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Use the Cost-Of-Living Calculator to Plan Your Budget

written by: moonshadow•edited by: Rebecca Scudder•updated: 6/29/2011

Knowing how your budget fits in to your new home community can be a vital part of making a decision to move. With cost-of-living calculator, you can learn before you leap what parts of your new home might be more expensive than you're used to.

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    If you are considering moving from one community to another, consult the cost of living calculator before you start packing.

    With the cost of living calculator, you can get a good estimate of the difference in everything from food and utilities to medical care costs in your new community. There are many different types on the web where you can access the cost of living calculator, but they are all based on data collected by the U.S. Census Bureau.

    Using a Cost of Living Calculator

    To use the cost of living calculator, you will need to have either your current base salary or your projected salary in the new location. You will also need to know the two cities that you wish to compare. The easiest way to use the calculator is to enter your current base salary and your current location and asked the calculator to figure out what it would cost to maintain your current style of living in the new community.

    There are, however, some things that must be considered when using the cost of living calculator. Utility costs in both locations will be based on an average for the types of household in that location and may not accurately reflect your personal utility usage. If, for example, you have opted to turn down your thermostat in an attempt to reduce your carbon footprint or simply save money, the utility cost estimate in both places may be higher than what you actually pay.

    Cost of Utilities

    This can be a double-edged sword. For example, if you live in the Midwest or Northeast, where utility costs are generally very high and are considering a move to the Pacific Northwest, where utility costs are much lower, the calculator may not accurately reflect the difference in overall expenses you would face after a move.

    Another factor to keep in mind when using the cost of living calculator is that the calculator cannot reflect your personal habits. For example, if your entertainment budget consists mainly of your cable television package, the cost of living calculator may not reflect the difference in entertainment costs in your new location.

    Features of Cost of Living Calculator

    One of the nicest features of some cost-of-living calculators is that it will tell you which of the major expenses is most significantly different in your new location. The cost-of-living calculator looks at food, utilities, housing, transportation, and medical expenses before making an overall comparison of the cost-of-living from the two cities.

    The cost-of-living calculator also checks your current home's cost-of-living against the national average. Even if you are not considering moving, using the cost-of-living calculator can be a good indicator of how your personal costs compare to national averages.

    Above all else, the benefit of the cost-of-living calculator is that it lets you know, if that new raise is really worth the move. In many parts of the country, the raise would have to be more than 30% higher than your current rate of pay to even be worth considering. This tool can also be very useful for new college graduates trying to determine whether they can afford to live on the entry salary they are being offered.