Living Expenses are something we face everyday. Every time we pay cash or swipe our credit cards, we are paying for them. We are vitally aware of our expenses, but sometimes we do not know what they really are or how they compare to other families in similar situations.
This website is designed to help you quantify your expenses and compare yours to those in similar living situations.
I started my research on retirement expenses in the process of planning my retirement, and I found that traditional retirement planning requires that we save much more than we will really need. I felt that this information should be shared with others who are in the process of planning their retirement.
The information on this site is based on living conditions in the United States of America. In the USA, the Bureau of Labor Statistics under the Department of Labor is responsible for this data. This data is updated each October for the prior year. The data in this website was updated in October, 2015 with the most current 2014 data.
DEFINITION – Living Expenses
Definitions vary, but for our purposes, here are a couple of definitions:
- The cost of basic necessities as defined by an accepted standard of living.
- The expenses of a family necessary to secure a safe and modest living standard in the community in which it resides.
These expenses can be different depending on geographic location, family size, and age.
- Geographic Location – the cost of living is higher in large metropolitan areas than in rural areas. An example shows that it costs 1.45 times more to live in Boston, MA as it does to live in Cheyenne, WY.
- Family Size – it is logical that expenses increase with each person in the family. The US Department of Agriculture has a calculator to help calculate the cost to raise a child to age 18. It shows that depending on family income in a two parent family a child born in 2013 can cost between $218,680 and $506,610 to raise to the age of 18 years. This does not include a college education.
- Age – Our cost of living changes as we age. As the children grow and leave home, our expenses decrease. When we stop working, our expenses change. When we pay the last payment on our home mortgage, our cost of living REALLY decreases.
For retirement planning, it is interesting that statistically living expenses decrease as a person ages so the assumption that we will need 85% of our pre-retirement income each year to live comfortably is most likely not true unless you are the exception.
To explore this in more detail go to retirement living expenses.