How expensive is living in America?

America is billed as the land of opportunity, but for the typical person, how much does it actually cost?

For instance, here in the U.K. most wage-earners pay 23% tax, plus 10% National Insurance. On top of that there’s 17.5% VAT (sales tax). So that’s 50% of the salary straight off. There’s a small tax-free allowance and a 10% low rate, but the 23% rate kicks in very quickly. We have the National Health Service which is good for emergencies but poor to dreadful otherwise. I pay about £600 / year for private health insurance. I pay slightly more as Council Tax. The state education system is highly variable, and private education is good but very expensive. House prices are high, especially in the SE and mortgage rates are 6 - 8 percent or so. A £100,000+ mortgage for a small house is common. I will get a derisory state pension at 67.

And I can afford a fiver for the 'Dope.

But in the US, while I read of people on seemingly vast salaries and lowish property prices (absent hotspots), I also read of people paying thousands of dollars in property taxes and healthcare.

So is it a case of swings and roundabouts?

There’s no one answer. Everyone’s situation is different, with big variations depending on location, wages, taxes, medical insurance, child care, transportation, public assistance, rent, mortgage payments, etc.

My income is low but I live in a low-cost area and my house is paid for. So America isn’t expensive for me. I’m stuck here though. I’d never be able to afford living in a city again.

Let me see. I am single, which affects things (it makes them more expensive!) Out of my salary last year, percentages look something like this:

10% went to the national taxes, after getting some special discounts for putting money away for retirement, renting my home, and having a home office
2% or thereabouts went to state taxes
20% went to renting my house
2% paid for my crummy student health insurance for the year
3% went to additional health-related costs, including prescription medication that insurance didn’t cover, dental cleaning, having a bite guard custom made, getting a fancy new pair of glasses (I could have gotten glasses for much less), and having a mole excised (it turned out to be noncancerous, so I had to pay)
8% went into my retirement savings (voluntary, but helps to lower taxes)

Additionally, my state’s sales tax is 6%, so I paid that on top of the retail prices of everything I bought at actual stores. I do a lot of my non-food shopping online, where shipping costs replace or add to sales tax.

So there are answers to your questions about taxes, housing, and insurance. I still bought basically whatever I wanted to buy and put a good bit into savings and a mutual fund. Of course, mitigating factors are that I live alone, so it’s only my own living expenses (but also only my own earnings), that I do not have to make car payments, and that in spite of the excision and a minor chronic condition (hypothyroidism), I am a healthy person who was lucky enough to NOT have a major health problem during the year.

America is a rather diverse collection of states, metropolises, cities, towns and rural areas with rather diverse costs of living with rather diverse range of salaries for rather diverse number of jobs.

I’d suggest starting with what your job pays and where you’d like to do it and narrow in on the feasability of such from there.

Cheers, mate!

I used to live in Oxford (the English one) and now I live Austin in overly sunny Texas. The demographics are reasonably similar (largish college towns with plenty of well paid high tech jobs). I reckon my cost of living is now 30-40% lower, compared to the motherland. YMMV etc.

I always seem to hear Japan and the UK as being the most expensive places on the planet. I don’t hear about the US, so I’d guess it’s just another beige first world country in that regard.

I do know a lot of US tourists complain about Australia being expensive when they come here, which is surprising given the slightly harder currency they’re arriving with, so who knows? Maybe the US is a good deal.

Like others said, it is a huge country and you can do whatever you think is best for you. Want a cheap house? We have them spread out all over the place. Hell, some depopulating towns in North Dakota and other places will practically give you one if you will move there and start a family. You want land? There are gobs of it around for $5000 an acre or much less but it may not have an access road built yet. My home town in Louisiana has some fairly decent houses for $50,000 or so but it wouldn’t be many people’s idea of a good place for an immigrant. You will need a decent car in the U.S. outside of a few tiny areas geographically speaking that are fully served by public transportation. Most places by land area have little or no public transportation at all.

Manhattan, Boston, San Francisco etc. are expensive. I live in the Boston area which my English MIL says is almost as expensive as England if that is any judge. Most of the country by land area is not and you can basically choose whatever you want. The coasts are more crowded although the density of most of the coasts isn’t as crowded as the Uk. Remember that most of the UK could fit into a number of any one of our mid sized states. Taxes should be lower as well especially if you make good money. You can pick a state like Texas that has no income tax if you want. Many states have low property taxes. I have many European friends and aquantinces here and they all seem to think it is a lot cheaper even in Massachusetts which is pretty bad.

Yes, it varies hugely. I live in California, which is expensive, only I live in the Central Valley part, which has always been cheaper, only the housing prices have boomed here now too, so it’s expensive, especially since wages have not gone up along with the pricing. Our city does not have all that many business-type jobs, and many people don’t earn all that much.

I would currently not recommend that you move here if you’re looking for low cost of living, but it’s probably still less than UK costs.

As long as you stay away from the trendy cities, you can live cheaper here. But like dangermom noted, it all depends. I live in California, which is expensive, but in a small town, which isn’t. Suburbia, which is, but old houses around, which aren’t. No public transportation, but my school is all of 10 minutes from home. You’ll have to be more specific about your needs here.

You pay a VAT on your income?

I honestly believe the cost of living here in Silicon Valley is prettty close to worth it. Other places are under-valued, though. I’d move to Portland, OR if I could get a job at Laika.

Another example of the range of things: Back when I was making Good Money and my husband had not yet retired, our income tax bracket was around 30%. It should be lower when we tally it up for 2006. Here in NJ the sales tax just now went up to 7% from 6%; nowhere near the VAT range. But prices, especially for housing, are incredibly high. You cannot touch a decent studio condo in the metro NY/NJ area for under $100,000. A shack or a garage, maybe. An actual free-standing house with a quarter acre of land can run many times that. Real estate taxes here can run well over $5000/year easily on a modest home in an ordinary community. There seems to be no upper limit.

One place I worked, they hired a young man moving here from Texas with his growing family. He accepted a salary that would be quite nice – in Texas. He was shocked when he got here and found that he could barely afford to feed and house his family.

Hah, that happened to us too. DangerDad was making a reasonable salary at his BigCorp job in Silicon Valley at the height of the boom–it was fine–but we used to joke with friends that none of us could never tell our families back home what we were earning. They would all think we were rich, when in fact most of the money went right into paying the rent and we were no better off than before.

The cost of living in Dallas is pretty low, all things considered, but I don’t have a car payment or anything so my perception may be off. And although it is cheaper here, we have to deal with George W. Bush as our president, which is an emotional and mental cost I’d rather not have.

I was puzzled by that arithmetic, too. Taking 17.5% off the supposed remaining 67% would leave you with 55% of salary, not 50%, and not all personal expenditure is subject to VAT, by any means. Maybe we should consider total tax as a proportion of GDP? I believe that the UK is in the low 40 percents and rising, whereas the US is about 30%.

I live in Tennessee. I own a somewhat delapidated 150-year-old farmhouse on 14 acres. I make a very modest $30K per year. I pay about 20% to the federal government, which pays taxes and social security. I don’t have a state income tax, but we have a sales tax of 9.25%. Out of my paycheck comes $60/month for health insurance, which includes dental and vision. The company provides somewhat minimal life insurance, with additional available to me if I want to purchase it. My house payment, including homeowner’s insurance and taxes is $600/mo. - the insurance is more than most because of the farm. My house was purchased for $60,000, which is very inexpensive for this area, particularly with land. It’s financed at 4.25% for 15 years. I own my car and pay for just liability insurance which costs $30/mo.

As far as things to purchase - I get gas for $2.80 a gallon today, no telling what it’ll be next week.
A gallon of milk goes for about $2.25.
100 lbs of the best horsefeed is $16. 100 lbs of average horsefeed is $10.
A loaf of cheap bread can be about 80 cents. A loaf of bakery bread is about $2.50
A dozen eggs is about a dollar.
A 12-pk of 12 oz cokes is usually found on sale for $3.00

That’s all I can think of at the moment. As a single person I can live okay on my income.


My boyfriend and I managed to scrape by last year in California on 21,000 a year. My health insurance was covered by work, he had none, although we might have been able to get some somehow, not sure. We always had decent food to eat, could go out about once or twice a month, lived in our own, albeit small apartment, kept my car going and our bikes together, which out much trouble. Now we didn’t have anything to save, but we got by. My taxation was different than normal, as I was a TA employed by UCD. We hope to make twice that back here in Boston, although our cost of living will be lower: less or no sales tax (we’re 15 minutes from NH and MA only has a 5% tax anyway), we’re sharing a two bedroom with another couple and we’re close enough to mouch off our parents. We’d have a tough time raising a kid or something, but we get by.