It Costs You Over $34,000 a Year To Live in Houston — Here’s Why

Living in Texas comes with big considerations, including your cost of living budget, especially in a big city like Houston. GOBankingRates conducted a study and found that, on average, it costs a regular Houston citizen over $34,000 a year to live there. And with more and more unforeseen circumstances happening every day, there’s more need to have an emergency fund on hand in the event of a worst-case scenario.

To calculate the minimum emergency savings needed in top U.S. cities, including Houston, GOBankingRates defined the lowest amount of money needed in every state as the dollar figure required to afford three to six months’ worth of living expenses. Using the top 100 cities by population as sourced from the U.S. Census American Community Survey, the cost of living indexes as sourced from Sperling’s BestPlaces can be found.

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Using the cost of living index and the average expenditure cost, the one-month expenses can be calculated and extrapolated for three to six months. This estimate captures the minimum emergency savings needed in the top 100 U.S. cities to cover basic expenses for three to six months.

Here’s how it breaks down for residents living in Houston .

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Groceries

Everyone’s got to eat, and that means going to the grocery store at least once a week, if not more.

GOBankingRates found that the annual cost of groceries for Houston residents came to roughly $5,595, beating out more expensive metropolitan areas, such as New York with its $6,695 in grocery costs. However, it went over the rate of cities like Indianapolis, which had a yearly grocery bill of $5,338.

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Healthcare

Houston has some of the best healthcare facilities in the country, but, of course, that comes with a hefty price. Healthcare costs add up to $5,563 each year.

That’s certainly less compared with other cities in Texas, such as Dallas, which has an annual $5,739 tally for healthcare costs, and Austin, which racks up $5,944 for expenses related to medications, doctor’s appointments and other similar medical services.

Housing

Buying a house in Houston might actually be a smart move when looking at the costs there compared with other real estate markets in which the costs of owning and maintaining a home are becoming more unaffordable.

Houston, on average, sees its residents pay $10,938 each year for housing, which is on par with another Texas city, San Antonio, which comes in slightly higher at $10,953.

Utilities

Across the country, as climate change impacts the lives of everyone, utilities are changing in how much they are used and at what price point companies can charge for them. Texas has been known to have power grids go down in major storms, and Houston is susceptible to floods, tornadoes and other natural disasters.

All that being said, you might be surprised to find out that the typical Houston resident pays about $4,390 for utilities, which is under the national average of $4,549, according to the Bureau of Labor Statistics.

Transportation

Houston is known for many things, and one of them is traffic. Getting around the city typically requires a personal vehicle of sorts, as public transportation can only do so much, especially when the temperatures get extreme.

Houston residents tend to pay $7,364 each year just to zoom around town, which is better than another major city that has a reputation for traffic, Los Angeles, where the average citizen spends $9,297 on transportation. Compare it with other cities in Texas that are much smaller, like Laredo, where the average transportation cost is $5,327.

Miscellaneous Costs

There are some cost of living expenses you just cannot account for, no matter where you live, including Houston. Annually, residents of Houston find themselves with $978 going toward expenses they didn’t plan for yet had to pay for regardless.

This is not a hefty price tag when looking at other major cities, like San Diego, where annual miscellaneous expenses came out to $1,563, and Denver, with $1,287 in miscellaneous costs per resident.

Monthly Budgeting

Houston is a major American city with a population of nearly 2.3 million people, all of whom need to spend money on goods and services to keep living there. GOBankingRates found that if emergency budgeting was laid out month to month, with six months being the maximum, residents of Houston should plan to save for anywhere between $2,902 for one month of cost of living expenses and $17,414 for six months of cost of living expenses.

Methodology: GOBankingRates defined the minimum emergency savings needed in every state as the amount needed to afford three to six months’ worth of living expenses. Using the top 100 cities by population as sourced from the U.S. Census American Community Survey, the cost of living indexes as sourced from Sperling’s BestPlaces can be found. Using only the necessary expenses from the Bureau of Labor Statistics Consumer Expenditure Survey, including groceries defined as “food at home,” housing defined as “shelter,” utilities defined as “utilities, fuels and public services,” transportation defined as “gasoline, other fuels and motor oil” and “other vehicle expenses,” healthcare, and miscellaneous. Using the cost of living index and the average expenditure cost, the one-month expenses can be calculated and extrapolated for three to six months. This estimate captures the minimum emergency savings needed in the top 100 U.S. cities to cover basic expenses for three to six months. All data was collected and is up to date as of January 19, 2024.

This article originally appeared on GOBankingRates.com : It Costs You Over $34,000 a Year To Live in Houston — Here’s Why