10 Least and Most Expensive States Doing a Number on American Bank Accounts

Inflation is cooling down. But as many Americans are realizing, that doesn’t correspond with a decrease in the cost of goods. So, some are looking for a cheaper state to move to.

Forbes Advisor ran a study to determine the cheapest states to live in and those where hard-earned dollars don’t go as far. They used several sources for gathering their data, including but not limited to the U.S. Census Bureau and the Council for Community and Economic Research. In addition to ranking states with the highest and lowest total cost of living based on housing, healthcare, taxes, food, and transportation, Forbes ran a separate ranking of disposable income after paying for living expenses based on the average annual wage in each state.

These are the states that are the cheapest and most expensive to live in for 2024. Do you live in or are considering moving to one of them?

1: Mississippi

Mississippi is the cheapest state to live in. It has a total cost of living of $32,336 and an annual average wage of $45,180. That makes the Magnolia State the worst place to live in from a low-wage perspective, which can offset the benefits of low living costs. Case in point? Mississippians have an average of $12,844 in annual disposable income, which is the second lowest in the nation.

2: Arkansas

The Natural State is the second most economical state from a cost of living perspective, with a total cost of living of $32,979. For those who are wavering between whether a move to Mississippi or Arkansas is better, from a financial perspective, Arkansas is likely the best choice. Given that the annual average wage in Arkansas is $48,570, that leaves residents with a relatively cushier $15,591 in total disposable income.

3: Alabama

Alabama breaks into the $33,000s for annual cost of living expenses ($33,654). Its residents also break $50,000 in their average annual wages ($50,620). Between the two, that helps Alabama rank 33 in the nation for the amount of total disposable income its residents have ($16,966).

4: Oklahoma

Here’s good news for those trying to choose between moving to Alabama or Oklahoma: The difference in total cost of living and disposable income between the two is minimal. The total cost of living in Oklahoma is only $312 more, and residents only have $8 more in disposable living than Alabamians.

5: New Mexico

New Mexico is the fifth cheapest state from a cost of living perspective, with residents spending $34,501 annually on living costs. But even more exciting than that for New Mexicans is that given their $54,400 average annual wage, they have $19,899 in disposable income each year. That ranks them the 16th-best in the country for disposable income.

6: Tennessee

Although the cost of living in Tennessee ($34,742) is about on par with New Mexico, its residents earn less. Given Tennessee’s annual average wage of $52,820, residents only have an average of $18,078 in disposable income, which ranks them in 24th place for disposable income nationwide.

7: South Carolina

South Carolinians spend an average of $34,826 per year on essential living costs. Those costs eat into their total disposable income ($15,824), given that residents only earn about $50,650 in average annual wages. That ranks the Palmetto State in 45th place for wages.

8: West Virginia

West Virginia has a high total cost of living relative to residents’ average annual wage. After deducting $34,861 in average living expenses from the $49,170 they make, it leaves West Virginians with a measly $14,309 in disposable income.

9: Kansas

Kansas residents spend an average of $35,185 on essential living expenses. The Sunflower State ranks relatively higher for an annual average wage, in 38th place with $52,850 in earnings. That means Kansans have $17,665 in disposable income, ranking Kansas in 26th place for the disposable income category.

10: Missouri

Missouri rounds out the top ten cheapest states to live in, with a total cost of living of $35,338. Missouri’s disposable income is the second-best on this list so far, at $19,182. That relatively high number is thanks to its residents earning $54,520 in annual average wages.

Most Expensive States

Now that we’ve covered Forbes’ cheapest states to live in, these are the most expensive states. As we’ve learned from the cheapest states, lower costs of living don’t always equate to more money in residents’ pockets. How well do you think these most expensive states rank for the amount of money left over after paying essential living expenses?

1: Hawaii

Hawaii is the most expensive state in the U.S., with residents pouring $55,491 of their hard-earned money into living costs each year. The equally painful part? Hawaiians only make $61,420 in average annual wages. That means their total disposable income is only $5,929, the lowest in the nation.

2: Massachusetts

Massachusetts residents sink an average of $53,860 into cost of living expenses annually. But there’s a silver lining: Bay Staters’ total disposable income is $22,740 per year, thanks to residents earning an average of $76,600. That makes Massachusetts the state with the highest average wages and the third-best state for disposable income.

3: California

California comes in as the third-most expensive state in America. It costs an average of $53,171 to live in the Golden State. After accounting for California’s $73,200 in average annual wages, that gives its residents a total disposable income of $20,049, ranking it in 15th place.

4: New York

New Yorkers pay an average of $49,623 in total cost of living expenses. That’s undeniably high. But here’s the thing: New York residents have the second-best average wages in the nation ($74,870), and because of that, they have $25,247 in average disposable income. That makes New York the state with the highest disposable income in the nation.

5: New Jersey

New Jersey residents only spend $112 less per year than New Yorkers on living expenses ($49,511). However, they make nearly $4,000 less in annual wages ($70,890). The result is that New Jersey only ranks tenth in the nation for its $21,379 of disposable income.

6: Alaska

Isolated Alaska has a stereotype for high prices that holds true in Forbes’ study. Alaskans spend $48,670 in total living expenses while earning $66,130 in average annual wages. That means Alaskans only enjoy an average of $17,460 in disposable income each year, ranking The Last Frontier in 29th place for disposable income.

7: Maryland

Maryland’s annual cost of living expenses are only $435 less than Alaska’s. That said, Maryland ranks in 9th place for disposable income ($21,515), for its residents earn an average of $69,750 each year.

8: Washington

Moving to Washington can come with sticker shock for Americans leaving cheaper states, given its $47,231 average cost of living expenses. However, those who get a job in the Evergreen State will likely rejoice, for Washington’s $72,350 average salary gives its residents $25,119 in total disposable income, the second best in the United States.

9: Connecticut

Yet another Northeast state makes this list, with Connecticuters having to spend an average of $46,912 in yearly living costs. However, many locals are better off than residents in several other states, given that their annual average wage of $69,310 equates to $22,398 in annual disposable income. That makes Connecticut the sixth-best state for a high disposable income.

10: Oregon

Oregon squeezes into the top ten most expensive states in unwanted ways compared to many of the states it joins. The total cost of living in the Beaver State is $46,193. However, residents only make $62,680 per year. That leaves Oregonians with $16,487 in disposable income, ranking Oregon in 36th place for the disposable income category.

Not What It Seems

As Forbes’ data shows, states with the lowest cost of living don’t always correspond with the states where residents pocket the most disposable income. This fact is partially why housing prices rose 24% between November 2019 and November 2021, when more than 60% of home buyers were remote workers, many looking for cheaper living, a better climate, and more space, which they could afford thanks to their higher out-of-state salaries.

Although remote workers coming from higher-paying states often make out financially well by moving, many locals end up hurting from higher home and rent costs.

Glimmer of Hope

In August 2022, rent prices peaked in the U.S. at a median of $2,054. As of February 2024, the median cost of rent is $1,964. Floridians experienced more relief with rent prices than residents from any other state year over year in 2023, with a 9.21% drop.

Where You Live Matters

While Forbes’ data is enlightening for Americans looking to move to save money, it doesn’t paint the full picture. The cost of living in certain cities and hotspots like beachfront areas is higher than in many rural areas within a state. So, if you’re looking to move to save cash, do your due diligence to assess living costs in the city you want to call home.

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