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 U.S. 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 with 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 84.8 and has the lowest overall housing cost index of all 50 states of 66.7.
Below are the ten states with the cheapest cost of living.
Cost of Living Index: 84.8 Grocery Cost Index: 93.1
Housing Cost Index: 66.7 Transportation Cost Index: 89.9
The cheapest state to live in in the United States is Mississippi. Overall, Mississippi’s average cost of living is about 15% 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.
Cost of Living Index: 86.8 Grocery Cost Index: 94.1
Housing Cost Index: 70.1 Transportation Cost Index: 91.3
Oklahoma has the second-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 $879. Oklahoma also has some of the lowest gas prices in the U.S. Even utilities and grocery costs are below average, with indexes of 95.8 and 94.1. Oklahoma City has an overall cost of living 15.4% below the national average.
Cost of Living Index: 87.8 Grocery Cost Index: 90.7
Housing Cost Index: 75.2 Transportation Cost Index: 86.1
Arkansas has the lowest housing costs in America, with the average residents 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 third-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.
Cost of Living Index: 87.9 Grocery Cost Index: 92.8 Housing Cost Index: 71.8 Transportation Cost Index: 94.8
Kansas is the fourth-cheapest state in America. The cost of living in Kansas is about 12.1% 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.
Cost of Living Index: 88.9 Grocery Cost Index: 97.6 Housing Cost Index: 71.6 Transportation Cost Index: 93.9
The fifth-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.
Cost of Living Index: 89.4 Grocery Cost Index: 99.0
Housing Cost Index: 71.3 Utilities Cost Index: 91.3
Georgia is the sixth-cheapest state in the United States. 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.
Cost of Living Index: 89.4 Grocery Cost Index: 95.1
Housing Cost Index: 70.2 Utilities Cost Index: 92.3
Alabama ranks seventh for the lowest cost of living. Alabama has relatively high taxes and high utilities (cost index of 103.3); however, it makes up for it with 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 ranked above it.
8. New Mexico
Cost of Living Index: 89.6 Grocery Cost Index: 99.0 Housing Cost Index: 80.4
Transportation Cost Index: 93.0
New Mexico is the eighth-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.
Cost of Living Index: 90.2 Grocery Cost Index: 94.5 Housing Cost Index: 82.6
Transportation Cost Index: 87.7
Tennessee is the ninth-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. Even with this, Tennessee’s housing index is only 82.6. Taxes in Tennessee are very low, with no state income tax, and food costs are very low. Cities such as Morristown have an average cost of living that is 13% below the national average. Transportation costs are about 12.3% lower than the national average.
Cost of Living Index: 90.4 Grocery Cost Index: 92.3 Housing Cost Index: 76.5
Transportation Cost Index: 99.4
Rounding out the top ten cheapest U.S. states is Indiana. Indiana’s living index cost is 90.4, meaning that the overall cost of living is 9.6% less than the national average. Indiana’s housing index is low at 76.5. A two-bedroom apartment is around $750 a month, and the average home value is about $169,156.