The cost of living is the amount of money a person needs to spend on housing, food, transportation, clothing, and other items that they need to live. The cost of living isn't an exact amount of money, and doesn't mean that's all the money a person needs to live. Rather it is a term that refers to the amount of money you spend for the basic requirements of daily life. The cost of living can go up and down based on the conditions in the economy, and depending on where you live. Living in a city typically costs more than living in rural areas, for instance. Learn all this and more in Cost of Living.