How to Calculate the Cost of Living
In order to have a comfortable life and good financial health, it’s important to understand your cost of living.
What is the Cost of Living?
The cost of living is how much it costs for a person to live according to their lifestyle, location and preferences.
Why understanding cost of living matters
It can help you create a budget, make better financial decisions, as well as calculate how much you’ll need to save for retirement.
The 50/30/20 rule
Using this rule you can quickly see if you can afford to live in a certain area and how much money you would need to live on.
How is Cost of Living Calculated?
Your cost of living is simply calculated by adding up all your monthly expenses. That number is how much it costs to live as you for a month in your given location.
How Can You Lower Your Cost of Living?
The simple way to lower your overall cost of living is by: – Lowering your monthly expenses – Reducing your “wants” – Increasing your income
Track and maintain your budget
The main step to lowering your expenses is to track and keep a budget. By measuring what you’re spending your money on, it’ll be much easier to manage a budget and set goals for yourself.
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