Is Austin the Most Expensive City to Raise a Family???

The local press is buzzing with news that Austin has become the most expensive city in the U.S. to raise a family. The news stories all cite a recent blog post on the Mint.com website, which refers to something called the Intuit Spending Index (Intuit, Inc., owns Mint.com). The blog post reports that Austin is the most expensive city to run a household, looking at consumer spending on education, groceries, and various household expenses. In addition to Austin, the other cities that made the top 5 list are:

• San Francisco
• Nashville
• Seattle
• Portland

Really? Is Austin the most expensive city to raise a family???  More than New York, Los Angeles, and Boston? No way.

I was unable to find much on the Intuit Spending Index and underlying methodology for developing the index, but what I was able to find does not support the press buzz. The Intuit Spending index is based on data provided by Mint.com users, who hardly seem representative of the average American family. (The Mint.com blog post does state that the data "has been analyzed and normalized to create a statistically relevant view that better represents the average American household"). The list also leaves out cities with populations of less than 500,000 and does not take into account housing costs.

Just as troubling is Mint.com's and the media's attempt to take how much households are spending on "running a household" and directly correlate that with how expensive a city is. The fact that the average household in Austin may be spending more than households in other cities on certain goods and services could be related more to the fact that households here are choosing to buy more household goods and services rather than to the relative cost of those items. Maybe Mint.com does not believe in its findings either, because another recent Mint.com blog post on the 7 most expensive cities in the U.S. does not include Austin. The blog post goes on to state that Austin is a cheap place to live.

Now, I also don't agree with any claims that Austin is a cheap place to live, especially not with our rising housing and utility costs. In other words, Austin is not the most expensive place to raise a family but also not the cheapest. I would bet that more reliable estimates would place Austin closer to the middle when comparing the costs in cities of raising a family. In the Cost of Living Index published by the Council for Community and Economic Research, for example, Austin ranks right below the national average when it comes to the cost of consumer goods and services for households.