These 5 Cities Are the Most Expensive in November 2022

Do you live in any of these five urban areas?

The latest cost of living data is out and it shows that life in Manhattan costs almost double what people pay elsewhere. In contrast, it costs almost 25% less than the average to live in Harlingen, Texas. Living costs have been rising across the country as a result of inflation, but some Americans suffer more than others.

C2ER, also known as The Council for Economic Research, analyzes prices for goods and services in 265 different urban areas. It factors in housing, groceries, utilities, transport, health care, and other costs. Given that prices can vary considerably even within a single city, the study tracks "urban areas" -- which is why New York City appears twice on the list.

The five most expensive urban areas in the U.S. right now

According to C2ER's Q3 cost of living index, it costs considerably more to live in the following five places. Salaries may also be higher, but in many places the higher salaries don't cover the discrepancies in living costs.

1. New York (Manhattan), New York

Manhattan tops the list with a cost of living (COL) of 237 compared to the national average of 100 -- more than double. One issue is rent and house prices, where high demand and limited living space push costs sky high. New York City is also home to over 100 billionaires, and the state ranks highly for average salaries. 

2. Honolulu, Hawaii

Honolulu scores 186 on the cost of living index, meaning the living costs are 86% higher than the baseline of 100. That doesn't include state taxes, which are some of the highest in the country. Housing is a big factor, as is the cost of shipping goods to Hawaii. According to the C2ER research, Honolulu is also the second most expensive place to buy groceries in the U.S.

3. San Francisco, California

With a score of 183, San Francisco is only a few points off Honolulu on the index. Above average rents and house prices are a big factor, though the temperate climate means San Franciscans can often save on utility costs. Silicon Valley contributes to both higher salaries and high living costs. 

4. New York (Brooklyn), New York

The second entry from New York City, Brooklyn scores 170. Like Manhattan, high rents have a big impact on living costs. Groceries can also be costly -- Brooklyn is also the fourth-most expensive place to do your monthly shopping. As with other locations on this list, it's also a popular tourist destination which has an impact on prices.

5. Orange County, California

Last quarter Orange County ranked in eighth place on the index, but it's now pushed its way into the top five. The COL in Orange County is 155, meaning living costs are 55% higher than the average American. House prices, high rents, and high salaries all contribute to Orange County's high costs. California is also one of the most expensive states to buy gas. 

How to reduce your cost of living

Spiraling living costs have hit people's bank balances this year, no matter where they live. A number of Americans have dipped into their savings accounts to cover essentials, and others have had to take on debt. While understandable, this is not sustainable -- particularly with a potential recession looming.

If you haven't already done so, use a budgeting app or pen and paper to take a close look at where your money goes. It can be a painful exercise, but an enlightening one. Are there any easy wins such as subscriptions you can cut or small luxuries you won't miss that much? Might you be able to shave some of your grocery costs by making a no-waste commitment or switching to store brands?

As the research above shows, one more drastic option to reduce your costs is to move to a cheaper area. For example, if you work in New York City, you don't need to live in Manhattan. Indeed, if you're able to move out further afield there are several cities in New York state with a lower cost of living. Moving entails its own expenses and won't be for everyone, but if housing is eating up an unreasonably big chunk of your money, it is worth considering.

You may feel that you've already cut every inch of fat from your budget. If you're still spending more than you earn, are there ways you can increase your income? Perhaps you can bring in some extra cash by selling things you no longer need. Or maybe you have time to take on a side hustle while the job market is strong. There are no easy answers, but if you can reduce your costs or increase your income, it will make it easier to handle the continuing cost of inflation.