What Was The Cost of Living in 1983?

History buffs who weren’t alive or don’t remember the eighties may be wondering, “What was the cost of living in 1983?” If you resided in the US during this decade, you probably recall how up and down the economy was. Towards the beginning of the eighties, Americans had to suffer through two recessions. But according to the BLS, the country bounced back and experienced a strong financial recovery. Of course, all of this economic turbulence made the cost of living in 1983 harder for families to afford.

Although the unemployment rate was starting to fall, it was still higher than average in 1983, which likely made it harder to find well-paying work. To give you a clearer picture of the state of the economy in the early eighties, let’s dig into the cost of living in 1983.

What Was The Cost of Living in 1983?

The cost of living in 1983 may seem affordable to us today. But as you review the prices below, keep in mind that wages were much lower during this decade. According to Do You Remember When, the average annual income in 1983 was only about $21,000, so households had smaller budgets to work with.

Americans were also recovering from the recession that ended in 1982. Although inflation was low in 1983 and the economy was generally on the upswing, unemployment was still elevated at 8.3%. It didn’t fall below 6% until September of 1987 according to Pew Research. This stubbornly unemployment rate may have made it harder for Americans to financially recover from the recession and find high-paying jobs.

Here’s an overview of the average prices of groceries and other essentials if you’re wondering, “What was the cost of living in 1983?”

Cost of Groceries

The inflation rate in 1983 was relatively low, so food prices probably didn’t increase too much that year. Although prices remained pretty stable, families still had to spend a large chunk of their budgets on food, just as we do today. The average family spent roughly $4,500 per year on groceries and food away from home in the mid-eighties. Considering the average income was only about $21,000 per year, food was a pretty big expenditure.

To get a better idea of how much families had to spend on groceries, check out the price of various staples below, from ground beef to milk. Historical prices were gathered from The Union Bulletin, Do You Remember When, and The People History.

Cost of Major Purchases

The cost of living in 1983 was improving thanks to the economic recovery and relatively low inflation rates. However, interest rates that year were high, which likely made it hard for Americans to finance major purchases like cars and homes. According to HUD, the average 30-year conventional mortgage rate in 1983 was 13.23%. Although homes cost less back then, this rather punishing interest rate made affording the American dream of owning a home harder for the average family.

For additional context on the cost of living in 1983, take a look at the cost of other major necessities below, such as rent and gas.

Cost of Having Fun

Although Americans were contending with high interest rates and trying to rebuild after the recession, they still had a bit of money left over to splurge on fun experiences. Although we couldn’t source exact data for 1983, the average family spent roughly $1,500 on entertainment in 1984, which should give you an idea of fun budgets back in the day.

In the eighties, entertainment was much simpler. There were no streaming services or social media sites, so families and friends spent time together enjoying each other’s company. The mall, arcade, rollerskating rink, bowling alley, and movie theater were popular hangout spots for people of all ages. Kids enjoyed playing sports with friends, riding bikes, and playing video games on early consoles like the Sega SG-1000. Check out the cost of various luxuries below to understand the cost of having fun in 1983.

What do you think about the cost of living in 1983 and how it compares to today? Do you have any financial memories from the eighties, such as prices you paid or economic events you experienced? Share your thoughts in the comments!

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Vicky Monroe

Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.