The aim of conducting a cost of living analysis is to discover how much it costs to live in a particular place that may be a different state or a different country altogether. An estimation of the cost of living may be for educational purposes or for the purpose of calculating how far an individual’s present income or savings will go in a certain area. The best tips for a cost of living analysis include having a motive for the analysis and analyzing different aspects of the area.
Knowing the motives for conducting a cost of living analysis will show the aspects of the area to analyze. For instance, if the purpose for a cost of living analysis is to find out how suitable an area is for retirement, the criteria will be different from that of a student or recent graduate who is simply looking for a place to stay and work. This is because a cost of living analysis is closely related to the concept of standard of living. That is to say that a person who is assessing the cost of living in an area will calculate the cost of maintaining his or her present standard of living in the area under consideration.
A retiree might consider living in a retirement community or a home similar to the one in which he or she is already living. In this case, the person would need to find out how much it will cost to buy or rent a similar place in the area under consideration. The price for housing may be cheaper or more expensive in the new area, which is a part of the cost of living analysis for the retiree. This may be in contrast to the recent graduate who is simply looking for a one-bedroom apartment or a flat to share with others. In this sense, the cost of living considerations for the graduate and the retiree are different.
The retiree may also have to consider some extra factors that the graduate would not add to the cost of living analysis. For instance, the retiree may have one or two dogs or cats that will require veterinary attention. This may not be an issue for the graduate and therefore would not affect his or her analysis. Other tips to consider that may affect the analysis include aspects like the cost of food and clothing, which is determined by the person doing the analysis and the reason for the analysis. Other factors to consider when conducting a cost of living analysis are the cost of utilities like electricity and gas in the dwelling as well as services like cable and Internet.
