This expense may be a mortgage or rent, and it is typically the single biggest expense for consumers. Housing is considered a necessity, an essential cost of living that cannot be avoided. The CPI does not, however, include costs associated with income taxes or money consumers spend on investments like stocks, bonds or life insurance.Д¬ost of living calculations are based on various key necessities and expenses. It also includes such consumer expenses as water and sewer service fees and sales and excise taxes. This index measures changes in prices for goods and services purchased by urban households. Bureau of Labor Statistics publishes the widely referenced Consumer Price Index, or CPI. Missouri Economic Research and Information Center (MERIC) Cost of Living Index.Economic Policy Institute (EPI) Family Budget Calculator.The Council for Community and Economic Research (C2ER) Cost of Living Index.There are various cost of living indexes available online including: Each city or region is given a number thatвЂ™s either above or below 100, which is a barometer that consumers can use to gauge how the cost of living in a particular city relates to the national average. Typically, the index is based on expenses such as food, housing, utilities, transportation, health care and other goods.ДЇor most cost of living indexes, the number 100 is used to represent the national average cost of living. People generally feel more comfortable spending on non-essential items when broader economic conditions are positive.ДЄ cost of living index is a city-to-city comparison of the cost of living in each place, based on a variety of consumer expenses and spending categories. Discretionary spending could also include luxury goods and travel.Дiscretionary spending is influenced not only by how much disposable income one has remaining after paying for essential expenses, but also by the overall economic climate. These might include recreation, entertainment or other items consumers purchase when they have money leftover after necessary expenses are covered.

The term discretionary spending, on the other hand, is used to describe non-essential costs. Necessary expenses are living costs that cannot be avoided. Necessary spending is the money used to cover basic or essential needs, such as housing and food. What to do when you lose your 401(k) match Should you accept an early retirement offer? How much should you contribute to your 401(k)?

Cost of living calculator