The cost of living constantly changes. We first dived into the average cost in 2020, then updated all our numbers in 2022 and again in 2025.
We decided to save the old data from 2020 and 2022 to see how inflation impacts the cost of living over the years.
Here’s the 2022 cost of living. Unfortunately, most of our old sources have updated their content, so they no longer show the costs from 2022. I’ve removed those links.
How Much Did Life Cost in 2022
Billion Photos via Shutterstock.com.
In 2022, the US faced rampant inflation. It stubbornly lingered around 9% for much of the early 2020s.
How Much Does it Cost for the Average Person to Live?
We considered basic living expenses and the extras most people enjoy when calculating the average cost of living in 2022. Basic living expenses include food, shelter, and the things you need to maintain those, while extras include transportation and entertainment.
Basic Living Expenses
You can’t live without food and shelter. They’re the most basic expenses everyone must pay to live. We also included utilities as a basic living expense because they are a big part of having shelter.
How much did basic living expenses cost in 2022?
How Much Did Housing Cost?
Housing is the most significant expense for most people. According to a study by World Population Review, the average American paid $1326 per month in rent in 2022.
That number doesn’t tell the whole story. Those looking to move will see a massive increase, with the average asking rent a whopping $1900.
The outlook is even more dire when you look at the median. According to a Redfin study, median rents surpassed $2000 for the first time in 2022. Keep in mind that these prices are skewed by in-demand cities like Austin, Seattle, and Nashville. Smaller towns will have lower rents.
Choosing to buy a house can be even more expensive. According to Business Insider, the average mortgage cost was $2064 per month for new homes purchased in 2022. To better understand what most Americans are paying, we can look to the median mortgage cost in 2019, which was $1609 per month. Americans lucky enough to purchase a home before the massive price increases may have lower monthly payments.
Buying a home includes additional costs, such as homeowners’ insurance, HOA fees, PMI (primary mortgage insurance), and maintenance costs.
Average Cost of Housing
Since homebuying is out of reach for millions of Americans, we will base the approximate housing cost on average rents. To be fair to Americans staying put with cheaper rents and those looking to move, we will average the price between the two for an average monthly rent of $1613.
Annual Cost: $19356
Annual Cost when first published in 2020: $16860
Total Increase: $2496
The average price of renting soared by over $2000 in the past two years. Many Americans are looking for any way to save money on this enormous cost.
How Much Did Utilities Cost?
If you aren’t lucky enough to score a housing situation with utilities included, those will be the next most important thing on your list. Electricity, gas, sewage, water, and trash pick-up all cost money. Many rentals include some utilities (usually sewer and trash) with the rent, but homeowners are responsible for all of them.
The yearly cost of utilities for the average American is approximately $4194. This figure was derived from data on average utility costs by Balancing Everything and average trash removal costs by Moving.com. The data included average electric, water, sewer, gas, and trash removal costs across the country 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: $4194
Annual Cost in 2020: $3900
Total Increase: $294
How Much Did Insurance Cost?
The final cost under the housing umbrella is insurance. If you own your home, it is a must. 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!
On average, homeowners’ insurance costs about $1899 per year, and the average cost of renters’ insurance is significantly lower at $180 per year.
If we average these two numbers together, we see that Americans are paying approximately $1039 per month to protect their homes. Remember that homeowners pay far more than renters for this essential living expense.
Average Cost: $1039
Annual Cost in 2020: $635
Difference: $404
The difference between 2020 and 2022 is around $400, but it’s important to note that homeowners pay the brunt of this cost. In 2020, renters’ insurance was slightly more expensive than it is now, coming in at $187 per year. If you rented in 2020 and 2022, your insurance costs are likely similar.
How Much Does Food Cost?
Food isn’t cheap. You can do extensive meal planning or live on rice and beans, but the average American doesn’t do that. According to a survey by Supermarket News, Americans spend approximately $611 per month on groceries, which includes personal care items as well as food.
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’ July Consumer Index Report indicates that Americans spent an additional $329 per month on food away from home.
Annual Cost: $11280
Annual Cost in 2020: $8691
Total Difference: $258
What is the Cost of Living?
As you can see, the average cost for living expenses was $35869 in 2022, $5000 more than it was in 2020. That’s just for basic survival!
We all know those aren’t the only things we have to buy. When figuring out how much life costs, we have to determine how much everything else costs, too.
How Much Did Transportation Cost?
Transportation costs are becoming more and more of a necessity. Unless you live within walking distance of your job and a grocery store, you will probably pay for transportation in one way or another.
How Much Did a Car Cost?
To calculate the 2022 cost of living, 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. We are working with generalities and averages.
According to Lending Tree, the average American can paid around $644 per month for a new car and $488 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 $566 per month on auto loans, which is $6792 per year.
Lending Tree’s numbers are 2021 averages. According to Kelly Blue Book, new car prices continue to increase. Consumers who buy in 2022 can expect to pay even more.
Annual Cost: $6792
Annual Cost in 2020: $5670
Total Difference: $1122
How Much Did Gas Cost?
The cost of gas varies widely, not only from state to state but from month to month as well. Gas prices soared in late spring of 2022 but decreased slightly as the year went on. According to the Bureau of Labor Statistics, Americans spent an average of $393 per month on gas in May and $432 per month in June of 2022. Last year, the May average was only $270.
June gas prices in 2022 were the highest on record. In July, prices lowered slightly from an average of $5.02 a gallon to $4.67 per gallon. According to my calculations, Americans spent approximately $401 on gas in July.
It’s not appropriate to use the highest gas has ever been to determine how much gas costs for a year, so instead, I’ve averaged the May and July 2022 costs for a rough estimate of monthly gas costs, which is $416.
Even with taking away the highest month, if we don’t see more relief at the pump soon, we can expect to pay nearly $5000 in gas in 2022.
Annual Cost: $5000
Annual Cost in 2020: $1000
Total Difference: $4000
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 cost is $1553. Some states, like Florida, have much higher overall rates, while others are much cheaper.
It’s important to note that insurance is one of the few areas where the yearly cost decreased from 2022.
Annual Cost: $1553
Annual Cost in 2022: $1621
Total Difference: -$68
Maintenance/Miscellaneous
Everyone with a car knows that problems will arise every year, even if you get the oil changed regularly. Tires get 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 for all vehicles is $100 a month. The cost varies widely depending on how old the car is, how well maintained it is, and the make & model.
Annual Cost: $1200
Annual Cost in 2020: $408
Total Difference: $792
How Much Does 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 Do Cable & Internet Cost
According to a study by Allconnect, the average monthly cable package costs $217.42 per month. Keep in mind that most companies package cable and internet, so the figure estimates what people are paying for both services.
Annual Cost: $2609
Annual Cost in 2020: $1764
Total Difference: $845
Streaming Services
According to a survey by Finance Buzz, the estimated cost of monthly streaming services varies widely. Some Americans claim to pay over $100 monthly for various streaming services.
However, the median falls into the $25-49 monthly range. We will use the average price in that range ($37) to calculate the average annual cost.
Annual cost: $444
Annual Cost in 2020: $348
Total Difference: $96
Miscellaneous Entertainment
According to the Fool, Americans spent approximately $243 per month on entertainment in 2022, for a total of $2916. The Fool’s entertainment category includes pets, toys, hobbies, recreational equipment, and tickets/fees for recreational activities.
The total yearly entertainment cost was lower in 2022 than in 2020. Two likely culprits are inflation, which eats away at entertainment budgets, and the lingering pandemic, which has prevented people from engaging in crowded activities for the past two years.
Annual Cost: $2916
Annual Cost in 2020: $3203
Total Difference: -$287
Life Was Expensive
In 2022, life cost over $56,000 annually, which doesn’t even include taxes, health insurance, life insurance, or child care. The median wage was only $40,800, meaning half of all Americans couldn’t even afford a basic standard of living on their own.
The high cost of living didn’t include much wiggle room for those making the average salary of $61,000. After taxes, there’s nothing left.
Unfortunately, the cost of living hasn’t improved much in 2025. Something has to give.