Is Denver Cheap to Live? Breaking Down the Cost of Living

The cost of living in Denver is a key consideration for individuals and families contemplating a move to the city. Understanding its financial landscape is important for budgeting and planning. This article examines various expenses, income levels, and personal choices that determine the actual cost of living in Denver.

Understanding Denver’s Cost of Living

Denver’s overall cost of living is notably higher than the national average, with its index approximately 9% above the U.S. average. This indicates that goods and services are more expensive than in many other parts of the country. While housing costs contribute significantly to this elevated index, other categories also factor into the equation. Rent costs in Denver are about 20% higher than the national median. However, some expenses like utilities are comparatively lower, at approximately 11% less than the national average.

Breakdown of Major Expenses

Housing represents the largest portion of expenses for many Denver residents. The median rent across all apartment sizes in Denver was approximately $1,688 as of August 2025. A one-bedroom apartment typically ranges from $1,494 to $1,776 per month, while a two-bedroom apartment can cost between $1,861 and $2,343 monthly. For those looking to purchase property, the median single-family home price in mid-2025 was around $580,000, with condos closer to $420,000.

Transportation costs also contribute to the overall budget. Gasoline prices in Denver hovered around $3.80 per gallon in mid-2025. Car insurance premiums in the city can vary significantly, with annual costs ranging from approximately $2,400 to $3,710. Overall transportation expenses in Denver are about 4.1% lower than the national average.

A single adult can expect to spend between $400 and $500 monthly on groceries. Dining at an affordable restaurant typically costs around $20 for a meal, while a mid-range restaurant meal for two might be about $80.

Utility costs in Denver are generally lower than the national average, estimated at about 11% less. For a two-bedroom residence, typical monthly utility bills, including electricity, gas, water, and internet, range from $150 to $180. Healthcare expenses are an additional consideration, though specific average premiums or costs vary widely depending on individual coverage and needs.

State and local taxes also impact the cost of living. Colorado has a flat individual income tax rate of 4.40%. Denver’s combined sales tax rate is 9.15%, which includes the 2.90% state tax, a 5.15% city tax, and an additional 1.10% in special taxes. Property taxes in Colorado are comparatively low, with an effective rate of 0.45% on owner-occupied housing value.

Income and Affordability Considerations

Income levels in Denver play a crucial role in determining affordability. The average annual salary in Denver ranges from approximately $68,072 to $72,693. The median household income in Denver was $91,681 in 2023.

To live comfortably in Colorado, a single adult would need an annual salary of at least $105,955, based on the 50/30/20 budgeting rule, which allocates 50% to necessities, 30% to discretionary spending, and 20% to savings or debt repayment.

For a family of four, the income needed to live comfortably is significantly higher, at $273,728 annually. While Denver’s median household income is higher than the national average, it remains below the income recommended for a comfortable lifestyle for a single adult.

The concept of a “living wage” provides another perspective on affordability. For a single individual in Denver, the living wage is estimated to be $12.95 per hour. However, for a household with two adults and two children, the required hourly living wage for each working adult rises to $28.00. These figures highlight the financial demands of supporting a family in the city.

Lifestyle and Personal Spending Impact

Individual lifestyle choices significantly influence the actual cost of living in Denver. The choice of neighborhood, for instance, directly affects housing expenses, with areas closer to downtown or tech corridors typically having higher rents and home prices compared to suburbs. Opting for shared housing or smaller apartments can help reduce accommodation costs.

Transportation habits also create financial variations. Relying on Denver’s public transit system can mitigate the need for car ownership expenses, such as fuel, insurance, and maintenance. Owning multiple vehicles or commuting long distances will increase transportation costs.

Dining habits substantially impact the monthly budget. Cooking at home and purchasing groceries, which average $400–$500 per month for one adult, is generally more economical than frequently dining out, where a single meal can cost around $20. Engaging in free or low-cost recreational activities, such as exploring Denver’s parks or hiking trails, can reduce entertainment spending compared to frequent paid events or attractions. Similarly, making mindful shopping choices by opting for discount retailers over premium ones can lead to further savings.