10 States With the Lowest Cost of Living
Looking to move to a state that goes easier on your wallet? In a recent study, Forbes discovered the ten cheapest states to live in. Moving to any of these states could put some hard-earned money back in your pocket.
Methodology
To determine America’s cheapest states to live in, Forbes researchers created a cost-of-living index. The index uses data from the Bureau of Labor Statistics (BLS) to compare living costs against the national average.
The average cost of living per the BLS is $61,134 per year. On the cost-of-living index, this would score 100. Any state with an index score over 100 is more expensive than average, and those with scores below 100 are less expensive.
With that in mind, these are the top ten cheapest states in the USA.
1: Mississippi
Mississippi is the cheapest state to live in. Its cost-of-living index score is 83.3, which means it’s about 33.7% less expensive to live in the Magnolia State than the national average. Unfortunately, Mississippi has a struggling education system and ranks high for poverty, making it a less desirable state to live in for some.
2: Kansas
Kansas has a cost-of-living index score of 86.5 and housing costs that are 26.7% below the national average. The economy in the Sunflower State is also strong, as signaled by its low unemployment rate. However, Kansas is prone to tornados and other extreme weather events.
3: Alabama
With a cost-of-living index score of 87.9, Alabama is an undeniably affordable state. Transportation, healthcare, and housing costs are all well below average. Unfortunately, Alabama struggles with high levels of poverty and a healthcare system that recently ranked second to worst in the nation.
4: Oklahoma
Groceries, healthcare, and housing are all exceptionally affordable in Oklahoma. The cost-of-living index score in the Sooner State is 87.9, and the median cost for a house is only $151,469. That said, Oklahoma’s education system is struggling, so it may not be the best fit for families with young children.
5: Georgia
Georgia’s cost-of-living index score is 88.8. Thanks to busy metropolitan areas like Atlanta and Savannah, Georgia is bustling with activity. It also has a diverse natural landscape and relatively mild winters. However, its long, muggy summers aren’t for the faint of heart.
6: Tennessee
Tennessee scored 89.0 on Forbes’ cost-of-living index. It offers cheap housing, a low unemployment rate, and no state income tax. If you’re considering a move to Tennessee, you’re not alone, and some experts predict the Volunteer State’s booming population could lead to future struggles.
7: Missouri
Missouri sits between the true South and the Midwest, making it a great location for many. Its cost-of-living index is only 89.9, and housing prices are almost 20% below the national average. However, Missouri has high crime rates, muggy summers, and cold winters.
8: Iowa
Iowa’s cost-of-living index score is 89.9. The Hawkeye State boasts a strong economy and a great education system. That said, if you move to Iowa, prepare for cold winters without any large mountains for skiing or snow play.
9: West Virginia
West Virginia’s cost-of-living index score is 90.5, and its housing prices are more than 21% below the national average. Living amongst the beautiful Appalachian Mountains means you’ll get scenic views and a true, four-season experience. As for the downsides? West Virginia’s economy is struggling, and poverty rates are high.
10: Indiana
If you can get over the fact that nearly one out of 12 Hoosiers have a drug addiction, Indiana can be a great state to call home. The cost-of-living index score for the Hoosier State is 90.6, and housing prices are 21.7% below the national average. You’d also be close to major universities like Purdue and the University of Notre Dame.
Cost of Living Explained
To measure cost of living, researchers look at essential expenditures. These include things like housing, food, utilities, transportation, and healthcare. Cost of living doesn’t include “extras,” like the money Americans spend on entertainment, clothing, and hobbies.
Before You Move
While cost of living can account for a lot, it doesn’t paint a full picture of what life’s like in any given area. Before you pack your bags and call a moving truck destined for more affordable locales, there are a few other things worth considering.
Housing Availability
Housing costs might be far lower in Tennessee or Georgia than where you’re living now, but that doesn’t mean you’ll find a house easily. In states like Tennessee, where the population is growing fast, it might be hard to find a house that suits your needs in an area you want to live.
Average Salary
When the cost of living is lower, the average salary is typically lower too. For example, a police officer in the Seattle area, which is known for its high cost of living makes an average of $71,182 per year. In Jackson, Mississippi, police officers only make an average of $44,478 for the same job.
Exact Location
If you decide to move to a lower cost of living state, you’ll need to do some research on the exact location you want to live. Urban areas in states like Georgia or Alabama can be much more expensive than the state’s average, and they may have reduced housing availability.
Americans on the Move, Sort Of
If you live in a high cost of living city or state, it may seem like everyone around you is talking about moving somewhere cheaper. According to Business Insider, state-to-state moves are on the rise. However, Americans are actually moving far less now than we did historically.
The Traditional Move
After World War II, more Americans were moving, but they made relatively short moves, typically within the same state. These moves were to find the right house, be closer to a good job, or be near family. Today, people seem to be moving for different reasons.
Rise of Remote Work
In the last few years, remote work has increased significantly. By taking remote jobs, people can take advantage of good salaries while living in low cost of living areas. This may be why so many people are moving from expensive coastal cities in states like California to more affordable locales in places like Texas, Tennessee, and Florida.
Income Sorting
According to a report by CBS News, while some Americans seem to be seeking more affordable places to live, others are heading to the most expensive cities. In a phenomenon dubbed “income sorting,” the wealthiest Americans are heading to the coasts while middle-class and low-income Americans are moving to the heartland.
Why Live Where It’s More Expensive
Upper-income Americans aren’t moving to places like San Francisco, Seattle, and New York because they want to show off the size of their bank accounts. Instead, they’re often moving to these cities because they offer higher salaries and better education opportunities.
The High Price of the Coasts
Coastal cities are more expensive than other areas in part because of a lack of room to build. There’s a natural barrier, i.e. an ocean, that prevents construction past a certain point. That means housing is often in short supply and priced high.
The Haves and Have-Nots
Unfortunately, the income sorting trend has negative implications for the U.S. as a whole. As lower income Americans head inland, coastal cities are more likely to experience worker shortages. At the same time, inland cities may see less money going to needed resources like education as the richest among them head to the coasts.
10 U.S. Cities Where $100,000 Stretches the Furthest
$100,000 in annual income may sound like a lot to many Americans. But depending on where you live, that might as well be chump change. These are the cities where you can make the most of $100k.
10 U.S. Cities Where $100,000 Stretches the Furthest
Most to Least Expensive States To Retire
Are you hoping to settle down in a cheaper state during retirement? These are the states to consider and, equally important, those you’re better off avoiding.
Most to Least Expensive States to Retire Ranked From 1 to 50
