Cost of living is the amount of money required to sustain a certain standard of living at place by affording the basic expenses such as food, housing, healthcare, transportation, etc. The cost of living is often used in order to know how expensive it is to live in one city compared to another one. Cost of living varies from place to place and from time to time, depending on the prices of goods and services required for maintaining an average level of standard of living.
The cost of living is related to wages; hence it can impact one’s choice in work, choice of city to live, ability to save money, pay off debts, having a child, time of retirement and so on.
Cost of living is usually measured by calculating the average cost of a number of specific goods and services required by a particular group of people.