Cheapest States to Live in the US in 2024
Roll out the welcome mat for the cash-conscious and the budget-wise! America’s diverse landscape isn’t just an amalgamation of vibrant cultures and natural beauty; it’s also a treasure map guiding you to pockets where frugality meets fulfillment.
Imagine comfortable living not as a tug-of-war with your wallet, but a harmonious march with prosperity.
Buckle up, the roadmap to the cheapest states in the US starts here!
Cost of Living in the US
The disparity in living expenses across the United States is unmistakable. Living expenses, from accommodation and food to healthcare and taxes, are the financial requirements necessary to maintain a specific lifestyle. Notably, a state’s cost of living exhibits a profound connection with its average personal income per capita. This discrepancy among states hinges on the purchasing power of a dollar within their borders, most clearly reflected in housing expenses. As 24/7 Wall St. reveals, a dollar invested in Arkansas rent equates to $1.58 in value, whereas in Hawaii, its value shrinks to just $0.61.
Unveiling the full scope of living expenses in the cheapest states requires an understanding of national benchmarks. The yearly expense coverage for the typical American family is approximately $61,334. Housing demands the lion’s share, consuming nearly 35% of income at an average monthly rate of $1,784. The typical price for a detached home in the US is roughly $273,992, while the nationwide monthly rent for a two-bedroom flat averages $1,164.
On average, US households spend another $9,826 yearly on commuting, making up 16% of expenses. Annually, healthcare expenditures come to around $5,177. The combined annual cost of dining out and groceries for an average American family is $7,317, or about $609.75 per month. Utility bills run an average monthly total of $370.16.
As of the current data, the US median household income stands at $67,521, dropping to $40,464 for solo dwellers. A living wage, the sum sufficient to cover all essential needs including childcare and medical care, is set at $68,808 annually for a family of four.
You can explore some of the states with low cost of living and possibly high quality of life.
20 Cheapest States to Live in the US
The table below exhibits the 20 states with the lowest costs of living in the US.
Rank | State | Cost of Living Index | Grocery Costs Index | Housing Cost Index | Utility Costs Index | Transportation Costs Index | Misc Costs Index |
20 | Wyoming | 94.3 | 102.7 | 81.3 | 85.2 | 99.9 | 105.5 |
19 | Nebraska | 93.7 | 98.6 | 86.6 | 89.3 | 100.2 | 96.8 |
18 | South Carolina | 93.6 | 99.5 | 79.6 | 105.2 | 95.2 | 99.4 |
17 | Kentucky | 93.1 | 92.1 | 79.9 | 104.7 | 103 | 103.7 |
16 | Louisiana | 93 | 96.8 | 86 | 87 | 96.5 | 98.4 |
15 | Texas | 92.1 | 90.8 | 83.8 | 103.2 | 94.1 | 97 |
14 | Michigan | 91.3 | 90.1 | 80.7 | 99.7 | 103.2 | 96.4 |
13 | Ohio | 91.3 | 99.2 | 76.5 | 92 | 98.6 | 98.7 |
12 | New Mexico | 91 | 95.5 | 84.3 | 89.6 | 98.1 | 91.9 |
11 | Arkansas | 90.9 | 93.1 | 79.1 | 92.3 | 92.3 | 97.4 |
10 | Indiana | 90.6 | 92.7 | 78.3 | 99 | 98.3 | 95.2 |
9 | West Virginia | 90.5 | 96.5 | 78.6 | 89.4 | 92.2 | 102.9 |
8 | Iowa | 89.9 | 98.4 | 76 | 94.9 | 97.7 | 93.7 |
7 | Missouri | 89.8 | 95 | 80.3 | 95.4 | 92.4 | 95.8 |
6 | Tennessee | 89 | 94.7 | 79.3 | 92.5 | 88.8 | 92.9 |
5 | Georgia | 88.8 | 95.9 | 74.4 | 90.5 | 92.6 | 96.6 |
4 | Alabama | 87.9 | 98.2 | 70.1 | 100.7 | 92.7 | 94.1 |
3 | Oklahoma | 87.9 | 94.5 | 74.7 | 95.1 | 94.8 | 93.5 |
2 | Kansas | 86.5 | 91.7 | 72.6 | 100.2 | 97.3 | 90.3 |
1 | Mississippi | 83.3 | 92.2 | 66.3 | 90.4 | 86.7 | 91.4 |
In the cost of living rankings across the U.S., Mississippi takes the top spot for affordability, with costs averaging 17% below the national mean. Nevertheless, its charm is marred by high poverty rates and a reputation for economic and educational difficulties.
Ranked third in affordability, Alabama offers cost-effective housing and low transportation expenses. Yet, it battles with one of the nation’s highest poverty rates.
Oklahoma, situated fourth in the cost-effective states’ list, boasts prices about a quarter lower than the average U.S. cost of living. However, it is blighted by a high poverty rate, possibly due to the discrepancy between the median income and the living wage.
Georgia stands fifth in terms of affordability, with one of the highest housing affordability rates in the nation and low transportation costs, offering an acceptable standard of living despite its low minimum wage.
Tennessee, the sixth most affordable state, displays a cost of living 11% less than the national average. Notable for low transportation and healthcare costs, it provides a decent quality of life amidst an unemployment rate of 3.4% and a poverty rate of 13.8%.
Factors That Make a State Cheap to Live in
🏡 Affordable Housing: The availability of reasonably priced homes or rentals can drastically reduce the overall cost of living in a state.
🍎 Grocery Costs: The lower the prices for basic food items, the cheaper it is to live in that state.
💡 Utility Costs: Cheaper electricity, gas, water, and other utilities contribute to a lower cost of living.
⛽ Transportation: Affordable public transport systems or lower gas prices can significantly cut down living expenses.
🏥 Healthcare: Regions with affordable healthcare services, including hospitalization, medicine, and insurance, make living cheaper.
🛍️ General Goods and Services: Lower costs for everyday goods and services, such as clothing, restaurants, repairs, and entertainment, can also make a state more affordable.
📚 Education: Affordable or free quality education, from primary school to higher education, can make a significant difference in the cost of living.
🏞️ State Taxes: Lower state tax rates contribute to the overall affordability of a state.
💼 Job Opportunities: States with thriving job markets can provide higher income opportunities, balancing out the cost of living.
In this article, we’ve explored cheapest states to live in. However, in any case, remember, while the cost of living is an important factor, it’s also crucial to consider the quality of life a state offers. Everything from access to nature and climate to cultural activities and community vibe, can impact your overall satisfaction with your living situation.
Advantages of Living in the Cheapest States
Greater Purchasing Power: Lower costs mean your dollar stretches further, allowing you to enjoy a better quality of life even on a modest income.
Affordable Housing: Cheaper states often have lower house prices or rents, meaning you might be able to afford a larger or better-located home than in a more expensive area.
Lower Living Costs: Essential expenses such as groceries, utilities, and transportation are generally more affordable, reducing the daily strain on your budget.
Potential for Savings: With lower living costs, you may find it easier to save money for future goals, whether that’s starting a business, pursuing further education, or building a nest egg for retirement.
Less Financial Stress: The reduced cost of living can mean less financial worry, making life more enjoyable and less stressful.
Investment Opportunities: Lower property prices can offer opportunities for investment in real estate, potentially leading to significant future returns.
Community Focus: Cheaper states often have a strong sense of community, which can result in a more relaxed lifestyle and better quality of life.
Cheapest States to Live in the US: The Bottom Line
Affordability can be found in every corner of the United States, from Mississippi to Tennessee. Yet, it’s crucial to remember that the most affordable states also grapple with challenges, often reflected in high poverty rates and substantial income disparities.
The cheapest living costs can be a significant allure, but these must be considered in tandem with other critical factors such as job opportunities, quality of education, and overall standard of living. While Mississippi, Alabama, Oklahoma, Georgia, and Tennessee top the affordability charts, their economic and social circumstances vary, adding layers to the cost of living story. As we navigate the financial landscape of the U.S., the ultimate choice of where to reside should balance affordability with the quality of life one aspires to achieve.
FAQs
What are some of the cheapest states to live in the US?
Some of the most affordable states in the US include Mississippi, Alabama, Oklahoma, Georgia, and Tennessee. These states consistently rank below the national average in terms of the cost of living index.
What is the cost of living index, and how is it calculated?
The cost of living index is a statistical measure that compares the average costs of basic expenses in different areas. It is calculated by the Council for Community and Economic Research, based on the prices of groceries, housing, utilities, transportation, and healthcare. A state with a cost of living index below the national average is considered cheaper to live in.
How does the cost of living in the cheapest states compare to the national average?
The cheapest states to live in typically have a cost of living index that is significantly lower than the national average. This means that the average costs of essential items and services, like housing and food, are less expensive than in other states.
How is housing cost determined in the cheapest states?
Housing cost, a major factor in the cost of living index, is determined by the median price of homes and average rental prices. In the cheapest states, both home prices and rents tend to be significantly lower than the national average.
What makes these states the cheapest to live in?
The cheapest states to live in generally have a lower cost of living index because of lower housing costs, lower utilities costs, and overall lower expenses for necessities compared to the national average.
What factors contribute to the lowest cost of living?
A6: Several factors contribute to the lowest cost of living, including low housing cost, affordable healthcare, inexpensive groceries, reasonable utility prices, and cheap transportation. These factors are all considered in the cost of living index.
Can a low cost of living index reflect negatively on a state's economic health?
While a low cost of living index is usually seen as positive for residents because of the potential for saving, it doesn't always equate to a robust economy. In some cheapest states, the low cost of living can be accompanied by lower wages, fewer job opportunities, or a higher poverty rate compared to the national average. Therefore, it's always important to consider the broader economic picture.
How does economic research factor into understanding the cost of living in the cheapest states?
Economic research is crucial in understanding the cost of living as it provides data on factors such as wages, job growth, and economic stability. Combined with the cost of living index, this information can provide a comprehensive view of what it's like to live in the cheapest states.