The cost of living in the United States is constantly growing: in which states is it most difficult to live

At first glance, everything is fine in America. The unemployment rate, 3,7%, is the lowest in decades. Annual wage growth has reached a nine-year high, and the latest data from the Commerce Department shows the US economy continues to grow.

Фото: Depositphotos

But this does not mean that all Americans feel very comfortable financially and do not need anything, writes GO Banking Rates.

In fact, it is becoming increasingly difficult for Americans to provide themselves with the things and services they need to live. Journalists of the publication examined the cost of living throughout the United States to see how it has increased over the past few years. Then they interviewed Americans to find out how much they spend on meeting their immediate needs. Then the average expenditures of respondents in each state were compared with the average income in each region.

Cost of living in the US increased by 14% over the last 3 of the year

The cost of living in America over the past three years has increased by 14%, according to data from the consumer price index of the Bureau of Labor Statistics. The index measures changes in prices for basic goods and services, including food, housing, energy, transport, and medical care.

The median home price rose 21% in three years, from $215 in January 000 to $2015 in January 260, according to real estate sales and rental site Zillow. Average rent increased 000% over the same period, from $2018 to $7,6 per month.

Cities where the average cost of living is above average income

GO Banking Rates used the 50-30-20 budgeting rule (50% of income for essential needs; 30% for discretionary expenses; 20% for savings) to determine the income needed to live in the 50 largest cities in the United States. In all but one city, the income needed to live comfortably is higher than the average income of its residents. In all 50 cities, the gap has increased by at least 20% over the past year, and in the 10 cities shown in the table below, by more than 20%.

Infographics: GO Banking Rates

San Francisco residents need the highest income to cover essentials, non-essential expenses and savings—$123 in 268, up from $2018 in 110. The median income in San Francisco is $357, leaving a gap of $2017 between what city residents actually earn and what they need to live comfortably.

In New York, the gap is even larger at $44, with the state's median income being $476 and the amount needed to live comfortably being $55. Miami has the largest gap among the largest cities at $191.

To find out if Americans can pay living expenses in the states where they live, GOBankingRates asked 5 000 people about their monthly expenses. Respondents were asked to tell how much they spend per month on rental housing, food, transportation, utilities, and health care. The publication then compared the average amount spent on basic necessities with the average household income to determine in which regions Americans do not earn enough for a comfortable life.

States where average incomes do not allow living comfortably

The survey showed that residents of these 13 states spend more than 50 percent of their income on basic necessities:

Infographics: GO Banking Rates

In many of these states, this situation is largely due to low incomes. The median income in all but one of these regions (North Dakota) is lower than the U.S. median income of $59. In seven of the 039 states where residents spend more than 13% of their income on necessities, the average income is less than $50 a year. These regions include Alabama, Arkansas, Kentucky, Mississippi, Louisiana, New Mexico and West Virginia.

In addition to relatively low incomes, some of these states also have relatively high living expenses. The survey showed that the sum of expenditures on the basic needs of respondents in the states of Alabama, Arkansas, Delaware, Florida, Maine, New Mexico and North Carolina, is higher than in half of the US states.

Despite its relatively high average income, North Dakota is among the states where residents spend more than 50% of their income on necessities, due to the region's high cost of living. The average monthly amount needed to live in North Dakota was the second highest of any U.S. state at $2. The only region where average spending on essentials will be higher is Delaware, where you'll spend $091 per month.

13 states in which the ratio of income and expenses is “comfortable”

The table below shows the top states 13 in which residents spend far less than 50% of their monthly income on basic necessities.

Infographics: GO Banking Rates

Average income in about half of these states is higher than the national average. In fact, New Hampshire has the highest median income in the United States at $76 per year, and average spending on essentials in the state is only 260% of income. However, residents of Massachusetts, New York and Wyoming pay a lower percentage of their income to cover basic needs - 33% - this is due to the fact that the cost of living in these states is quite low.

Among these 13 states, New York has the lowest average cost of living, given the cost of essential items. It is followed by Wyoming, Nevada, Iowa, Massachusetts, Montana, South Dakota and Wisconsin.

Rising cost of living leaves Americans without savings

The rising cost of living makes it harder for many Americans to save money. Considering that respondents in a quarter of the states spend on average more than 50% of their income on basic necessities, they have less money left to set aside funds for emergencies or retirement.

How to protect your savings from rising costs

Living in a state where the cost of living is lower and incomes higher can make it easier to find a place in the budget for savings. However, even if you live in a place with a high cost of living, there are steps you can take to improve your financial situation.

Start by analyzing your expenses to determine where you can cut costs and use the freed-up money for investments and savings. You may be able to cut down on your biggest monthly expense—housing—by looking for a cheaper apartment or sharing a place with a friend. Plus, you can always find ways to earn extra money through a variety of side jobs. Some simple options for earning extra money can be found at link.

Read also on ForumDaily:

Places where people with incomes of less than $ 100 thousand per year feel 'rich'

American cities that pay if you move there

Five best US states for the middle class

Why California is the best state to become a millionaire

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