These 6 States Could Cut Your Living Costs in Half — But There’s One Major Catch
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
For Americans feeling squeezed by rising housing costs and higher everyday expenses, the idea of cutting their cost of living in half can sound almost mythical. Yet in a handful of U.S. states, households really can stretch the same income dramatically further.
Experts explained which states make this possible, but also why the math only works under specific conditions.
Mississippi: Where Housing Costs Alone Can Slash Your Budget
Mississippi consistently ranks as one of the least expensive states in the country because “housing is the dominant factor, often accounting for the majority of the overall savings,” said Josh Katz, CPA and founder of Universal Tax Professionals. For example, while Mississippi’s overall cost of living is 16.7% below average, its housing costs are about 34% lower, he noted.
This is followed by lower costs for groceries, transportation and healthcare. “These savings stem from a combination of lower land values, less population demand and different regulatory environments compared to coastal metros,” he said.
However, according to Ravi Parikh, CFO and managing director of Parikh Financial, “the savings are most dramatic only if you’re moving from a high-cost state.”
For example, if you move from a high-cost city like San Francisco, “you slash housing costs by 60% to 70%,” Parikh said. But if you move from Cleveland to Jackson, Mississippi, you save only 10% to 15%, since both are already below the national average.
Arkansas and Oklahoma: Cheaper Living If You Avoid the Hot Spots
Many affordable states are in the Midwest and South, where there is more land available for development, Katz said. Arkansas and Oklahoma offer below-average living costs thanks to inexpensive housing, cheaper everyday goods and lower demand overall. But the deepest savings tend to exist outside booming metros, where price growth has already begun to erase the affordability advantage.
These states have household costs that come in under the national average due to low housing costs, low taxes and inexpensive everyday goods, Parikh pointed out, though “the half-price claim usually applies to smaller towns, not booming metros.”
“Lower population density directly reduces competition for housing, which is a key price suppressant,” Katz added.
West Virginia: Low Prices That Persist
Unlike states that cycle in and out of affordability, West Virginia’s lower living costs “are anchored in fundamental economic and geographic factors,” Katz said. This includes lower median wages, economies centered on industries like agriculture or resource extraction and population trends that limit explosive growth.
West Virginia remains inexpensive relative to the nation because its price growth started from a much lower base, Katz said. “While prices have risen, the fundamental drivers have not changed at the same scale as in high-demand coastal markets.”
Missouri and Kansas: Where ‘Half-Price Living’ Is Most Visible
In parts of Missouri and Kansas, especially post-industrial cities and smaller metros, housing prices can feel shockingly low compared to coastal markets, according to Ben Mizes, president of Clever Real Estate.
Here, too, housing is the biggest cost saver. “The biggest savings are housing discounts, with the rest of the savings attributed to tax and utility discounts,” Mizes said.
Prices on basic living necessities are also lower.
The Major Catch: Income Compression Can Erase the Savings
Across nearly all low-cost states, the biggest trade-off is income. “While expenses fall, wages often do too,” Katz said. “The financial benefit can evaporate or reverse if you must take a significant pay cut.”
Hidden Costs That Surprise New Residents
Even in low-cost states, certain expenses tend to catch new residents off guard. These recurring costs can offset cheap housing if households don’t plan for them.
“People are often surprised by higher-than-expected costs for property taxes, utilities in older homes, transportation due to longer drives and specialized healthcare,” Katz pointed out.
Other surprises include “higher insurance premiums, fewer public services, longer commute distances or limited rental inventory in desirable areas,” according to Eddie Gravalese, founder and financial consultant at Edge Consultants.
Who Actually Wins by Moving To These States
The households that benefit most are those “who can move their high income or fixed income to a low-cost area,” Katz said. These include fully remote workers, retirees living on savings or Social Security and entrepreneurs whose business isn’t location dependent.
For them, relocation savings are usually only useful if an individual moves from a high-cost metro while earning remote income, Mizes concluded.
In the end, cutting your living costs in half is possible, but only if your income, location choice and expectations are aligned.
More From GOBankingRates
