Cost of Living in The US for a Family: What To Expect?

Many people want to move to the US with the dream of having a better life with their families. However, regardless of how good you think the US is, one thing you should highly consider before moving here is the cost of living. 

The cost of living in the United States for a family varies per state. A family of four needs $7,095 per month or $85,139 annually. Meanwhile, a couple’s living cost averages $5,572 monthly or $66,861 yearly. Then, having one child will raise it to $6,178, or $74,134 annually.

If you want to know more about the factors likely to affect the cost of living the American dream, you’ve come to the right place. This article will elaborate on the specific expenses your family will have to spend while you’re in the United States. 

Average monthly expenses for a family living in the US

The Consumer Expenditure Survey conducted by the US Bureau of Labor Statistics (BLS) in September 2020 provides the average monthly expenses reported here.

Further, it would be helpful to note that when we talk about family, it doesn’t necessarily mean two parents and two children when we talk about family. A household can also have extended family members, such as grandparents and other unrelated people. 

The table below shows the average monthly expenses for each family size according to the Bureau of Labor Statistics.

Family sizeMonthly expensesYearly expenses
Single person$3,189$38,266
Family of two$5,572$66,861
Family of three$6,187$74,134
Family of four$7,095$85,139
Family of five$6,780$81,361

Looking at the table, you might be amazed and confused to see that a family of five has lower monthly expenses compared to a family of four. But, according to the Bureau of Labor Statistics, the explanation roots in the nature of the statistical estimates. 

Moreover, when you average all monthly expenses values from the different family sizes, we will get $5,253 monthly or $63,036 annually. But the question is, where do families spend this money on?

Typical expenses include major expenses like mortgage payments and groceries to minor expenses like clothing. Let’s further elaborate on these expenses. 

Here is a breakdown of what families in the United States usually spend according to the Bureau of Labor Statistics: 

ItemMonthly costAnnual cost% of spending
Housing$1,784$21,40934.9%
Transportation$819$9,82616.0%
Personal insurance and pensions$604$7,24611.8%
Healthcare$431$5,1778.4%
Groceries$412$4,9428.1%
Entertainment$243$2,9124.7%
Restaurants and other meals away from home$198$2,3753.9%
Cash contributions$190$2,2833.7%
Apparel and services$120$1,4342.3%
Education$106$1,2712.1%
Miscellaneous$76$9071.5%
Personal care$54$6461.1%
Alcoholic beverages$40$4780.8%
Tobacco/smoking products$26$3150.5%
Reading$10$1140.2%
Total spending$5,111$61,334
Source: fool.com

Housing

According to the 2020 Consumer Expenditure Survey, housing is the most significant living expense by a wide margin, and its cost increased by 3.5% in the same year.

The average American spends $1,784 on housing per month, with $1,050 going towards housing payments. However, it will really depend on your living situation.

Furthermore, the cost of housing can range from under $1,000 to over $3,000, depending on your location in the United States. Also, the size of the house and whether you have housemates can affect your spending on housing.

Transportation

Despite the fact that transportation is the second-largest monthly expenditure, Americans have been spending less on it in recent years. There has been an 8.5% decrease in the national average spending on transportation between 2019 and 2020.

Since some of the bigger expenses are intermittent, it’s easy to overlook how much we spend on transportation.

Maintaining and repairing the car every month isn’t necessary, but they add up to $879 per year. Moreover, it’s not common for people to purchase new vehicles, but when they do, it can be an extremely expensive purchase.

In addition, auto insurance may be a monthly or biannual expense, depending on your chosen payment schedule.

Here’s a more detailed look at the transportation costs in the United States:

Transportation expenseAverage monthly spendingAverage annual spending
Vehicle purchases$377$4,523
Insurance$131$1,575
Gas and oil$131$1,568
Maintenance/repairs$73$879
Rental/leases/fees$63$758
Public transportation$22$263
Vehicle finance charges$22$258
Source: US Bureau of Labor Statistics

Read this guide on the cost of owning a car in the US.

Food

Purchasing food includes buying groceries and paying someone else to prepare it for you away from home. On the national level, food spending went down by 10.4% from 2019 to 2020.

One reason for that drop in food spending is very apparent. It will probably come as no surprise to anyone considering the circumstances in 2020: people avoided dining out due to the COVID pandemic.

On average, Americans spent more than $1,000 less on eating out. In 2019 the value was $3,526, and in 2020 it went down to $2,375. 

In this category, spending dropped by 32.6%. However, grocery spending increased by 6.4%.

ExpenseAverage monthly spendingAverage annual spending
Groceries$412$4,942
Dining in fast food and restaurants$198$2,375
Source: US Bureau of Labor Statistics

Healthcare

Regardless of where you live in America, you need comprehensive health insurance. The US healthcare system is world-class for those with insurance or cash to pay privately.

However, you won’t get adequate care if you can’t afford the bills, you won’t get adequate care (or you’ll have to shell out a lot if you need emergency treatment).

ServiceAverage cost
Family doctor check-up$155
Cold medicine for 6 days$9
Antibiotic prescription$23
Source: wise.com

For expats in the US, we recommend private insurance from the reputable provider Cigna Global. Their coverage is comprehensive and inexpensive compared to many other insurances.

Insurance and social security

Also, according to the Bureau of Labor Statistics, the monthly expenditure on personal insurance and pensions amounted to $604. Compared to last year, that was an increase of 1.1.

Private insurance accounts for only 6.7% of spending in this category. Meanwhile, pensions and Social Security make up the remaining 93.3%. Moreover, retirement contributions and Social Security benefits are included in this category.

Here’s a table showing the breakdown of insurance spending:

Insurance expenseAverage monthly spendingAverage annual spending
Personal insurance$41$486
Pensions/Social Security$563$6,760
Source: US Bureau of Labor Statistics

Average cost of living in the USA for a family of 4

The average cost of living in the USA for a family of four is $7,095 monthly or $85,139 per year. This amount includes the following expenses:

  • Housing: $1,784
  • Education: $106
  • Utilities: $300
  • Transportation: $819
  • Food: $610
  • Entertainment: $243
  • Food Away From Home: $198
  • Healthcare: $431
  • Health Insurance: $306
  • Gas: $131
  • Clothing: $120
  • Housekeeping Supplies: $70
  • Personal Care Products and Services: $54

Child care costs in the United States

According to a recent report from Child Care Aware, child care costs are rising more than ever, forcing parents to spend a larger share of their income on it.

Based on the latest available data, the national average child care cost in 2020 was $10,174. For couples, that represents more than 10% of the median income, and for single parents, it is more than 35%.

Based on US Department of Health and Human Services recommendations, parents shouldn’t spend more than 7% of their household income on child care. However, actual expenditures show that parents are actually spending more.

The report also found that child care costs are rising faster than inflation by more than 3%, which means parents are forced to stretch their dollars further than ever. Compared to 2019, the average cost of child care increased by 5% in 2020, whereas inflation was only 1.2% during this time.

Child education

Depending on the institution you choose your child to attend, education in the USA can be expensive. For example, private and public universities have very different pricing structures. However, many private schools offer bursaries and financial aid so kids from lower-income families can still go to school.

To give you an idea of how much child education costs in the United States, here’s a table showing the average school costs:

SchoolAverage cost
Preschool/kindergarten (monthly fee)$1,875
Private school for lower grades (annual)$25,286
University tuition (Public, four-year university)The annual average for state residents is $9,400. For out-of-state, expect averages of up to $24,930
University tuition (Private, four-year University)Annual average of $36,700
Source: wise.com

Cheapest cities to live in the US

We mentioned that the cost of living in the US varies per state. There are places where living is over the top, while there are also more affordable ones. If you want to explore your options, here are the top 3 cheapest cities to live in the US:

1. Kalamazoo, Michigan

  • Cost of living: 24.3% below the US average
  • Metro population: 264,322
  • Median household income: $58,836
  • Median home value: $168,500
  • Unemployment rate: 4.6%

The city of Kalamazoo locates in the southwest region of the US state of Michigan. Kalamazoo Mall, an outdoor pedestrian shopping mall, is one of the city’s most notable features.

Furthermore, the city also includes three reputable schools: Western Michigan University, a large public research university; Kalamazoo College, a private liberal arts college; and Kalamazoo Valley Community College, a two-year community college.

2. Harlingen, Texas

  • Cost of living: 23.4% below the US average
  • Metro population: 443,554
  • Median household income: $41,053
  • Median home value: $88,200
  • Unemployment rate: 6.5%

Harlingen is in the most southern point of Texas, bordered by the Rio Grande and the Gulf of Mexico. Everything in Harlingen is cheaper, from groceries to gasoline. Compared to the national average, locals save about 13% on a good cut of steak or ground beef. 

Moreover, Harlingen’s average home price is a striking $172,000 lower than the national average. A one-bedroom apartment averages $714 per month, which is 41% less than the national average of $1,221.

3. McAllen, Texas

  • Cost of living: 23.2% below the US average
  • Metro population: 861,137
  • Median household income: $41,846
  • Median home value: $90,000
  • Unemployment rate: 7.5%

The location of McAllen on a major migration route makes it a popular bird-watching destination. You won’t want to miss the Quinta Mazatlan, a luxury birdhouse with more than 15 acres of birding habitat. Additionally, the city is home to the Latin American Art Museum, which focuses on Latin American art.

Moreover, McAllen is among the cheapest places to live in the US. Compared to the national average, its housing costs are 42% lower, healthcare costs are 27% lower, and grocery items are 14% cheaper. 

The income you need to live comfortably in the USA as a family

If you are a family of four, you and your partner need to have a combined salary of greater than $85,139 to cover all your monthly expenses and be able to live comfortably in the United States.

As a good rule of thumb, your mandatory expenses should only account for 50% of your after-tax income. You can allot the remaining 50% on your wants and savings. 

If you are looking for jobs in the US that will help you achieve your target income so your family can live comfortably, here is a table that will give you an idea of the average salaries in the country: 

JobAverage annual salary
Cashier$26,780
Financial analyst$106,340
Graphic designer$59,970
Mobile developer$81,320
Receptionist$32,910
Software engineer$113,720
Teacher (Secondary School)$69,490
Web developer$81,320
Source: wise.com

Based on this table, a Software Engineer and Financial Analyst are two of the highest-paid jobs in the country.

Read this guide on salaries in the USA.

Anna

Anna is an experienced expat and writer. She has been living abroad for over 6 years.

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