The cost of living in Alaska, as many people know, is relatively higher than the cost of living of other states.
Fortunately, there is a multitude of jobs being offered in Alaska, and these opportunities are high paying. Obtaining a position in one of these decently paying Alaskan jobs make looking at Alaska on the cost of living index a bit more bearable.
To find out exactly what the estimated cost of living is for Alaska, it is easy to look online to find the cost of living by state and see where Alaska ranks among the other areas of the United States and even around the world.
Additionally, planning for your Alaskan trip or Alaskan move is made easy with helpful online tools such as a cost of living comparison and the cost of living calculator. These tools are extremely useful when predicting how much you should be expecting to spend on a monthly basis.
According to US News.com, a site that offers a cost living by state index, Alaska is ranked as the 46th most expensive state to live in out of all 50 states of the US, with Hawaii being the most costly.
However, there are a lot of aspects that go into determining the cost of living in any state, town, or city, and for each family and individual it will vary. There are several things you can do to bring down these monthly expenses by putting some simple tips into practice and simply knowing where the best living locations are.
So, are you ready to see what determines the living expenses of a state, and how you can change them to meet your personal needs and wants?
What Really is a “Cost of Living”?
When someone refers to the cost of living of a state or country, what are they actually referring to?
By definition, a cost of living is “a level of prices relating to a range of everyday items.” This includes food, bills, housing or rent, clothing, gas, and everything in between that you spend money on things you use on a daily basis, such as electricity and food.
According to Best Places.Net, housing by far has the most influence and is the biggest influencing factor on the Alaskan cost of living.
A US average of 100 indicates that any state whose index falls below 100 is one of the cheapest states, and any state whose index is above is one of the most expensive states. According to Best Places.net, Alaska’s cost of living index is 131.80. That’s over 31 above the average American state’s cost of living average.
Determinants of Alaska’s Cost of Living
Housing and rent play the largest role in determining Alaska’s cost of living. However, grocery bills, electricity, gas, and fast food also have strong determining price factors.
In Anchorage and Fairbanks, it is said to cost approximately $122 per week to feed a typical, average sized family of four.
However, it is important to keep in mind that these cities are very well populated cities. The more rural and less populated places of Alaska are going to have a much greater price on everything from housing to groceries to clothing.
The good thing is, though, that the taxes in Alaska are lower than the average US state’s taxes. Additionally, living in Anchorage or Fairbanks is also cheaper than cities such as San Francisco, Honolulu, and Manhattan.
Alaska is the only state in the United States that doesn’t collect a state tax or income tax (with the exception of a few smaller cities and jurisdictions), meaning that you own more of what you earn. Instead of relying on the people to pay taxes for the government’s expenses and financial responsibilities, Alaska relies more heavily revenues from petroleum.
The Permanent Fund Dividend
Although Alaska is known for its higher living expenses, what is often overlooked in the beginning thoughts of moving to Alaska is the permanent fund dividend.
This is a dividend offered yearly to people from other parts of the United States who have claimed residency in Alaska and who have been residents for a full calendar year. This means that if you arrived in Alaska on or before December 31, and you have remained there until January 1 of the following year, then you are eligible for the permanent fund dividend.
The dividend is there to offer help with these living expenses to people who plan to obtain residency in Alaska for an indefinite amount of time.
The permanent fund dividend is especially helpful for military families who have been stationed in Alaska with little idea of when they are free to return to their previous state of residency.
And these payments are good. In 2008, each current resident eligible for the permanent fund dividend received a total payment of $2,069.
Even though Alaska is said to be one of the most costly states to live in, after receiving help with this dividend and subtracting your typical tax withdrawals, you will find that it isn’t as compromising as you originally thought.
Feature image via The Adventures of Lil Nicki