Least Expensive States 2025

The cost of living refers to the costs of covering needs such as food, housing, healthcare, and transportation. Costs of living differ significantly, depending on where one lives, and tend to be higher in urban areas. In the United States, the lowest costs of living are in the southern and central parts of the country.

Housing is the biggest driver of the cost of living and varies widely. For example, a single-bedroom apartment in Lawton, Oklahoma costs $550, while a similar unit in New York City runs $3,260 a month. Clearly, living in New York City would be much more expensive than living in a small town in Louisiana. Since Americans spend 34.9% of their budget on housing, the lowest living costs are in those states with the lowest housing costs. When calculating the cost of living, other considerations include transportation, healthcare, food, childcare, and taxes.

The cost of living index measures the relative cost of living across states and uses the national average for costs to compare prices. The national average for each index is 100. For example, if an individual index is 90, prices are 10% lower than the national average.

The Cost of Living in the United States

The average American household spends $61,334 each year to cover their expenses. Housing and housing-related costs count for 34.9% of an average household’s expenses, approximately $1,784 a month. A single-family home in the United States has a median price of $273,992, while an average two-bedroom apartment costs $1,164 a month.

Transportation accounts for another $9,826 annually for an average American household, making up another 16% of their expenses. Food, both eaten at home and eaten out, costs an average of $7,317 a year, or $609.75 a month. Healthcare costs another $5,177 a year. Utilities add on another $370.16 a month or $4,441.92 a year.

The median household income in the United States is $67,521 a year. The median income for single-occupant households is $40,464. The living wage, defined as the amount required to cover all necessities, including healthcare and childcare, is $68,808 a year for a family of four.

The Cheapest States to Live

Mississippi

• Cost of Living Index: 83.3
• Groceries: 92.2
• Housing: 66.3
• Utilities: 90.4
• Transportation: 86.7
• Health: 94.7
• Miscellaneous: 90.9

Mississippi has the lowest cost of living in the United States. With a cost of living index of 83.3, expenses are nearly 17% less than the national average. Mississippi’s housing costs are the lowest in the nation. The price of a median, single-family home is $140,818. Rent for a two-bedroom apartment costs an average of $777 a month. Transportation costs are the lowest in the nation.

The living wage for a family of four in Mississippi is $80,523. However, the median income for a family of four is $70,656. The discrepancy between needs and wages results in the nation’s highest poverty rate, with 20% of Mississippians living at or below the poverty level. Primarily due to economic concerns, Mississippi is also consistently ranked one of the worst states to live in.

Kansas

• Cost of Living Index: 86.5
• Groceries: 91.7
• Housing: 72.6
• Utilities: 100.2
• Transportation: 97.3
• Health: 100.4
• Miscellaneous: 88.4

Kansas offers the second-cheapest cost of living in the nation. Housing costs are 28% lower than the national average, the third-lowest in the country. The typical single-family home in Kansas costs $176,898. A typical two-bedroom apartment rents for $862 a month. Groceries and transportation costs are also lower than the national average.

The living wage in Kansas is $89,353 a year for a family of four. The median income for a family of four is $92,980. Kansas has a poverty rate slightly lower than the national average and one of the lowest unemployment rates in the country. at 2.5%.

Alabama

• Cost of Living Index: 87.9
• Groceries: 98.2
• Housing: 70.1
• Utilities: 100.7
• Transportation: 92.7
• Health: 91.2
• Miscellaneous: 94.3

Alabama has the third-lowest cost of living in the country, with an index of 87.9. Alabama has the second-lowest housing prices, behind Mississippi. The typical single-family home in Alabama sells for $170,184, while a two-bedroom apartment costs $807 a month. While utilities and groceries are close to the national average, Alabama’s health and transportation costs are among the lowest in the nation.

The living wage for a family of four in Alabama is $80,777, just below the median income of $80,845. Poverty rates in Alabama are high, with 15.6% of residents living at or below the poverty line.

Oklahoma

• Cost of Living Index: 87.9
• Groceries: 94.5
• Housing: 74.7
• Utilities: 95.1
• Transportation: 94.8
• Health: 94.5
• Miscellaneous: 92.6

Oklahoma has a cost of living index of 87.9 and offers the fourth cheapest cost of living in the United States. Housing prices in Oklahoma are the fifth lowest in the country, 25% cheaper than the national average. The typical single-family home costs $150,754, while the average two-bedroom apartment rents for $814 a month. Costs for groceries and healthcare are also some of the cheapest in the nation.

While the cost of living is low, so are salaries. The median income for a family of four in Oklahoma is $78,458 a year. However, the living wage for the same family is $86,333. Oklahoma has one of the highest levels of poverty in the country. Fifteen percent of residents live at or below the poverty line. For children, the state’s poverty rate is nearly 20%. Oklahoma also consistently ranks as one of the worst states to live in.

Georgia

• Cost of Living Index: 88.8
• Groceries: 95.9
• Housing: 74.4
• Utilities: 90.5
• Transportation: 92.6
• Health: 96.7
• Miscellaneous: 97.1

Georgia has the fifth-lowest cost of living in the United States. Georgia’s housing expenses are the fourth lowest in the country, with prices 25% lower than the national average. Housing affordability is among the highest in the nation, with over 40% of residents able to afford a new home. Transportation costs in Georgia are also among the lowest in the country.

The minimum wage in Georgia is only $5.15 an hour, the lowest in the nation. However, salaries are generally sufficient to cover the costs of living in the state. The median income for a family of four in Georgia is $91,161 a year, while the same family would need only $85,101 a year to cover necessary expenses. Georgia has an unemployment rate of 3.2%, lower than the national average.

Tennessee

• Cost of Living Index: 89.0
• Groceries: 94.7
• Housing: 79.3
• Utilities: 92.5
• Transportation: 88.8
• Health: 91.2
• Miscellaneous: 94.2

Tennessee offers the country’s sixth-lowest cost of living. Overall, prices in Tennessee are 11% lower than the national average. Housing costs are 21% lower than the national average. A typical single-family home costs $231,682, while an average two-bedroom apartment rents for $904 a month. Transportation and healthcare costs in Tennessee are some of the lowest in the country. Utilities are also especially low, with the typical household spending $256.83 a month.

The median income for a family of four in Tennessee is $85,923 a year, much higher than the living wage of $78,000. The unemployment rate in the state is 3.4%.

Missouri

• Cost of Living Index: 89.8
• Groceries: 95.0
• Housing: 80.3
• Utilities: 95.4
• Transportation: 92.4
• Health: 94.6
• Miscellaneous: 93.3

Missouri has the seventh-lowest cost of living in the United States. Housing in Missouri costs 20% less than the national average. A typical single-family home in the state costs $194,226. A two-bedroom apartment rents for an average of $834. Utilities cost an average of $363.80 a month. Missouri’s cost of living index is below the national average on all metrics, with especially low costs associated with health and transportation.

Missouri has one of the higher minimum wages in the country at $11.15 an hour. The median income for a family of four is $89,418 a year, while the living wage is $86,410 a year.

Iowa

• Cost of Living Index: 89.9
• Groceries: 98.4
• Housing: 76.0
• Utilities: 94.9
• Transportation: 97.7
• Health: 99.9
• Miscellaneous: 94.2

Iowa has the United State’s eighth-lowest cost of living, with costs in all categories below the national average. Housing in Iowa is the sixth cheapest in the nation, with an index of 76. The median price of a single-family home is $165,955. Rents for a two-bedroom apartment average $808 a month. Utilities run an average household of $336.24 a month.

The living wage for a family of four in Iowa is $95,199. Meanwhile, the median income is $95,199. Iowa has a level of poverty lower than the national average. The unemployment rate is also lower in Iowa than in the nation as a whole.

West Virginia

• Cost of Living Index: 90.5
• Groceries: 96.5
• Housing: 78.6
• Utilities: 89.4
• Transportation: 92.2
• Health: 88.1
• Miscellaneous: 99.7

West Virginia has the country’s ninth-lowest cost of living in the United States. Housing costs are among the lowest in the nation, while [housing affordability is high](Source: https://howmuch.net/sources/average-cost-of-health-insurance-by-state). The typical single-family home costs $117,768. A two-bedroom apartment rents for an average of $727 a month. Transportation and healthcare costs are some of the lowest in the nation. However, West Virginia is ranked one of the worst states to live in due to low economic opportunities, poor educational outcomes, and infrastructure in need of repair.

The living wage for a family of four in West Virginia is $86,704. However, the median income is only $73,600 a year. West Virginia has the nation’s fourth-highest poverty rate, with 16% of its residents living at or below the poverty line.

Indiana

• Cost of Living Index: 90.6
• Groceries: 92.7
• Housing: 78.3
• Utilities: 99.0
• Transportation: 98.3
• Health: 94.6
• Miscellaneous: 96.8

The cost of living in Indiana is the tenth-lowest in the United States. Average prices in all categories are below the national average, and overall costs are 10% cheaper than the national average. Indiana’s housing costs are the eighth cheapest in the nation. The median single-family home costs $185,805. A two-bedroom apartment rents for $840 a month. Utilities are just below the national average, while healthcare and transportation costs are among the lowest in the nation.

The living wage for a family of four in Indiana is $81,321. The median income is $90,654.