Montgomery, Alabama Cost Of Living

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B+

Overall 14%

Goods & Services 11%

Housing 30%

The cost of living index is based on a national average of 100. For example, if the cost of living is 90, then it is 10% lower than average. If the cost of living is 110, then it is 10% higher than average. The breakdown for each index is as follows: goods & services (33%), groceries (13%), health care (5%), housing (30%), transportation (9%) and utilities (10%). If the cost of living data was unavailable for this city, estimates based upon nearby cities were used.
Index	Montgomery	Alabama	National
Cost of living	86	88	100
Goods & Services	89	94	100
Groceries	99	98	100
Health care	85	91	100
Housing	70	72	100
Transportation	93	93	100
Utilities	100	101	100

Key findings

The cost of living in Montgomery is 2% lower than the Alabama average
The cost of living in Montgomery is 14% lower than the national average
Montgomery housing is 30% lower than the national average
Alabama general sales tax is 21% lower than the national average
Alabama state income tax is 19% lower than the national average

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Price difference in compared to

Cost of living index
Goods & Services index
Groceries index
Health care index
Housing index
Transportation index
Utilities index

Median Income & Debt-To-Income Ratio

Median Income	Per Year	Per Month	Max Budget (28% DTI)	Max Budget (36% DTI)
Owners	$59,148	$4,929	$1,380	$1,775
Renters	$27,458	$2,288	$641	$824

To approximate the cost of living and the housing affordability in Montgomery, AL, we can look at the percentage of income that is available to be spent on monthly housing, otherwise known as the debt-to-income ratio (DTI). To stay on the safe side, a consumer should not spend more than 28% of his or her gross income on housing-related expenses and costs and not more than 36% of income on all expenses and debts. Homeowners in Montgomery 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

State	General Sales Tax	With Max Surtax
Alabama	4%	13.5%

Alabama Income Tax

State	Income Tax (Low)	Income Tax (High)
Alabama	2%	5%

Goods & Services

Item	Montgomery	National avg.	Difference
Haircut	$17.80	$20.27	12.2%
Beauty Salon	$42.20	$40.39	4.5%
Toothpaste	$2.14	$2.36	9.4%
Shampoo	$1.02	$1.08	5.5%
Movie	$6.92	$10.99	37.0%
Bowling	$12.50	$15.49	19.3%

Groceries

Item	Montgomery	National avg.	Difference
Ground Beef	$3.70	$4.30	13.9%
Fried Chicken	$1.55	$1.40	10.5%
Milk	$2.49	$2.20	12.9%
Potatoes	$3.09	$3.22	4.1%
Pizza	$9.74	$10.74	9.3%
Beer	$9.72	$9.60	1.3%

Health Care

Item	Montgomery	National avg.	Difference
Optometrist	$83.33	$109.73	24.1%
Doctor	$92.00	$118.34	22.3%
Dentist	$71.40	$100.94	29.3%
Ibuprofen	$11.00	$9.93	10.8%
Lipitor	$502.96	$469.53	7.1%

Housing

Item	Montgomery	National avg.	Difference
Home Price	$116,600.00	$184,700.00	36.9%
Avg. Mortgage Payment	$980.08	$1,229.62	20.3%
Apartment Rent	$827.00	$949.00	12.9%

Transportation

Item	Montgomery	National avg.	Difference
Gasoline	$2.46	$2.71	9.4%
Tire Balancing	$50.86	$51.86	1.9%

Utilities

Item	Montgomery	National avg.	Difference
All Electricity	$170.85	$170.84	0.0%
Phone	$185.19	$187.18	1.1%

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.

Nearby cities with low cost of living

City	Population	Cost of Living Index	National Avg.
Elmore, AL	1,890	81	18.6%
Coosada, AL	1,185	88	11.7%
Wetumpka, AL	7,654	89	11.4%
Millbrook, AL	15,045	90	10.4%
Pine Level, AL	3,918	90	10.3%
Montgomery, AL	201,717	86	13.9%

Cities with similar population

City	Population	Cost of Living Index	National Avg.
Moreno Valley, CA	202,061	115	15.5%
Aurora, IL	200,907	100	0.3%
Columbus, GA	200,303	93	6.6%
Fayetteville, NC	203,670	89	11.2%
Yonkers, NY	199,725	145	45.1%
Montgomery, AL	201,717	86	13.9%

Source: This data reflects 2021 and was released from C2ER in January, 2022; this is the most current data available.