The cost of living is the amount of money that a person needs to live. The amount of money that people need to spend in order to buy basic goods or services such as food, clothes and a place to live is what we refer to as the cost of living. Gone were the days when people exchange goods for goods, a system of trade called barter. For many centuries now, goods and services are priced in money.
Goods are bought and paid for with money. Services are purchased and paid for with money. Today, money plays a very central role in our lives all across the world. To begin with, money is earned by working – where working refers to the activities we do for money. The money earned from work is also referred to as wages or salaries. The amount of money people earn from their work can be viewed as good or bad, small or big, depending on the cost of living.
In a situation where one’s salary is not enough to cater to his needs, or his needs and that of his family, he is underpaid or poorly paid. Whereas if you are able to cater to your needs and that of your family with your salary, it would be said that you are well paid.
The cost of living inversely affects the quality of life of the people. And the cost of living itself is profoundly and directly influenced by inflation. Hence, the higher the inflation, the higher the cost of living. But a high cost of living is not tantamount to a high quality of life. In a situation where inflation and the cost of living increase, but salaries remain unchanged, the quality of life of the people shall be affected negatively.
Countries with a high cost of living tend to breed a lot of poor people with a low standard of living in that they are not able to purchase quality health care, good food, reasonable accommodation, good education, etc. Countries with a low cost of living bring contentment to the populace for they are able to afford their immediate and or basic needs. Both high and low costs of living exist on the African continent. While some African countries experience a high cost of living other have a low cost of living.
Share the economic experience at your end. Does your country, region, city, or village experience a high or low cost of living?
