Colorado Cost of Living Guide: Insights for 2024

How Expensive Is It to Live in Colorado?

If you're thinking about moving to Colorado, understanding the state's cost of living is essential. With living expenses that are roughly 7% above the national average, Colorado presents a varied financial landscape, with expenses fluctuating significantly from city to city. For example, the cost of living in Durango will be different than Denver. However, learning about everyday expenses at the state level can help you budget for buying your dream home, regardless of which city you choose. Here’s everything you need to know about the cost of living in Colorado—from housing and utilities to food and transportation.

CO Living Expenses at a Glance

  • The average cost of living in Colorado ($53,374 per year) is about 7% higher than the national average, with significant disparities depending on the city, and strategic planning is essential to manage expenses in the state.
  • Housing is a major expense in Colorado’s cost of living, whereas utility costs are 11% lower than national averages. Other costs, such as food, transportation, and healthcare also vary widely within the state.
  • Key factors affecting Colorado’s cost of living include a dynamic job market with a tight labor ratio, a slowing population growth rate with an anticipated rebound, and the state’s focus on developing under-developed areas to balance the cost of living with lifestyle quality.

Understanding the Cost of Living in Colorado

Is Colorado an Expensive State to Live In?

The average Colorado cost of living per year stands at approximately $53,374, which is about 7% higher than the average U.S. city. This cost varies across the state, ranging from 4% lower to 14% higher than the average U.S. city. So, depending on where you choose to live, your living expenses can differ significantly when living in Colorado.

Unquestionably, Colorado’s affordability hinges on the location. Living in a vibrant city like Denver often comes with a heftier price tag compared to the relatively remote towns near Durango. Consequently, strategic financial planning can aid in navigating the cost of living in different regions of the state.

The cost of living in Colorado encompasses various expense categories:

  • Housing
  • Utilities
  • Food
  • Transportation
  • Healthcare
  • Child Care
  • Taxes

All these elements shape the overall living cost in the state. It’s worth examining each of these elements in more detail.

Housing Expenses in Colorado

Housing costs form a significant chunk of the cost of living in Colorado. Housing costs vary wildly across the state. For example, homes for sale in Durango typically range in price from $200,000 to $800,000, with some outliers on both sides. However, in Boulder, which is one of the most expensive cities in Colorado, houses typically range from the $500s all the way up to $6 million.

Rental costs also play a big role, especially for those not ready to buy a home yet. The average rent in Colorado is $1,994 per month. These figures highlight the considerable regional disparities in home prices, with home prices varying across cities and even neighborhoods.

Housing costs in Colorado are influenced by:

  • The real estate market’s health
  • A low property tax rate
  • Potential for future investment
  • Varying factors such as loan type and homeowners insurance.

Utility Expenses

When it comes to utility costs, Colorado residents typically pay less than people living in other states. The average utility cost in Colorado is 9% lower than national averages. Residents pay on average $331 per month for utilities such as:

  • Water
  • Electricity
  • Gas
  • Cable/Internet

The cost of electricity in Denver, Colorado, has decreased by approximately 3.686% from the previous year. However, Denver’s notably cold climate, with an average of 157 days below freezing, leads to higher heating expenses for its residents. Prices are subject to change, depending on which utility providers homeowners use.

In terms of internet, the national average cost for the service is reflected in Colorado’s average monthly cost of $70, ensuring residents have access to affordable connectivity.

Food and Grocery Spending

Food and grocery costs are another aspect to consider when calculating the cost of living in Colorado. On average, individuals spend about $316 per month on food, while a family of four would spend around $1,366.

However, these costs can vary significantly across different cities. For instance, grocery costs in Westminster are 11% below the average, while in Grand Junction, they are 11% above the average. Hence, your choice of city can greatly influence your grocery cost.

Transportation Expenditures

Transportation is another significant component of living costs in Colorado. A single adult with no children can expect transportation costs to range from $5,316 annually, while two working adults with three children could spend up to $15,073.

Colorado residents spend approximately 11% more on transportation-related costs compared to the national average. Denver residents tend to spend more on transportation compared to other cities in Colorado. Pueblo residents spend closer to the national average on transportation.

Residents can also use public transportation. Monthly passes cost around $88 in Denver, whereas the same pass costs $30 per month for public transportation in Durango. Nonetheless, owning a car becomes a necessity for residents in areas outside downtown Denver, underscoring the significance of vehicle ownership in Colorado.

Healthcare Affordability

Healthcare is a major consideration for anyone contemplating a move to a new state. On average, healthcare costs in Colorado amount to $7,364 per person annually.

Health insurance premiums in Colorado’s individual market have seen an increase by an average of 10.4% in 2023 compared to 2022. Yet, those participating in Connect for Health Colorado’s marketplace may face modest increases in net premiums or even decreases due to the American Rescue Plan Act and the Inflation Reduction Act, especially in Western Colorado.

In Colorado, the average monthly cost of medical insurance for an individual is $369. This reflects the current pricing trend in the state. However, healthcare costs may vary depending on the individual’s coverage and healthcare needs. Significantly, Colorado businesses are recognized for providing robust healthcare benefits to their employees, which can enhance the overall affordability of healthcare within the state.

Cost of Child Care

For those with children, child care can be a substantial portion of a family's budget. On average, families in Colorado can expect to spend several thousand dollars annually per child.

For full-time daycare for a toddler, parents in Denver typically pay around $1,600 per month, though costs can rise to nearly $2,500. For infant care, this average cost rises from just over $1,700 to nearly $2,900 per month. Preschooler daycare typically costs around $1,435 on average, up to nearly $2,500.

This financial burden can influence a family's housing decisions, prompting some to prioritize affordability or proximity to family members who can provide support. Additionally, the availability of quality childcare facilities can be a decisive factor in choosing where to live within the state, making it a critical consideration in the overall assessment of living costs in Colorado.

Tax Implications

Taxation is another important factor influencing the overall cost of living. Colorado has a flat income tax rate of 4.40%. The base sales tax in Colorado is set at 2.9%, with a combined average sales tax rate of approximately 7.77% when local taxes are included. This suggests that your purchase-related taxes can fluctuate based on local tax rates in your vicinity.

Property tax rates average 0.6 percent. This is another cost that homeowners need to factor into their annual expenses.

Key Factors Affecting Colorado's Cost of Living

Apart from these direct living expenses, multiple key factors influence the cost of living in Colorado. Firstly, the job market in Colorado is quite dynamic. In June 2023, the state had 190,000 job openings, with an above-average job openings rate of 6.1%, and an unemployment rate of 2.9 percent. This indicates a tighter labor market than the national ratio.

Population growth is another factor. Colorado’s population growth rate has fallen to about 0.5%, which is a significant slowdown from the 2.5% rate experienced in the 1990s. However, state demographers anticipate a rebound in Colorado’s population growth, expecting the growth rate to potentially exceed 1% by mid-decade.

Lastly, the state’s economic health hinges on its ability to:

  • Attract and retain a work-ready population
  • Address the needs of an aging demographic
  • Develop under-developed areas to offer more cost-effective living options and potential investment opportunities

Comparing Colorado Cities: Cost of Living Breakdown

Which Colorado Cities Are Affordable?

Upon comparing the living costs across various Colorado cities, notable disparities come to light. Denver and Boulder are more expensive than Colorado Springs and Pueblo, which is considered the most affordable major city. For instance, to maintain a similar standard of living, someone moving from Boulder to Denver would need to earn a salary of $52,535 in Denver, where employers typically pay 0.9% less than those in Boulder.

Northern Colorado cities, including Fort Collins, are known for their vibrant downtown areas and an array of outdoor attractions, including Rocky Mountain National Park. These towns offer residents a blend of small-town charm and urban amenities. This blend ensures a quality lifestyle while also maintaining relative affordability.

The Colorado Lifestyle Fits Any Budget

While the cost of living in Colorado is higher than the national average, the state offers a unique blend of lifestyle benefits that make it an attractive destination for many. From the breathtaking scenery of La Plata County to the bustling city life of Denver and Boulder, Colorado has something to offer everyone.

However, it’s crucial to understand the various components of living expenses and consider the key factors such as the job market, population growth, and economic health before making a decision. By doing so, you can make an informed choice about whether Colorado is the right fit for your lifestyle and financial goals.

Frequently Asked Questions

Is Colorado expensive to live in?

Colorado has a higher cost of living compared to the national average, with housing costs being particularly steep at 20% higher than the national average. Utilities, however, are 9% lower.

Where does Colorado rank in cost of living?

Colorado ranks 35th in the cost of living, with an annual average cost of living of $53,374.

What are the tax rates in Colorado?

In Colorado, the tax rates include a flat income tax rate of 4.40%, a base sales tax rate of 2.9%, and an average property tax rate of 0.6%.

If you're ready to move to Colorado, call Colorado Property Group of RE/MAX with Durango Homes for Sale at (970) 946-0601 to reach a local real estate agent who can help you find your dream home.

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