personal choices and dining habits. If you primarily cook at home, you will save more money than eating most of your meals out at restaurants.

According to the BLS report, the average total monthly food costs are $619.

This includes an estimated $438 for groceries each month, and $253 for eating out – although these numbers may be significantly higher in larger cities.

Tip: Using a rewards credit card could be a powerful way to earn rewards like cash back when making frequent grocery or dining purchases. We outline some of the best rewards credit cards for grocery shopping and dining out, which recent immigrants to the U.S. can apply for cards using their foreign credit history.


Understanding healthcare costs is crucial when moving to the United States, since the system works differently than many countries around the world. Healthcare expenses can include health insurance premiums, co-pays, deductibles, and out-of-pocket costs for medical services. 

According to the BLS report, the average total monthly healthcare costs are $454.

Many employers will offer a health insurance plan as a benefit to their employees at little to no cost. People who do not get health insurance through their employer are eligible for one of many Affordable Care Act plans available through Healthcare.gov, which currently cost an average of $438 per month.

Also read: Health Insurance and Healthcare in the United States Explained 

Miscellaneous expenses:

There are several other discretionary spending categories to think about, based on your specific lifestyle. 

American households spend an average of $297 on entertainment, from movie tickets and streaming services to concerts, electronic equipment, and more.

You can also expect to spend an average of $146 on apparel and services. These costs are often more consistent across cities, given the rise of e-commerce and nationwide retail brands.

When creating a budget, ask yourself what your needs will be for travel, shopping, and other discretionary spending. Understand where you might be able to cut back or optimize the timing of your spending - for example, taking advantage of online sales or booking flights well in advance.

The takeaway

Understanding the cost of living in the United States is critical for a smooth transition. 

This guide provided estimates of costs in main expense categories and resources to research the cost of living in your chosen city. Remember that these estimates are averages, and actual costs will differ greatly based on factors such as location, lifestyle, and personal choices. 

In several of these spending categories, having a good credit history in the United States will help you save money. For instance, with a good credit score you could pay a much lower security deposit on a rental apartment or qualify for a premium rewards credit card that may lower your discretionary spending through cash back on common purchases 

Fortunately, Nova Credit lets you use your foreign credit history from certain countries to apply for several essential products and services from our partners. 

This means that you can apply for great credit cards, phone plans, and more by using your hard-earned credit history from back home—rather than needing to start from scratch. If you are approved for these products and manage them responsibly, you will start to quickly build a U.S. credit history.

Currently, Nova Credit serves individuals coming from Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, the Philippines, South Korea, Spain, Switzerland, and the U.K.

Use your foreign credit history to start your U.S credit history

New to the U.S.? Check if you can use your country's credit history in the U.S. to apply for credit cards and start your U.S credit history using Nova Credit.

More from Nova Credit:

The best credit cards for no credit history

How to get a credit card without a social security number

The best secured credit cards in 2020

The best American Express credit cards in 2020

How to use credit cards to build credit history

How to build credit in the US

How to get a social security card

How to get an apartment with no credit history

No credit check cell phone plans

Announcing the Cash Flow Underwriting Summit: a first-of-its-kind executive summit dedicated to exploring and advancing the practice of cash flow underwriting in consumer lending.