The cost of living is often used to compare how expensive it is to live in one location versus another. It is the amount of money needed to sustain a certain standard of living by affording basic expenses such as food, housing, healthcare, and taxes.
Cost of living is one of the big factors people use to determine where they want to be located, in addition to cultural attractions, a healthy job market, and good school systems.
The cost of living in the United States varies significantly from one state to the next. The factors affecting the cost of living include the average earning, the average cost of rent or buying property, and the price of essential goods. Unfortunately, many states are unaffordable for middle-class wage earners due to slow wage growth, inflation, and expensive housing in the U.S.
Cost of Living Index: 196.3 Grocery Cost Index: 167.7 Housing Cost Index: 336.3 Transportation Cost Index: 138.8
Hawaii is the most expensive state to live in in the United States. Hawaii has a cost index of 196.3. The average home price in Hawaii is $1,158,492. The utility index is the highest in the country at 189.5, and the average monthly energy bill is $388.65. Basic physical goods, such as a half-gallon of milk, cost more than anywhere in the mainland United States because they need to be shipped to the middle of the Pacific Ocean.
2. District of Columbia
Cost of Living Index: 161.1 Grocery Cost Index: 115.8 Housing Cost Index: 279.2 Transportation Cost Index: 108.0
Washington D.C. is the second-most expensive state in the United States, with a cost of living index of 161.1. D.C. has the second-most expensive housing, with the average two-bedroom apartment costs $2,776 per month, and the median home value is $628,914. The living wage in D.C. is $67,867, the highest living wage in the country. Luckily, D.C. has one of the highest median household incomes in the country at $85,203 per year.
Cost of Living Index: 138.5 Grocery Cost Index: 117.3 Housing Cost Index: 196.5 Transportation Cost Index: 132.4
California is the third-most-expensive state in the U.S. with notoriously high housing and transportation costs. California's housing index is 196.5, and its transportation index is 132.4, the second- and third-highest in the U.S., respectively. The average two-bedroom apartment in California runs for about $2,495 per month and is even more expensive in cities such as San Francisco and Los Angeles. California has some of the highest gasoline prices in the United States, and the average monthly energy bill is about $237.13.
Cost of Living Index: 134.6 Grocery Cost Index: 113.8 Housing Cost Index: 184.8 Transportation Cost Index: 129.4
Oregon is the fourth-most expensive state in the country. Oregon's median home value is $549,358, more than double the U.S. median. Groceries in Oregon are also more expensive than the U.S. average, especially coffee and sugar. Transportation costs in Oregon are the third-highest in the country, behind Hawaii and California. Luckily, utility costs are below-average.
5. New York
Cost of Living Index: 133.7 Grocery Cost Index: 113.4 Housing Cost Index: 197.5 Transportation Cost Index: 105.0
New York is the fifth-most expensive state in the United States. New York has the most expensive housing, with the average cost of a home at $1,901,222. Rent in New York City is one of the highest in the country, with an average rent of $3,667 for a two-bedroom. The closer one lives to New York City, the more expensive it is to live in the state. The living wage in New York is $59,128, and the median household income is $64,894.
Cost of Living Index: 132.6 Grocery Cost Index: 128.1 Housing Cost Index: 173.6 Transportation Cost Index: 110.1
The sixth-most expensive state in the U.S. is Massachusetts, home to Boston, one of the most expensive cities in the United States. The average home price in Massachusetts is $663,942, almost three times the national average. Massachusetts residents' monthly energy bill is around $236.62 on average, and their gas prices are fairly high as well. Luckily, as the most educated state in the U.S., Massachusetts also has one of the highest median household incomes in the country of $77,378.
Cost of Living Index: 128.1 Grocery Cost Index: 114.6 Housing Cost Index: 180.2 Transportation Cost Index: 107.1
The seventh-most expensive state in the United States in Maryland. Maryland's expensiveness can be attributed to its proximity to Washington D.C. The average home price in Maryland is $794,750. Luckily, Maryland's health cost index is 85.7, below the national average. Despite the cost, Maryland has the second-lowest poverty rate in the U.S. of 8.2%. Additionally, Maryland has the second-highest median household income of $81,868.
Cost of Living Index: 128.0 Grocery Cost Index: 132.4 Housing Cost Index: 134.3 Transportation Cost Index: 117.8
Alaska is the U.S.'s eighth-most expensive state. Like Hawaii, Alaska also needs to have all of its goods shipped in from the mainland United States, giving it the country's second-highest grocery index. Additionally, Alaska's winters are cold and dark, causing energy bills to be very high. Luckily, Alaska's median household income is $76,715, the sixth-highest in the country, and Alaska residents receive oil dividends to boost their income.
Cost of Living Index: 125.1 Grocery Cost Index: 107.7 Housing Cost Index: 142.2 Transportation Cost Index: 112.6
Connecticut is the ninth-most expensive state in the United States. Connecticut has expensive housing, utilities, and alcohol. The average home price in Connecticut is $662,447, and the monthly energy bill for a home is about $215.97. Additionally, a bottle of white table wine in the state will cost about $10.63 on average, double the price than in other states. Grocery prices are also above average.
10. Rhode Island
Cost of Living Index: 119.4 Grocery Cost Index: 108.0 Housing Cost Index: 132.3 Transportation Cost Index: 106.1
Rhode Island rounds out the ten most expensive states in the U.S. The average rent for a two-bedroom apartment in Rhode Island is around $1,385, while the typical home value is about $331,458. Utilities are very high in Rhode Island, with the monthly costs averaging around $522. The median household income in Rhode Island is $64,340, going as high as $89,847 in Washington County.
At the opposite end, Mississippi, Arkansas, and Oklahoma are the least expensive states. In general, however, states where it is cheaper to live have lower median incomes. In 2017, Mississippi's median household income was $43,529, but the U.S. median was $60,336.