Montgomery cost of living index

An overview of the general cost of living index for Montgomery, AL is displayed above for your reference. Residents in Montgomery, AL enjoy a cost of living index of 88. This index is 1% lower than the Alabama average, and 12% 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 Montgomery, AL, the average cost of goods and services is 2% lower than it is in Alabama, and it is 5% lower than the national average.

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Salary Calculator

Use the salary calculator to compare your current salary in Montgomery, AL to any other city. The salary calculator will tell you how much you would need to earn in any given city to maintain the same standard of living based on the cost of living in each city. For example, if the cost of living in the city you are looking to relocate to is higher than the cost of living in Montgomery, AL, then you would need to earn more income in order to maintain the same standard of living. To use the Montgomery, AL salary calculator, simply enter in the name of the new city, then adjust the slider to your current income. The salary calculator will do the rest and let you know if you need to earn more or less in the new city. You will also see a complete breakdown of the cost of living.

Median Income & Debt-To-Income Ratio

One can approximate the cost of living and the housing affordability in Montgomery, AL by the percentage of a person’s income that he or she spends on the monthly housing, otherwise known as the debt-to-income ratio (DTI). To stay on the safe side and keep one’s head above the water, a consumer should never spend more than 28 percent of his or her gross income on housing-related expenses and costs and not more than 36 percent of income on all expenses and debts. Homeowners in Montgomery, AL have a median income of $59,148. Therefore, the amount that a consumer should spend on housing costs should be no more than $1,380 per month to avoid calamity and poverty. The renters in the city have an income of about $27,458, which would make their monthly maximum allowable rental costs $641.

Alabama Sales Tax

Alabama Income Tax

When assessing the complete cost of living in Montgomery, AL, the Alabama income tax and the Alabama sales tax percentages should unquestionably be taken into consideration. Sales taxes aren't just levies imposed onto sold goods, but they also include taxes that are charged when services are provided for a fee. The rates are different from state to state and can run has high as 7 percent. Some states have no sales tax at all. The Alabama maximum surtax is 13.5%, and the Alabama sales tax is 4%. By contrast, income tax is an unfortunate obligation that is charged by the government against earnings. Just like sales taxes, the rates for income taxes differ from state to state. They also decrease or increase according to the individual's tax bracket. Tax rates can run as high as 9 percent, with a minimum of zero. Income tax rates range from 2% to 5% in Alabama.

Goods & Services

Groceries

Health Care

Housing

Transportation

Utilities

Although the cost of living data is updated regularly, this cost of living information is to be used as estimates only as prices can change on an ongoing basis.

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Source: The Montgomery, AL cost of living data displayed above is derived from the Council for Community and Economic Research (C2ER) for 2017.