An overview of the general cost of living index for Pelham, AL is displayed above for your reference. Residents in Pelham, AL enjoy a cost of living index of 95. This index is 6% higher than the Alabama average, and 5% lower than the national average. The following categories are used when determining the cost of living index for any given city: health care (5%), transportation (9%), utilities (10%), groceries (13%), housing (30%), and goods/services (33%). Clearly, housing and goods/services make up the majority of the formula for calculating the cost of living index. Because of this, the general cost of living for any given area can be estimated by looking at the cost of everyday goods in that area. For those living in Pelham, AL, the average cost of goods and services is 8% lower than it is in Alabama, and it is 11% lower than the national average.