Chicago wears many feathers in its cap. For starters, it’s the most extensive city in the Midwest and the third-most populated one, with 2.7 million people calling it home! With an economy that gives other cities a run for their money, Chicago attributes its growth to industries like transportation, finance, technology, telecommunications, commerce, and education! Let’s not forget the gorgeous trail stretching for 18 miles alongside Lake Michigan, the lip-smacking food, the attractions, and the efficient public transportation system! What more does one need to live a comfortable life?
At the same time, it’s important to add that the living costs in Chicago are high, although reasonable when compared to NYC, San Francisco, or LA. So, if you see yourself as a future resident of the city, you should be aware of the types of expenses you’ll need to budget for when you start living there.
Here is everything you need to know about the cost of living in Chicago:
1. Rental Expenses in Chicago
Thanks to the global pandemic, rental prices in Chicago have generally gone down. But compared to rent growth in 2020, rental rates have risen by 8.5% this year. Today, the median price for a one-bedroom apartment is $1284, while a two-bedroom apartment is $1415. Are you comfortable with studio apartments? In that case, you might find something for a monthly rent of $1025. If we compare these prices with the national average of $1660, it’s evident that they fall below the national average. In other words, the rental market is now at a stage where a house or a room is likely to fetch reasonable rents. So, if you’re interested, you can explore your options and end up getting a great deal!
However, this is a temporary phase and will change as soon as the pandemic subsides and rents revert to pre-pandemic levels. Know that factors such as the neighborhood chosen, the perks offered, proximity to Lake Michigan, and public transit facilities influence the rent of an area. If you prefer a big-budget area, you could check out neighborhoods like the Fulton Market, Greektown, and the Magnificent Mile stretch. One-bedroom apartments in the Fulton Market and Greektown have an average rent of $2,448 monthly. As far as the Magnificent Mile is concerned, you can find one-bedroom apartments for $4875. You could add River North, Streeterville, and River West to the list of upscale neighborhoods.
On the other hand, if you’re looking for something more low-cost while living within the city premises, the ideal neighborhoods would be Lakeview or Little Italy for monthly average rents of $1,696 and $1,793, respectively. Some more communities with low living costs include The Island, Austin, and West Pullman. Finally, neighborhoods that might be more suited to your liking include Edgewater, Rogers Park, and Ravenswood.
In the end, regardless of rental prices, if you have to struggle to gather the rent, find a roommate to share your living costs with and save some money in the process.
2. House-buying Expenses in Chicago
The neighborhood you choose to buy a house in and the amenities that come with it will play a significant role in determining the housing price. For instance, buying a place in the downtown area might prove pricier than in a suburban community.
Due to numerous houses being available for sale while the demand was low, home prices reduced and fell below the national average. The median home price in January 2020 was $260,000 while the national median price was $245,000, indicating that there wasn’t too much difference between the two. One can conclude that it might be wise to invest in a house instead of renting one, though property taxes in the city are at 2.3%, twice the national average! Since you’re likely to pay more money every year, you might want to think things through before deciding to invest.
3. Food and Grocery Expenses in Chicago
Chicago is renowned for its food and the list isn’t confined to deep-dish style pizza! So, it’s natural for residents to want to eat out and savor the numerous cuisines served at Michelin-starred restaurants. If you’re a foodie or don’t like the idea of cooking, you need to make sure you have the funds to dine out regularly because it’s going to eat into your budget.
You’ll need $15.50 to eat at a reasonably-priced restaurant. But if you decide to go to a fancier place and take someone with you, you’re going to have to dish out $75. In addition, Chicago has a restaurant tax of 0.5%, so remember this every time you step out to eat, especially when you have a friend or family member accompanying you and you volunteer to pay the bill.
On the other hand, if you take a more sensible decision and split your time between cooking and eating out, you might get to save a little. As a single adult with a full-time job, you’re going to have to spend $3,246 on food annually, according to the numbers shared by MIT’s Living Wage Calculator. Also, if you’re going to spend time in the kitchen whipping up dishes, you’re going to need groceries, and in Chicago, they’re expensive. In fact, the living costs for groceries in Chicago exceed the national average by 7 percent!
To give you an idea of what you might need to spend, here are the prices (According to Numbeo’s data) of some items:
- Milk (a liter): $0.80
- Bread (a loaf): $2.79
- Eggs (a dozen): $2.18
- Ground beef (one KG): $11.88
Therefore, while budgeting for rent and utilities, prepare smaller budgets for other expenses, including food and groceries so that you remain within the spending limit.
4. Utility Expenses in Chicago
Summers are pleasant, and residents love to hang outside during these months. But winter in Chicago is freezing, so it’s a given that you’re going to have higher utility bills due to extensive use of the heater. Data reveals that utility costs in the city fall below the national average by 7%.
Utilities comprising electricity, cooling, heating, trash, and water, total $160.25 monthly. The internet is an essential part of utilities, so taking up a basic plan will require you to pay $56.67. In a word, your total utility bill will total $216.92. Don’t forget to add a ‘cloud tax’ of 9% on streaming services like Netflix to your internet bill. Your cellphone bills have a tax rate of 43%, among the highest in America! So keep aside a little extra money for these bills every month.
5. Travel Expenses in Chicago
As a future resident of the city, you’re going to be traveling to different places in the city, whether by car or public transit, so you need to budget for travel costs. According to MIT data, single adults need to spend $5149 as travel expenses annually. But those with a wife and a child can expect to pay more than twice the amount, i.e., $11,753!
The Chicago Transit Authority (CTA), the city’s primary transportation system and the second-largest in America, offers multiple trains and buses to residents to move around the city, so that’s a huge plus point. It’s definitely the preferred choice instead of a car because 30% of residents use them to commute daily. Biking is another option you can use to travel around the city. Divvy, Chicago’s bike-sharing program, provides 6000 bikes across 600 docking stations for residents’ benefit. You need to pay $3.30 per trip or $108 for the whole year. If you want to use the CTA regularly, get a monthly pass made for $105. Else, you can spend $2.50 on a one-way trip. Anyone living in the suburbs can access Metra Rail and dish out anywhere between $116 to $239 on an unlimited monthly pass.
Taxis and ridesharing services can also help you reach your destination. Moreover, Chicago scores high on the walkability scale, so you can reach places on foot and get some exercise at the same time.
If you prefer to get around by car, brace yourself for multiple expenses, beginning with gas at $3.21 per gallon. In addition, there’s parking, which is expensive too. For example, if you have to park your car for two hours, expect to pay an average of $21.18. Finally, let’s not forget auto insurance, which despite being the cheapest in the state, has an average cost of $2,059 annually. Thankfully, it’s still lower than the national average of $1,427.
While we’re on the topic of expenses, we should also remind you about Wheel Tax, applicable to car owners only in Chicago. They’re required to buy a Chicago City Vehicle Sticker every year and pay between $90.88 to $144.33 based on their car size. In the end, before you start commuting by car, know that Chicago is third in line after NYC and Philadelphia in terms of severe traffic congestion. Therefore, you should consider these factors before getting a car.
Overall, travel expenses in the city amount to 13.7% more than the national average.
6. Healthcare Expenses in Chicago
The proverb ‘health is wealth’ is something we’ve always heard but never given due importance. Healthcare comprises a necessary expense and should form a part of your cost of living budget.
Using data from the Bureau of Labor Statistics and the Agency for Healthcare Research and Quality, MIT revealed that the healthcare costs for an individual with a full-time job amount to $2,862 annually. Someone with a spouse and a child will end up spending $7,460 annually.
Chicago has a robust healthcare system that’s among the best in America. Some top-notch hospitals and medical centers include Northwestern Memorial Hospital and the University of Chicago Medical Center. Last but not least, the Illinois Medical District houses many medical centers and hospitals.
The exact amounts to be spent as healthcare costs might be challenging to share because they vary from person to person depending on their health issues and requirements. Nonetheless, a checkup with a doctor will require you to spend $134. Also, if you need to buy prescription medicines, be ready to spend an average of $494.33, without insurance!
In the end, it’s heartening to know that residents end up spending 1.1% less than the national average on healthcare.
7. Entertainment Expenses in Chicago
With all your professional and personal commitments, you need time for yourself. The expression ‘time for yourself’ includes taking the time to work on staying fit and doing what you enjoy.
Let’s talk about fitness first before we venture into entertainment. Do you like to work out at home or in the gym? If the best place for you to exercise is in the gym, make sure you have the finances for it. You’re going to need an average of $55.41 on gym membership fees every month. On the other hand, if you’re more interested in yoga, be ready to pay $15.76 per class. You could even search on the net to see if yoga-in-the-park classes are being held because many parks do them for free.
Natural forms of exercise are always a better option, and when they’re free, they’re even more appealing! So, spend some time walking, running, or biking along the lakefront trail, or check out The 606, a network of parks and trails that are perfect for all of the activities mentioned above. Winters in Chicago are incredibly harsh, so there’s no way you can perform outdoor activities. But you could try skating because it results in elevated heart rates.
Moving on to entertainment options, Chicago has its share of comedy shows, theater, nightclubs, live music venues for its residents. If these don’t interest you, you can always watch a good movie and pay $13.50 for a ticket. Should you want snacks and drinks to go with it, you must pay for them separately. If art and architecture fascinate you, you could go for a Chicago architecture river cruise at $40 per ticket or drop by the Art Institute of Chicago, where you might have to spend anywhere between $14 to $29, based on your age and the state you live in. You can also pop by the Chicago Observation Deck, where you need to dish out $30 for entry.
The Museum of Science and Industry is another attraction you could explore for $21.95. Finally, should you feel like watching a Cubs game, head over to Wrigley Field. The ticket prices here will vary based on available seats and their placement in the stadium. In summary, free recreational options include Millenium Park, the Chicago Riverwalk, and the Lincoln Park Zoo!
8. Income requirements in Chicago
In Chicago, the living wage or the bare minimum essential to living above the poverty limit stands at $16.32 hourly for singles with full-time jobs. This amount doesn’t include dining, entertainment, and vacation costs; neither is there any scope for savings. Also, data indicates that Chicago’s average annual household income amounts to $73,753 to live well.
Legal jobs top the list in terms of jobs that pay well, with professionals earning $128,000 annually. Construction and extraction jobs also pay well and have annual earnings above $72,000.
To conclude, as far as rents go, it’s always wise to follow the 30%rule and spend 30% or less of your gross income on it.
9. Taxes in Chicago
Chicago is among the cities with the highest tax rates in America! The sales tax rate in Chicago is a mix of the state sales tax rate and local sales tax rate (city and county) and totals 10.25%. The state sales tax rate is 6.25%, and the remaining 4% equals the city and county sales tax rate.
In terms of the income tax rate, it stands at 4.95% for all taxable incomes. Finally, property taxes in the state stand at 2.16%, the second-highest in America, indicating that most people who move to the city prefer renting a house.
Conclusion
So, is Chicago going to be your next place of residence? Our fingers are crossed! Chicago may come across as both cheap and expensive, depending on the cities you’re comparing it to. If you consider other midwestern cities, Chicago is extravagant. On the other hand, if you consider NYC, LA, or Boston, Chicago seems like a far more reasonable option. In the end, two things about the city stand out and make it an ideal place to move to. One, you get the feel of a close-knit community despite having access to a ton of perks. Two, since the city’s centrally located, it makes it easier to travel across the country!
