Life is expensive, but just how expensive is it?
We set out to answer “How much does life cost?” to provide an idea of the average cost of living for most Americans.
The answer is eye-opening. Even the most basic necessities, like food, housing, and utilities, cost thousands of dollars.
Tracking the Average Cost of Living
We first dug into the research back in 2020. Back then, we discovered that life costs about $45,000 annually. We revised the data in 2022 and again in 2025, highlighting the rampant inflation experienced in the early 2020s.
The cost of living jumped to $56,000, then soared to $74,000, meaning it’s almost doubled in five years.
It’s time to revisit the cost of living yet again. Here’s how much life costs in 2026.
How Much Does Life Cost in 2026
Billion Photos via Shutterstock.com.
Okay, I know you want the number first, so here it is.
Life costs $75,888 per year, on average, in 2026.
Please keep reading to see how we crunched the numbers!
2026 Living Costs
Inflation cooled in early 2025, but soared again heading into 2026. The inflation rate now rests around 3.8%, down from its high of nearly 10% in the early 2020s, but still higher than in 2024-2025.
That means life is still getting more expensive. Here’s what that means for the cost of living in 2026.
How Much Does it Cost for the Average Person to Live?
To find out how much life costs, we consider basic living expenses like food and shelter, plus services used by average Americans, like transportation and entertainment.
Keep in mind that all our numbers are averages, and the costs may not apply to everyone.
Basic Living Expenses
We consider food and shelter the most basic living expenses because we need them to live. We also include utilities, as they’re essential to shelter.
How much do basic living expenses cost in 2026?
How Much Does Housing Cost?
Housing is the most significant expense for most people. In 2026, the average American pays $1698 per month in rent.
Keep in mind that these prices are skewed by in-demand cities. People living in smaller towns will likely pay less, while those in high-cost-of-living cities may pay more.
Choosing to buy a house can be even more expensive. According to Biggest Calculator Hub, the average monthly mortgage payment is now $2918 per month, which includes principal, interest, property tax, and insurance.
Of course, this high cost takes into account all the new homes purchases in the past few years. Americans lucky enough to buy before the 2020 boom and subsequent rise in interest rates are paying far less.
The median in 2019 was $1609 per month, and many still have these lower payments.
Average Cost of Housing
To get the best idea of what housing costs are, we will average the cost of rent vs. the cost of buying in 2026, for a total of $2308 per month.
Annual Cost in 2026: $27696
Annual Cost in 2025: $26742
Annual Cost in 2022: $19356
Annual Cost in 2020: $16860
Total Increase since 2020: $10836
The average cost of housing soared by over $10,000 in the first half of the 2020s, especially for those who want to buy. For renters, it only rose by a few hundred dollars.
Note: I think we may have messed up in previous years, including homeowner’s insurance, both here and as an extra cost. We fixed that for this year.
Save Money on Housing
To save money on housing, Nathan Mueller, MBA, Financial Planner, recommends moving into a smaller place or finding a cheaper neighborhood.
Other ways to save include renting a room, getting a roommate, living with family, or even moving to a lower-cost-of-living state.
If house hacking or moving is not in the cards, you can also consider increasing your income with side hustles or asking for a promotion at work.
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 everything.
According to Move.org, Americans pay approximately $401 on average for essential utilities (electricity, water, sewer, gas, and trash removal). The price tag doesn’t include non-essentials like internet, cable, phone, or streaming services.
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 2026: $4812
Annual Cost in 2025: $5310 (CHECK THIS)
Annual Cost in 2022: $4194
Annual Cost in 2020: $3900
Total Difference since 2020: $912
Save Money on Utilities
To save money on utilities, consider raising or lowering the temperature by a degree or two. Keep it at 74 instead of 68 in the summer, or 68 instead of 74 in the winter. Heating and cooling are two of the top energy-sucking budget busters.
In addition, consider running your heavy appliances at night when less power is used, and use cold water cycles for your laundry. Invest in Energy Star appliances and insulated windows to keep your energy in your home.
How Much Does Insurance Cost?
If you own your home, you must have property insurance. However, insurance to protect your personal belongings is also critical if you rent. Some landlords won’t let you rent if you don’t have a policy!
We already included homeowners’ insurance in the monthly mortgage cost estimate, but we kept the two bills separate in previous years’ cost-of-living analysis, so to maintain the historical data (and discuss renters insurance), we’re keeping it here, but not including it in the final calculation of how much life costs.
In 2026, homeowners can expect to pay an average of $2490 per year for homeowners’ insurance (which is actually down from last year).
Renters’ insurance is significantly lower, hovering at around $23 per month.
If we average these two numbers together, we see that Americans pay approximately $1383 per year to protect their homes.
Remember that homeowners are paying far more than renters for this essential living expense.
Average cost in 2026: $1383
Average Cost in 2025: $1898
Average Cost in 2022: $1039
Annual Cost in 2020: $635
Total Difference since 2020: $748
The difference between 2020 and 2026 is over about $750, but the price has come down by a little over $500 since the high of 2025, and that’s good news.
Homeowners pay the brunt of these costs.
Save Money on Insurance
The best way to save money on insurance is to shop around. Many companies offer lower introductory rates for new customers. Others offer great deals if you bundle home and car insurance.
You may consider the whopping difference between homeowners’ insurance and renters’ insurance and decide to switch to renting.
However, viewing the total cost of living is essential before making a drastic move. If you purchased your home before 2020, you are likely paying less overall than you would if you switched to renting in 2026.
How Much Does Food Cost?
Americans continue to feel pain at the grocery store as food prices rise, spending a whopping $1430 per month on groceries (for a household).
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 $393 per month on food away from home.
All in all, that’s $1823 a month.
Annual Cost in 2026: $21876
Annual Cost in 2025: $19488
Annual Cost in 2022: $11280
Annual Cost in 2020: $8691
Total Difference since 2020: $13185
How to Save Money on Food
Prostock-studio via Shutterstock.com.
The difference in food costs from 2020 to 2026 is staggering, and consumers are unlikely to see much relief. To save money on food, consider cutting back on meals out, skipping expensive sugary drinks, and switching to generic products.
Although pre-made foods are convenient, they are more expensive, so if you have time, opt for dried beans and fresh vegetables rather than canned goods or pre-sliced perishables. Buying in bulk may also provide relief if you can afford it. Consider all the ways to save money at the grocery store to reduce your food costs.
What is the Cost of Living?
When we add it all together, we find that the average cost for basic living expenses is $55767 in 2026, nearly $20,000 more than in 2020. That’s just for 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 Does 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 Does 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 be paying for transportation in one way or another.
How Much Does a Car Cost?
To calculate how much life costs, 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 expect to pay around $767 per month for a new car and $537 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 spend $652 per month on auto loans, which is $7824 per year.
Annual Cost in 2026: $7824
Annual Cost in 2025: $7602
Annual Cost in 2022: $6792
Annual Cost in 2020: $5670
Total Difference since 2020: $2154
Save Money on Transportation
Americans spend so much on transportation because they insist on buying expensive cars. A list of the top car models sold shows expensive pickup trucks and SUVs in the top five.
You could save a lot by trading in that costly pickup truck for a cheap sedan.
Americans also love getting new cars. You don’t need to trade in your vehicle every few years. Instead, keep it for as long as you can, so you don’t have to make any car payments.
If you live in a city with public transportation, consider getting rid of the vehicle altogether to save even more money.
How Much Does 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 $328 per month on gas in March and $365 in April. Last year, the April average was about $280.
To get a reasonable estimate of 2026 gas prices, we’ll simply average March and April to get $346 a month.
Annual Cost in 2026: $4152
Annual Cost in 2025: $3360
Annual Cost in 2022: $5000
Annual Cost in 2020: $1000
Total Difference: $3152
How to Save Money on Gas
Though gas is down from its 2022 peak, the war in Iran has caused prices to explode once again.
To save money on this essential expense, consider driving less. Explore rideshare and carpooling options, take public transportation if available, and try to limit your trips to grocery stores.
Saving on gas might be another bonus to trading your gas-guzzling pickup in for a more economical sedan.
How Much Does 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 is $2524. Some states, like Florida, have much higher overall rates, while others are much cheaper.
Annual Cost in 2026: $2524
Annual Cost in 2025: $2068
Annual Cost in 2022: $1553
Annual Cost in 2022: $1621
Total Difference since 2020: $903
How to Save Money on Car Insurance
Insurance rates must rise to keep up with the replacement costs of new vehicles. To lower your rate, consider driving a cheaper car, raising your deductible, or taking a defensive driver’s course.
Many insurance companies also offer discounts if you bundle their products. Shop around and get quotes from various providers to find the best deals.
Maintenance/Miscellaneous
Everyone who has a car knows that problems will arise every year, even if you do 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 Consumer Affairs, the average maintenance cost hovers around $900 per year.
The cost varies widely depending on how old the car is, how well maintained it is, and the make & model.
Annual Cost in 2026: $900
Annual Cost in 2025: $1500
Annual Cost in 2022: $1200
Annual Cost in 2020: $408
Total Difference since 2020: $492
Save Money on Car Maintenance
On average, older cars cost more to maintain than newer cars. However, if you don’t have a car payment, trading in an older car with higher maintenance fees will not likely save you more money.
The best thing to do is to ensure you pay for regularly scheduled maintenance like oil changes, tire rotations, and tune-ups as soon as they are due. These routine repairs can save you a lot of time and heartache.
Sedans are also less expensive to maintain than luxury cars and pickup trucks. Trading in a luxury vehicle for a cheaper, more functional car can save you money on car payments, gas, and maintenance over the vehicle’s life.
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
A lot of folks still bundle cable and internet, but we’ll do our best to find the average prices.
According to AllConnect, consumers can expect to pay about $76 per month on average for access to the internet, while evoca.tv reports that cable costs about $83 per month.
Assuming you have both, that’s about $159 per month, or $1908 per year.
Annual Cost in 2026: $1908
Annual Cost in 2025: $1680
Annual Cost in 2022: $2609
Annual Cost in 2020: $1764
Total Difference since 2020: $144
Save Money on Cable and Internet
The best way to save money is to cut cable altogether, as it’s rarely a better product than streaming services.
Unfortunately, as more and more people turn to streaming, our favorite platforms are getting pricier and lower in quality.
Let’s see how much they cost in 2026.
Streaming Services
According to SubBuddy, Americans pay about $79 per month to subscribe to 4-5 different streaming services.
We’re paying about $953 per year.
Annual Cost in 2026: $953
Annual Cost in 2025: $828
Annual Cost in 2022: $444
Annual Cost in 2020: $348
Total Difference since 2020: $605
Save Money on Streaming
Prostock-studio via Shutterstock.com.
The savings on cable were replaced by spending on streaming, and the costs continue to rise. It’s almost not a better deal anymore.
But part of that is because people have so many streaming services.
You can only watch one thing at a time, so why pay for four? Sign up for Hulu, watch everything you want to watch on the platform, then cancel it and sign up for something different.
This way, you only pay for one streaming service at a time and save a bunch of money.
Miscellaneous Entertainment
The latest consumer expenditure report, published in December, 2025, records average consumer expenditure from 2024. That report claims that people spent about $3600 on entertainment.
Unfortunately, the data is now two years old, and has no information on what “entertainment costs” actually are.
However, I found another website that breaks down entertainment costs into categories. According to Latest Cost, the average American spends about $83 per month on hobbies, and $72 on games, live events, and other miscellaneous “entertainment”). (Note – I excluded streaming and internet costs from my calculations, as they’re recorded elsewhere).
That’s a total of $155 per month for one person, or $1860 per year.
Annual Cost in 2026: $1860
Annual Cost in 2025: $3636
Annual Cost in 2022: $2916
Annual Cost in 2020: $3203
Total Difference since 2020: $-1343
Miscellaneous entertainment costs are down, 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
In 2026, life costs over $75,888 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 is only $61,984, meaning most Americans cannot afford to live by themselves.
Of course, all the costs are averages, and a lot of people can get by on way less, but what’s the point if you can’t maintain a reasonable standard of living? And we wonder why Americans are so angry.
With all the political uncertainty due to tariffs and potential cuts in government services, the cost of living will probably continue to rise in the near term. The situation is already untenable for most Americans – hopefully, things improve before we reach a boiling point.
Really interesting read and blog idea. Well done on the research, too!
Thank you! This one did take a lot of research, thanks for acknowledging it!
Hey Melanie! Thanks so much for this post and all the research you did. Very eye opening to see how expensive everything is! Yikes! It was interesting for me to compare myself to the average and see if I was ahead. We cut cable ourselves and I don’t miss it either. Awesome post!
You’re welcome! It was insane to see all of the averages…stuff really is freaking expensive! I’m glad you enjoyed it!
Wow! This is really detailed and helpful!