Thinking of moving to Chicago? You’re in good company. Over the past few years, Chicago has become a popular destination for people who want the big city lifestyle without a sky-high price tag. In fact, Chicago’s cost of living consistently ranks much lower than other major metropolitan areas in the U.S., such as New York and Los Angeles. If you’re wondering how much it might cost you to live in Chicago, this is a great place to start.
You’ve probably heard that you should never spend more than 30% of your monthly income on housing. However, residents of extremely high-cost cities might laugh at this rule; for example, in New York, it’s common to spend up to twice this just for average accommodations. How does Chicago measure up? Let’s take a look.
According to Zumper, Chicago’s rent prices are currently 16th highest in the nation. Average monthly rent cost is about $1,520 for a 1-bedroom and $1,860 for a 2-bedroom. Blueground, a furnished apartment provider across the US, prices their serviced studios from $2,100 and 1-bedroom apartments from $2,290. However, CNBC reported that these numbers are actually on the decline, partially due to new units becoming available and alleviating demand. To find a better deal, look in safe but inexpensive neighborhoods like Irving Park and Pilsen, where you can find a decent apartment for half what one might cost in pricier downtown areas. Whatever you do, don’t forget to budget for renter’s insurance!
The median price to buy a home in the city of Chicago is $299,000, making it the 2nd most affordable of the 20 largest U.S. cities, according to Crain’s. However, don’t get your hopes up too soon. While its home prices are relatively low, Chicago’s property taxes are among the highest in the nation. Keep reading to learn more.
If you’re planning on living in a one-bedroom home in Chicago, you should budget about $120 per month for utilities, which is on par with the national average. A basic internet and cable package starts at around $50 per month. Trying to save money by cutting your cable? Keep in mind that Chicago charges a 9% tax on streaming services such as Netflix.
If Chicago’s cost of living has you concerned so far, food is one area you won’t need to worry about. Grocery prices in Chicago are fairly inexpensive for a major city, partially due to the presence of discount retailers such as Aldi. A single person can easily eat a healthy, well-balanced diet for $300 per month, even less if you’re frugal. A meal out at an average restaurant might run you $20. However, keep in mind that Chicago charges a base 2.5% tax on groceries and additional taxes might apply to items such as soft drinks. See the section on Taxes in Chicago below for more information.
Chicago is a very commutable city, so no matter where you decide to live, you’ll have plenty of options to get where you need to go every day. From trains and buses to bikes and boats, here are all the options.
Chicago’s train and bus network, called the CTA, uses a flat-rate fare system: $2.50 for a single train ticket or $2.25 if you’re taking the bus. An unlimited month pass is only $105, which is about 10% cheaper than in New York or Boston. If you’re a student, you’ll get an even better deal when you pay only $0.75 per trip.
With cheap public transportation as an option, many Chicago residents choose not to own a car. If you do decide to go this route, be prepared for a few additional costs. Registration will be at least $100, plus $88 for the Chicago City Sticker. Parking is in high demand, so get ready to spend between $100 and $300 per month for a private spot depending on the neighborhood.
Of course, you could always rely on free street parking. This has its own set of drawbacks, however. You’ll need to move your car frequently for street cleaning, which happens once a week during warmer months. Winter brings a whole new set of parking challenges as residents battle it out over the spots they work so hard to shovel snow from.
Believe it or not, biking is a fairly popular form of transportation in Chicago, with over 200 miles of bike lanes throughout the city and more than enough bike shops to keep everyone tuned up. Divvy, Chicago’s bike sharing program, will only set you back $99 per year. Just make sure to wear a helmet.
Yes, commuting by water taxi is totally an option in Chicago! It might not be practical for everyone, and service stops running during the coldest months. However, an unlimited month pass is only $60, which is significantly cheaper than the CTA.
While the cost of living in Chicago is relatively low compared to other major U.S. cities, taxes are one area you won’t get a break. In fact, some lists have Chicago as the most taxed city in America.
One area where Chicago does not impose additional taxes is on its residents’ income. The city currently follows Illinois’ flat income tax rate of 4.95%. However, this may change soon, as state legislators are considering switching over to a graduated income tax.
Sales tax in Chicago is 10.25%, among the highest in the nation. For comparison, New York’s sales tax is 8.875%, and in Los Angeles, it’s 9.50%.
Chicago’s property taxes are in the top 10% of the U.S. The average tax rate is 2.1%, with rates increasing every year. Taxes might be even higher if you own a home in the north suburbs, specifically Lake County or DuPage County, where tax bills rival those in New York and San Francisco.
Chicago has fairly high income, sales, and property taxes, but what might surprise you even more, is the additional taxes on seemingly random items from Netflix to plastic bags. While these taxes are small, they certainly add up and contribute to the cost of living in Chicago. Here’s a list to take into consideration:
Although Chicago’s tax rates are fairly high, overall you’ll probably find yourself with a much lower cost of living compared to other major U.S. cities. If you’re still not sure what kind of expenses to plan for, try renting a furnished apartment through a service like Blueground. By using upfront price, any guesswork is taken out of living costs so you can more accurately budget your finances. Their apartments come with furniture, housewares and decor provided and utilities are charged based on a monthly estimate.