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Cheapest States To Live In 2020

The cost of living in the United States varies between states. The cost of living is the amount of money needed to sustain a certain standard of living. The cost of living includes housing, food, taxes, and healthcare. There is a strong correlation between a state’s cost of living and per capita personal income.

The cost of living differs between states depending on how far the dollar goes in that state. This can be seen in housing costs especially. According to 24.7 Wall St., a dollar spent on rent in Arkansas is worth $1.58 in value, while a dollar spent on rent in Hawaii is worth $0.61.

The cost of living index is based on the US average of 100. Any amount below 100 means that the cost is below the nation’s average, and any amount above 100 means that the cost is higher than the nation’s average. The lower the number, the further the dollar goes for that cost.

Most of the states with the lowest cost of living are in the South, while those with the highest costs of living often have some of the nation’s largest urban clusters. Generally speaking, states that have a smaller portion of residents living in cities see the dollar go further. The cheapest state in the United States is Mississippi. Mississippi’s cost of living index is 86.1 and has the lowest overall housing cost index of all 50 states of 70.1.

Below are the ten states with the cheapest cost of living.

1. Mississippi

Grocery Cost Rank: 4th
Housing Cost Rank: 1st
Utilities Cost Rank: 10th

The cheapest state to live in in the United States is Mississippi. Overall, Mississippi’s average cost of living is about 19% lower than the national average cost of living. Mississippi’s living wage is only $48,537 and has the cheapest personal necessities anywhere in the country. Housing costs about $795 a month, and childcare in Mississippi is the cheapest in the country, costing about $2,869 a year. Food, health care, and many other necessities are among the least expensive in the nation as well.

2. Arkansas

Grocery Cost Rank: 6th
Housing Cost Rank: 9th
Utilities Cost Rank: 14th

Arkansas has the lowest housing costs in America with the average residents on spending about $708 a month on rent or mortgages, which is half of what many people pay, and the median home cost is $128,800. The second-cheapest cost of living in America, however, comes with the second-lowest salaries in America. Arkansas’s living wage is $49,970. Transportation, utilities, food, and other expenses are also significantly lower in Arkansas.

3. Oklahoma

Grocery Cost Rank: 12th
Housing Cost Rank: 4th
Utilities Cost Rank: 20th

Oklahoma has the third-lowest cost of living in America. Like Mississippi and Arkansas, housing is one of the lowest in the country with the average home price at $124,800, an index of 54, and rent for a two-bedroom apartment average $740. Oklahoma also has some of the lowest gas prices in the U.S., and even utilities and grocery costs are below average with indexes of 94.9 and 96.5. Oklahoma City has an overall cost of living 15.4% below the national average.

4. Missouri

Grocery Cost Rank: 16th
Housing Cost Rank: 2nd
Utilities Cost Rank: 30th

The fourth-least expensive state in America is Missouri. Joplin, Missouri has the lowest real estate prices in the country, where a four-bedroom home can cost just a little over $200,000. Groceries prices in Missouri are notably lower than in other parts of the country, with a dozen eggs costing only $1.32 in Joplin. Cities such as Springfield has an overall cost of living that is 14.1% lower than the national average, while Joplin is 17.7% below the national average.

5. New Mexico

Grocery Cost Rank: 27th
Housing Cost Rank: 13th
Utilities Cost Rank: 4th

New Mexico is the fifth-cheapest state in the U.S. Groceries are about the same as the national average; however, utilities and housing are significantly lower than the national average. The median home cost in New Mexico is $193,200 and the average rent for a two-bedroom home is $762 per month. The cost of living in the southern part of New Mexico is especially inexpensive, with transportation, utility, and health care being substantially less expensive than the rest of the state and country.

6. Tennessee

Grocery Cost Rank: 10th
Housing Cost Rank: 16th
Utilities Cost Rank: 18th

Tennessee is the sixth-cheapest state in America. The living wage in Tennessee is $50,152, the highest on the list so far, coupled with the highest housing costs so far of $810. Taxes in Tennessee are very low with no state income tax and food costs are very low too. Cities such as Morristown have an average cost of living that is 13% below the national average. Utilities in Tennessee are around or slightly above the national average monthly bill.

7. Michigan

Grocery Cost Rank: 2nd
Housing Cost Rank: 10th
Utilities Cost Rank: 25th

The seventh-cheapest state in the U.S. is Michigan. Like Tennessee, Michigan has a relatively low food cost compared to other parts of the country; particularly with beef, where a pound costs only $3.78 per pound. Housing is also low in Michigan. Median rent for a two-bedroom apartment is $915 a month and the median home value is $161,063. The cost of living is even cheaper in Detroit, where the median home value is $48,188.

8. Kansas

Grocery Cost Rank: 5th
Housing Cost Rank: 8th
Utilities Cost Rank: 35th

Kansas is the eighth-cheapest state in America. The cost of living in Kansas is overall about 8.74% less than the rest of the country, and the average household income is about $41,644. A two-bedroom apartment in Kansas costs around $821 a month and the median home value is about $137,700. Groceries cost less in Kansas too, with a half-gallon of milk costing only $1.39 and a pound of ground beef costing $3.79.

9. Georgia

Grocery Cost Rank: 19th
Housing Cost Rank: 7th
Utilities Cost Rank: 17th

Georgia is the ninth-cheapest state in the United States, despite the average utility bill being within the top ten most expensive in the country. Georgia’s median household income is $56,183. The median home value is $180,679 and the median rent prices are cheaper than the rest of the country except for Atlanta, where rent for both one- and two-bedroom apartments are slightly above the national median. Groceries and gas prices are both below the national median as well.

10. Alabama

Grocery Cost Rank: 20th
Housing Cost Rank: 3rd
Utilities Cost Rank: 36th

Rounding out the ten cheapest states in America is Alabama. Alabama has relatively high taxes and above-average health care costs (cost index of 102.2, however, it makes up for it in housing. The median rent for a two-bedroom apartment in Alabama is $698 and the median home value is $129,300. A living wage in Alabama is $50,585, lower than some of the other states that ranked above it.

Here are the 10 states with the lowest cost index:

  1. Mississippi (86.1)
  2. Arkansas (86.9)
  3. Oklahoma (87)
  4. Missouri (87.1)
  5. New Mexico (87.5)
  6. Tennessee (88.7)
  7. Michigan (88.9)
  8. Kansas (89)
  9. Georgia (89.2)
  10. Wyoming (89.3)

Cheapest States To Live In 2020


Cheapest States To Live In 2020

State Cost Index Grocery Housing Utilities Transportation Misc
New Mexico87.5100.977.787.991.6100.1
West Virginia91.192.979.68993.589.1
North Carolina94.996.683.197.993.4110.6
South Carolina95.9101.985.1107.68894.2
North Dakota98.8108.190.393.6104.3111.7
South Dakota99.8107109.891.889.8103
New Hampshire109.7100.4110.3119.5111.4116.1
Rhode Island119.4106.2129.4123.5124109.3
New Jersey125.1109.5163.1101.6111.1101.7
New York139.1114.8204.4108.7116.6104.8