How to Estimate Your Future Cost of Living


When moving into a new house or when adding amenities to your current situation or otherwise changing your daily financial habits, you'll need to adjust your budget. Your future cost of living is the amount of money you'll need to sustain all bills and luxuries once you've implemented changes. For example, if you currently rent a house for $1,200 per month, but you're moving to a house that costs $1,500 per month, your future cost of living will be at least $300 more per month than it currently is. Add onto that any fluctuations in energy, water and other utilities.

Determine your current cost of living, which is the best place to start because it will help you see where your money is going. Add up all of your current financial obligations, including rent or mortgage, utility bills, estimated grocery costs, gasoline, clothes, insurance, memberships and entertainment.

Add up your total income from all sources. You probably know exactly how much you make at your job, but it might be more difficult if you work on commission or receive tips. The best way to do this is to add up your income from the last six months and average it. Don't forget to add things such as alimony, child support, annuities and any other sources of income.

Create a spreadsheet on which to estimate your future cost of living. Along the left side, list all of the expenses you believe you will incur and then place the appropriate figure in the box next to each expense.

Know that your rent or mortgage is likely to be the largest factor when determining future cost of living. If this amount is increasing, or decreasing, you'll need to adjust all other expenses accordingly.

Calculate the cost of utilities per square foot in your current living situation. For example, if you live in a 1,500 square foot home, and your electricity bill is usually $120, then you're spending about $12.50 per square foot of living space. This is an easy way to calculate future expenses--apply the price per square foot to the square footage of your new home.

Add up all of the expenses you've listed for your future cost of living. This will give you the fixed costs that you will need to cover each month, and will allow you to compare your expenses to your total income.


  • Remember that the cost of electricity will also depend on energy-saving appliances and other factors. For example, if you're moving into a house with double-paned windows and you didn't have them before, you'll probably spend less on air conditioning. Certain things cannot be estimated with any degree of accuracy, such as emergency bills or changes in your cable television rate. Make sure you have sufficient padding to cover unexpected costs. Talk to the current homeowner. Ask him what his utilities run on average to gain a better estimate of what you will have to spend.