Ever wondered how much your life costs? According to the U.S. cost of living index, from the tip of your pencil to the vehicle for your travel, you spend around $61,334 a year. Surprisingly enough, the minute costs per day add up to this figure. Several reasons can be given for this like inflation, shortage of resources, etc. Let’s Know Why Is Life So Expensive.
Your estimated expenditure in the upcoming years can grow many folds this figure, considering the depletion of resources happening at a startling rate. The principle of ‘survival of the fittest’ argued that it does not apply to humans, is becoming prevalent and would rule in such high costs of living.
Costs which Constitute Our Life
Now, the next question arises, what exactly are the costs we are referring to here? The below costs constitute your day-to-day life:
1. Accommodation Costs: Even if you live in your own house, the imputed or estimated value of its rent is a part of your cost. This happens because a lump sum amount is paid for a house. And per year costs are imputed in the cost of living. Other than a house, the rent costs form a substantial part of your monthly and yearly expenditure. Numerically, an average American pays a rent of around $1300-$2000 a month. Thus, the living space you enjoy perhaps has a huge load on your or your parents’ budget.
2. Electricity: The T.V. you watch, the A.C. in your house and other appliances come at initial as well as monthly electricity-based costs which cost 13-15 cents per kilowatt-hour in the US. So, in summers it can go as high as 100$ monthly while in winters it might be lower.
3. Groceries: Your lunch, dinner, and breakfast are guided by what is available in your fridge which is in turn dependent on what is available in your nearby grocery stores. These contribute to your costs as well. According to the Bureau of Labor Statistics, the average American spends around $412 on groceries per month. So, groceries also add substantial costs to your life, making them more expensive.
4. Transport: According to statistics, the US is one of the highest spenders on transportation in the world. It shows that 10-15% of a person’s budget is consumed by transportation expenditure, which seems high. Thus, only for going to work, school, or college, you spend 10-15% of your income, and your cost of living increases through bus fares or fuel for owned vehicles.
5. Leisure Activities: Americans do a plethora of leisure activities to keep up their morale and enjoy like golf, movies, restaurant meals, shows, operas, etc. All these on an average cost around $243 monthly. Thus, even your pleasure has a cost.
What Are The Factors For Such High Costs?
The above figures seem quite high and prompt a genuine question- what all factors lead to them and will they increase further?
Many factors make your life expensive. Firstly, the scarcity of resources gives each good its value or price. Since everyone cannot be provided with everything, prices act as barriers to restrict them to those who can buy. Thus, scarcity plays a big role in setting living costs.
Moreover, the scarcity further leads to another phenomenon called inflation, or a rise in the prices in the economy. This happens per year and is one of the most challenging issues for the government and the economy. Inflation was around 2.3% in the U.S. yearly, meaning that on average you would pay 2% more price for a commodity bought next year than in the current year.
Lastly, the employment opportunities are reducing. This is happening due to high competition and cost-cutting in the factories. This reduces the purchasing power or buying capacity of individuals, making their life more expensive.
Conclusion
Thus, the life you enjoy is indeed very costly and its value is undervalued by many. It is further rising every year d a time can come when your life would cost 10 times as much as now. So, there is a need to adopt the strategy of sustainable development, which refers to saving resources for the future as well as the present. This would enhance the costs of the present as well as the future.
FAQS
Q1. What is purchasing power?
It refers to the number of goods your income will buy at the current prices.
Q2. What are the costs of the life of low-income groups?
Even low income groups are not free from the costs of living. On average, low-income groups spend $1000 a year to sustain themselves. So, we can say that the ‘cost of life spares none’.
Q3. Why is sustainable development not fully implemented?
Sustainable development is not as easy as it sounds. It involves the imposition of lots of restrictions and rationing of resources by the government which is generally a difficult task.
