What is Cost of Living?
Cost of living is the amount of money a person needs to be able to sustain a certain standard of living. Usually, this type of information is handy for those who are planning to move to a new location, comparing the cost of living in their current city, state, or country with that of the place that is being considered for the relocation. There is no single source for determining the cost of living of any particular place. Instead, various reliable agencies provide the statistics which are a result of rigorous study of the prices of a representative sample of goods and services, taking into account the significance of each item to a typical household’s annual budget.
If you would like to move to a new area, you would benefit from checking the cost of living of that place and compare this with your current place of residence. This way, you can see whether you would be able to afford your current lifestyle once you move to that location or not. As you compare the cost of living between your current location to your next potential home, you will notice that the all values of the basic expenses under the primary location are fixed at 100, while the values for the other location/s being compared to this are either higher or lower than 100. This reflects whether the cost of the basic expenses being compared with the primary location are more expensive or cheaper with the other location/s.
2019 Cost of Living Index in Honolulu, HI
Hawaii is such an amazing place to live in, but living in this paradise does come at a great price. In fact, according to the Missouri Economic Research and Information Center, the cost of living in Hawaii is the highest among all of the nation’s 50 states. But don’t let this report keep you from considering moving to this lovely state. As long as you do your research, you can rest assured that you are able to make an informed decision eventually.
If you are considering moving to Honolulu, Hawaii, the first thing you need to do is check if living in the state’s capital and largest city would be practical for you, finance-wise. To help you assess the viability of this option, we have prepared the cost of living table below, which shows you a snapshot of the basic expenses in Honolulu, as well as the ones for the state of Hawaii and the whole of the United States. In this table, the primary location is the United States, so all of the values under this are fixed at 100, while the values under Honolulu and the state of Hawaii would be higher or lower than 100, based on the actual values of the basic expenses in these areas.
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Based on the cost of living table shown above, you can see that the overall cost of living index in Honolulu is double of that of the entire nation, at 201.1. This means that people living in this city pay 101.1% more for basic expenses compared to the rest of the country. Looking at each of the basic expenses on this table, you will notice that the highest expense is housing, at 358.4, followed by utilities, at 176.3.
Honolulu Housing Costs
The median home sale price in Honolulu, Hawaii is $661,200, and home values have declined 0.6% over the past year. So, if you are in the market to buy a new home once you move to Honolulu, this is great news for you. The median list price per square foot in this state capital is $698, with $645,000 as the median price of homes currently listed and $581,100 as the median price of homes that are sold. If you prefer to rent in the meantime, the median monthly rent in Honolulu is $2,300.
Utility Costs in Honolulu, HI
As you can see from the Cost of Living table, the cost of utilities in Honolulu is quite high, at 76.3% higher than the national average. The Aloha State residents, in particular, pay the highest monthly energy bills in the nation. According to a 2017 study by the U.S. Energy Information Administration (EIA), the average energy bill in Hawaii is around $149.33 per month, $38 higher compared to the $111.67 national average. In Honolulu, the cost of basic electricity, heating, cooling, water, and garbage for an 85 square meter apartment ranges from $117 to $381.22.
Average Food and Grocery Prices in Honolulu, HI
Since most of the food products being sold in Hawaii come from the mainland, prices are a bit steep. In fact, Hawaii’s groceries are by far the most expensive in the nation. A bottle of milk, for example, would normally cost around $.82 on average on a national level, but in Honolulu, the average price is $1.63. A dozen tray of eggs costs $4.22 in this city, almost double the national average which is $2.27. The cost of dining out is also higher in Honolulu, but the variance is not as much as the prices of grocery items. A bill for a meal at an inexpensive restaurant in this location is usually around $15, just $1 more than the national average; and a three-course meal for two at a mid-range restaurant costs roughly $65, $15 more than the national average.
Transportation Costs in Honolulu, HI
Bus service is the only public transportation available in the Hawaiian islands. A one-way ride for Oahu’s public buses is priced at $2.75, a one-month pass is at $70, and an annual pass goes for $770. The island of Hawaii, also known as the “Big Island”, has bus service via the Hele-On Bus, which you can get a monthly pass for $60. If you prefer to go around driving your own car, expect to pay above average prices for gas. According to GasBuddy, the average price of a gallon of gas as of May 2019 is $3.62, while the national average is $2.92.
While generally the cost of most of basic expenses in Honolulu are higher than the national averages, there’s good news for Hawaii residents when it comes to taxes. Hawaii property tax rates are some of the lowest in the country. The average effective property tax rate in the state is only 0.27%. Income tax rates range from 1.4% to 11%. In Hawaii, Social Security retirement benefits and public pension income are exempt from state taxes. However, income from private pensions and retirement savings accounts are fully taxed. The state also has an estate tax.
Moving to Honolulu, Hawaii
If you are planning to move to Honolulu, Hawaii, the cost of living information we have provided in this article can help you make an informed decision. And, if you are considering purchasing a home in the wonderful city of Honolulu, I can show you the best options available for you so you can prepare for your home purchase as well. Feel free to give me a call at 808-278-0285 or send me an email at email@example.com.