How to Calculate Your Personal Cost of Living

Update: 2025-09-12

Description

You track your steps. Maybe even your calories. But do you know what it really costs to live each month?

Your personal cost of living is one of the most important numbers in your financial life. Without it, you may be spending in ways that don’t reflect your values—or your faith. Let’s explore why this number matters, how to calculate it, and how it ties into faithful stewardship.

The Basics of Stewardship

No matter your income level or stage of life, the same principles apply. There are five things you can do with money:

Earn it
Live on it
Give it away
Owe it to others
Grow it through saving and investing

Today, we’re focusing on “living on it”—what it really takes to cover your day-to-day needs. And remember: it’s not just rent and groceries. A true cost of living includes less frequent expenses too—insurance premiums, car repairs, or even Christmas gifts.

Why Tracking Matters

Inflation may be slowing, but most of us are still paying more than before. The government reports a national “cost of living,” but that number doesn’t reflect your personal circumstances. That’s why tracking your own cost of living is crucial—it provides clarity, and clarity is the foundation of stewardship.

A practical tool for this is the FaithFi app, which helps you track your income, giving, saving, and spending—all in one place. Here’s where to start:

1. Begin with Giving

For believers, giving isn’t just another line item. It’s the first priority—an act of worship and trust in God’s provision.

2. Add Savings Goals

Whether building an emergency fund, saving for retirement, or preparing for a large expense, set targets you can track monthly.

3. List Your Expenses

Expenses fall into three categories:

Fixed: Rent, mortgage, insurance, subscriptions.
Variable: Groceries, gas, utilities.
Irregular: Property taxes, holiday gifts, car repairs. Spread these out by assigning a monthly average.

When you add it all up, you’ll have a clear picture of your total monthly needs—your true cost of living.

If your expenses exceed your income, don’t panic. The process reveals problem areas so you can adjust—cutting back on non-essentials, reevaluating fixed costs, or pausing discretionary spending. Stewardship isn’t about guilt—it’s about faithfulness.

Proverbs 27:23 –24 says, “Know well the condition of your flocks, and give attention to your herds, for riches do not last forever.” In modern terms: know your financial condition and manage it wisely.

Living With Clarity and Faith

Tracking your cost of living isn’t just a budgeting exercise. It’s about living intentionally, aligning every dollar with God’s purposes. Needs will shift, life will happen, but clarity allows you to walk with confidence, generosity, and purpose.

That’s why I encourage you to download the FaithFi app today. With FaithFi Pro, you’ll gain access to tools, articles, Bible studies, and daily encouragement to help you manage money with wisdom. Find it at FaithFi.com or in your app store.

So, do you know your personal cost of living? If not, there’s no better time to find out.

On Today’s Program, Rob Answers Listener Questions:

I’m 67 and single. Should I start taking Social Security now, or wait until age 70 for the larger benefit? I’m also worried about whether Social Security will even be around in the future. On top of that, I worked many years for a nonprofit that provided housing, so my reported income was low. Now I’m earning more—will that help increase my Social Security amount?
I’m retired and already drawing Social Security, but I also have earned income from pastoring two rural churches. With that income, am I allowed to contribute to a Roth IRA or another type of retirement account?
My husband and I don’t have much debt besides our mortgage and a 0% interest loan we used for a heat pump. Should we pay off the heat pump early, add more to our emergency fund, or focus on paying down the mortgage?
My online savings account was compromised, and someone tried to transfer money out. What steps can I take to protect myself when using online accounts? And do you recommend using a password keeper?

Resources Mentioned:

Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network and American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community and give as we expand our outreach.