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.