The cost of living constantly changes. We first dived into the average cost in 2020, then updated all our numbers in 2022, 2025, and again in 2026 for the current cost of living.
We decided to save all the old data to see how inflation impacts the cost of living over the years.
Here’s the 2025 cost of living. Unfortunately, some of our old sources have updated their content, so they no longer show the true cost of living in 2025. I’ve removed the links but kept the name of the original source for posterity.
Tracking the Rising Cost of Living
Back in 2020, we discovered that life costs about $45,000 annually. We revised the data in 2022, and with the rampant inflation experienced in the early 2020s, the cost of living soared to nearly $56,000 in those two years.
It got even more expensive in 2025. Last year, we found that it cost Americans an average of $74,000 to live. Here’s the data.
How Much Did Life Cost in 2025
Inflation cooled in recent years, but prices continue to rise. The inflation rate now rests around 2.1%, down from its high of nearly 10% in the early 2020s.
That means life is still getting more expensive, but at a slower rate. So what does that mean for the cost of living in 2025?
Average Cost of Living in 2025
To find out how much life costs, we will consider basic living expenses like food and shelter, in addition to services used by average Americans, like transportation and entertainment.
Keep in mind that all our numbers are averages, and not all costs will apply to all people.
Basic Living Expenses
Food and shelter comprise the basic living expenses because we need them to live. We also include utilities, as they’re essential to shelter.
Here’s the average cost in 2025.
How Much Did Housing Cost?
In 2025, the average American paid $1650 per month in rent.
Keep in mind that these prices are skewed by in-demand cities. Smaller towns will have lower rents.
Choosing to buy a house can be even more expensive. According to Redfin, the average monthly mortgage payment hit an all-time high of $2807 in the spring of 2025. Of course, this high cost is for new homes. Americans lucky enough to buy before the 2020 boom and subsequent rise in interest rates pay far less. The median in 2019 was $1609 per month, and many still have these lower payments.
Keep in mind that buying a home includes additional costs, such as homeowners’ insurance, HOA fees, PMI (primary mortgage insurance), and maintenance costs.
Average Cost of Housing
To get the best idea of what housing costs, we will average the cost of rent vs. the cost of buying in 2025, for a total of $2228 per month.
Annual Cost in 2025: $26742
Annual Cost in 2022: $19356
Annual Cost in 2020: $16860
Total Increase since 2020: $9882
The average cost of housing soared by nearly $10,000 from 2022-2025, especially for those who want to buy. For renters, it only rose by a few hundred dollars.
How Much Do Utilities Cost?
Shelter is just one part of the housing story. We also need electricity, gas, sewage, water, and trash pick-up. Many rentals include some utilities (usually sewer and trash) with the rent, but homeowners are responsible for all of them.
According to Home Guide, Americans paid between $275 and $610 a month for utilities in 2025.
The data includes average electric, water, sewer, gas, and trash removal, but excludes cable, internet, and phone services, as those are not necessities.
Remember that not everyone pays all of these costs, and prices vary widely by state. Electrical charges for those running central air in the Southwest will be far higher than those using window breezes in the Northeast. Gas and Oil for heating will be far more expensive in Northern regions than in Southern areas.
The costs listed are averages across the entirety of the US.
Annual Cost in 2025: $5310
Annual Cost in 2022: $4194
Annual Cost in 2020: $3900
Total Increase: $1410
How Much Did Insurance Cost?
If you own your home, you must have property insurance. However, insurance to protect your personal belongings is also critical if you are a renter. Some landlords won’t let you rent if you don’t have a policy!
Due to increases in fires, hurricanes, and other natural disasters, plus soaring home costs, homeowners’ insurance rates have soared in recent years. On average, homeowners paid about $3520 to protect their homes in 2025.
Renters’ insurance is significantly lower, hovering at around $276 per year.
If we average these two numbers together, we see that Americans paid approximately $1898 to protect their homes.
Remember that homeowners are paying far more than renters for this essential living expense.
Average Cost in 2025: $1898
Average Cost in 2022: $1039
Annual Cost in 2020: $635
Difference: $1263
The difference between 2020 and 2025 is over $1200, but it’s important to note that homeowners pay the brunt of this cost. Renters only pay about $100 more.
Note: I may have mistakenly included insurance payments in the house payments in the 2025 data, I have fixed this problem for the current year’s data.
How Much Does Food Cost?
Americans continued to feel pain at the grocery store as food prices rose, spending a whopping $1246 per month on groceries (for a household). The number includes food and other essentials like personal care items and household supplies.
Everyone doesn’t always eat at home all the time, so it’s vital to include meals out as part of the yearly overall food costs. The US Bureau of Labor Statistics’ Consumer Index Report indicates that Americans spent an additional $378 per month on food away from home.
Annual Cost in 2025: $19488
Annual Cost in 2022: $11280
Annual Cost in 2020: $8691
Total Difference: $10797
What Was the Cost of Living in 2025?
When we add it all together, we find that the average cost of living expenses in 2025 was $53,438, nearly $20,000 more than in 2020. That’s just for basic survival!
We all know those aren’t the only things we have to buy. When we add in these extras, life gets even more expensive.
How Much Did the Rest of Life Cost?
The average American also has a car, internet, cable, and likes to have fun now and then. They also have to pay for miscellaneous items and maintenance for their cars or homes (or themselves) over the year.
Determining how much these extras cost will give us a better idea of how much life really costs.
How Much Did a Car Cost?
I’m going to assume that the average American has a car. I know that many people rely on public transportation, and those costs are generally lower, but I’m not doing a scientific study here.
According to Lending Tree, the average American paid around $742 per month for a new car and $525 per month for a used car. I couldn’t find any data on the combined average, so I’m just going to average those two numbers and assume that the average price overall is the average of those two. That means that, on average, Americans spent $633 per month on auto loans, which is $7602 per year.
Annual Cost in 2025: $7602
Annual Cost in 2022: $6792
Annual Cost in 2020: $5670
Total Difference: $1932
How Much Did Gas Cost?
The cost of gas varies widely, not only from state to state but from month to month as well. According to the Bureau of Labor Statistics, Americans spent an average of $276 per month on gas in March and $284 in April. Last year, the April average was over $300.
To get a reasonable estimate of 2025 gas prices, we averaged March and April to get $280 a month.
Annual Cost in 2025: $3360
Annual Cost in 2022: $5000
Annual Cost in 2020: $1000
Total Difference: $2360
How Much Did Car Insurance Cost?
The cost of car insurance also varies widely by state (and by driving record, age, etc.). However, according to a study by US News, the average annual cost in 2025 was $2068. Some states, like Florida, have much higher overall rates, while others are much cheaper.
Annual Cost in 2025: $2068
Annual Cost in 2022: $1553
Annual Cost in 2022: $1621
Total Difference: $447
Maintenance/Miscellaneous
Everyone who has a car knows that problems will arise every year, even if you do get the oil changed regularly. Tires go flat, brake lights go out, and interiors get dirty. And it will always need a significant repair or tune-up at the most inconvenient time.
According to Car Insurance, the average monthly maintenance cost hovered between $100 and $150 a month, for an average of $125.
The cost varies widely depending on how old the car is, how well maintained it is, and the make & model.
Annual Cost in 2025: $1500
Annual Cost in 2022: $1200
Annual Cost in 2020: $408
Total Difference: $1092
How Much Did Entertainment Cost?
The last significant cost of life is entertainment. Most Americans spend at least a little money doing something fun, whether it be cable, internet, or going out and doing things.
I include this because I don’t think life is worthwhile if you aren’t enjoying it at least a little bit, and unfortunately, most ways to enjoy life cost money.
How Much Did Cable & Internet Cost
A lot of companies bundle cable and internet, so we’re exploring the joint cost. According to Home Guide, the costs can range from $85 to $195 per month for both utilities, for an average of $140.
Annual Cost in 2025: $1680
Annual Cost in 2022: $2609
Annual Cost in 2020: $1764
Total Difference: -$84
Streaming Services
As more companies enter the streaming landscape, Americans pay more and more for the service to get the content they love.
According to Deloitte, Americans subscribed to an average of four streaming services and paid approximately $69 per month combined.
Annual Cost in 2025: $828
Annual Cost in 2022: $444
Annual Cost in 2020: $348
Total Difference: $480
Miscellaneous Entertainment
According to the Fool, Americans spend approximately $303 per month on entertainment, for a total of $3636 per year. The Fool’s entertainment category includes pets, toys, hobbies, recreational equipment, and tickets/fees for recreational activities.
Annual Cost in 2025: $3636
Annual Cost in 2022: $2916
Annual Cost in 2020: $3203
Total Difference: $433
Miscellaneous entertainment costs rose less than most of the other costs, but it’s easy to see why. As Americans tighten their belts to pay for higher housing and grocery costs, they can’t afford to have as much fun.
Life Is Expensive
The average cost of living in 2025 was $74,000 annually, which doesn’t even include taxes, health insurance, life insurance, or childcare.
Average salaries, which haven’t kept up with inflation, don’t cut it. The average salary was only $61,000, meaning most Americans cannot afford life by themselves. Unfortunately, the situation has gotten even worse for 2026. Eventually, something will have to give.