Chicago is one of the topmost expensive cities in the world, with an average cost of living of $2241. As a key economic hub of different industries, it is a prime place to live in. It offers a lot of job opportunities and recreation activities.

The median after-tax salary here is $5162. But for it, you need to work hard to afford to live here. 

According to Pew Research, the price level in metropolitan Chicago, while only 6.6% above the national average, is 34.6% above the price level in Danville, a small city about 140 miles to the south that is the second-cheapest place to live in the United States.

According to Expatistan, Chicago residents spend an average range of $2,777(singles) to $5,009 (Family of four). This is more expensive than in 84% of cities worldwide. 

Another key indicator for living standards is a city’s cost of living index. This compares the cost of living in a metro area to the national average based on a comparison of prices for a representative sample of items.

The Chicago cost of living index is 120. That makes it 20% more expensive than the national average.

Housing is the biggest expense you’ll face, which mainly drives up the cost of living in Chicago. The city’s housing index is 154. With Illinois being second most expensive state for property taxes. 

The Bureau of Labor Statistics also gives you two special metrics to measure the cost of living.

First, the Consumer Price Index (CPI) measures average changes in prices paid for typical consumer goods and services. The CPI for Chicago recently showed regional prices up 1% month-over-month and up 4.7% year-over-year. 

The BLS’s Consumer Expenditure Survey shows average expenditures and income for residents. The most recent Consumer Expenditure Survey for Chicago found Metropolitan households spent an average of $64,804 annually. 

According to Livingcost.org, Chicago residents spend a monthly average of:

Housing

Usually, housing is your most significant living expense. Finance experts recommend it take up at most 30% of your budget. 

Currently, a median-priced one-bedroom in Chicago rents for $1,291 a month. A two-bedroom apartment in Chicago will cost you around $1,423 per month.

For people looking for a home, the average going price in 2021 is $375,000, an 17% increase year-over-year in housing prices. 

Food

Chicago is a foodie’s city. So both cooking at home and dining out can take a hefty chunk of your budget. 

If you’re in Chicago, you can enjoy tasty meals at every level, from hot dogs to Michelin-star meals. From Chinese to Polish, Ethiopian to Yemeni, Italian to Mexican — anything you crave is here for you to savor!

Chicago's cost of living for groceries is just over 7 percent above the national average. If you buy your own food, prepare to pay from $3.03 for a gallon of milk to $5 for a pound of chicken. This high price partially comes from the 2.25% tax for groceries in Chicago.

And for those who want to eat out, you should prepare for $4.59 (cappuccino) to $10.26 (fast food meal, i.e. McDonald's) to $63 (restaurant dinner for two). And this doesn’t yet include the tips! Again, this is in part due to the high taxes involved - a restaurant tax of 0.5% in addition to the highest sales taxes in the country, for a total of 10.75% on top of your bill.

Utilities

The climate in Chicago is very sporadic and challenging. You can experience humid summers and frigid winters. And you will even suffer from four different seasons in one day.

This makes utilities a particularly high expense. With extremely cold winters, you could expect high heating expenses. A basic utility bill that includes electricity, heating, cooling, water, and garbage collection for an apartment averages around $235.02 per month in Chicago. 

Aside from these basic utilities, you should also account for internet, cable, and phone services.  

The average cost of internet in the U.S. is $66.20 per month. And many internet providers offer varied packages that bundle internet, cable, and phone together.

Transportation

Chicago is an expensive city for drivers. So it would be best to commute with the vast amount of options available.

On average, experts say that transportation could take from $5,149 (single) to $11,753 (family of four) per year.

With long lines of traffic and severe congestion, Chicago is one of the worst cities for drivers. Not only do you pay for parking fees, but you also have to pay higher costs for gas (starting at around $2.76/gallon) and maintenance expenses.

Commuting also has its heavy costs. In Chicago, the average commute time is about 40.99 minutes. This could double during bad weather such as frigid winters. But it is still pretty affordable to ditch the car and commute.

You can use the Chicago Transit Authority (CTA) public transit system for $105 a month for a local monthly pass or $2.50 for a single one-way trip on the L. You can also grab the L train to O'Hare and get out of town, with a $5 full fare.

Healthcare

Now more than ever, healthcare is essential for your budget.

The Bureau of Labor Statistics and the Agency for Healthcare Research and Quality estimate annual healthcare costs of around $2,862 (single) to $7,460 (family of three).

Childcare

In Chicago, childcare will cost you $1,577 per month or $18,924 per year. At this rate, you can expect to shell out almost the same amount of money to fund your child’s college education. Child care for an infant is only 1.2% less than in-state tuition at a college or university. While Illinois has child care subsidies, the income brackets for this do not suffice the cost of living in Chicago. 

Childcare programs also have hidden fees that tack on top of the advertised rates. Even in-home nannies cost up to $20/hour.

To reduce the burden, you can look up employer-provided childcare centers and daycare centers from some colleges and universities at reduced costs. 

Included in childcare expenses is education. Public schools offer tuition-free programs, but you should also expect to pay for miscellaneous fees. Private schools here, while one of the topnotch in the nation, will also cost you from $6,340 (elementary) to $12,530 (secondary).

According to College Tuition Compare, the average tuition & fees for Colleges in Chicago is $11,910 for in-state students and $21,732 for out-of-state.

Taxes

Taxes tack on a lot in the cost of living of Chicago Metropolitan residents.

Here are the taxes you should expect to pay here:

• The Illinois income tax rate is a flat 4.95%.
• The sales tax in Chicago is 10.25%. This Chicago sales tax rate includes the Illinois sales tax (6.25%), the Cook County sales tax (1.75%), and the Chicago sales tax (1.25%).
• The effective property tax rate in Chicago is 2.10%. 
• The average homeowner in Chicago pays $7,875 in property taxes on a home valued at $375,000, the city’s median home price.

Money-saving Tips for Chicago Metropolitan residents

Whoa, you’ve come this far! Now that you know how much it takes to live in the Chicago Metropolitan area, let me share with you some tips on saving money here:

• Get a realtor: Hire a real estate agent to help you find good deals on apartments and negotiate for you. As a buyer and tenant, you do not pay the commission when using an agent. 
• Switch to energy-efficient appliances: Change your lights to LED or CFL bulbs. Use timers and power strips. Switch to a smart thermostat.
• Shop around for your utilities: With so many different providers in Chicago, you can do price comparisons on internet, cable, and phone services before deciding which best suits your needs.
• Walk or Bike: For shorter distance trips, choose to walk or bike as much as possible. You not only break free from commuting costs but also get a great workout on your way. 
• Sign up for discounted parking: With a discounted parking service, you can look up and book your parking in advance at less cost than conventional parking. 
• Commute through the river: For a scenic view, take the water taxi.
• Take advantage of free entertainment: Go to the historic Chicago Cultural Center and Pek district for year-round free programs.