6 States To Consider If You Want To Thrive Financially in 2025

DMP / iStock.com

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

Relocating to a different state can have a significant impact on your finances. In Massachusetts, the most expensive state in the contiguous U.S. — second to Hawaii overall — residents pay an average of nearly $107,000 a year in cost-of-living expenditures. Compared to the least expensive state, Oklahoma, where the annual cost of living is around $63,000, the difference is almost 70% higher.

A variety of factors contribute to the financial environment you live in. While states with no income tax may seem attractive at first glance, Erika Kullberg, an attorney, personal finance expert and founder of Erika.com, points out that it’s important to look at the whole picture if you want to live in a place where your finances can get a meaningful boost.

What To Look For

“There is no one state that is easiest to thrive on financially,” Kullberg said. “A common misconception is that states with no state income tax are the easiest to get by in. You need to take the cost of housing, local taxes, groceries, gas and many other factors into consideration when deciding where to live.”

In lieu of an income tax, states may get that revenue via other means — or may lack in state-funded benefits like social services, education and infrastructure that may downgrade quality of life. Washington residents, for example, don’t pay income taxes, but get hit with some of the highest sales taxes in the country, at 9.23%. The state’s housing costs are also 27.8% higher than the national average.

While Texas and Wyoming are both income tax free, their property tax rates are at opposite ends of the scale, with Texas charging a high rate of around 1.69%– the sixth highest in the nation — Wyoming’s is just 0.61%, the ninth lowest.

But with the ever-evolving landscape of remote work, that has undoubtedly changed the equation for many who can take advantage of big city salaries that can travel across state borders. Pandemic-era migration patterns for remote workers have largely seen an exodus from expensive major metros to more affordable locales. According to the U.S. Career Institute, 36% of remote workers were planning a move last year.

“If you have a remote job with a high salary, you may find that moving to a state with no income tax can save you a pretty penny. However, many of these states are also home to very high cost of living areas,” Kullberg said. “If you earn a salary commensurate with the local cost of living, saving a bit on income taxes may not help you as much as someone who works for a corporation that pays big city salaries.”

The holy grail, Kullberg said, is finding a state with a low average cost of living that also doesn’t charge state income tax. So where might these unicorns be found? Read on for six states with the right conditions for a thriving financial picture, recommended by experts.

South Dakota

South Dakota has the fourth-lowest cost of living of any state.

“However, it offers something the rest of the top 10 can’t match: no income tax,” said Scott Leiberman, founder of Touchdown Money. “Move here, and you’ll keep all of your paycheck safe from state taxes.”

The state’s economy is primarily reliant on agriculture. With the beautiful Black Hills, Mount Rushmore and the Badlands National Park, tourism is also growing in the state.

• Annual expenditures: $67,422
• Median home price: ​​$311,866

Arkansas

Some states have aimed to attract remote workers by offering relocation packages as an incentive. Lieberman pointed out that in Arkansas, the cities of West Memphis, Fort Smith and Texarkana all offer relocation incentive packages, ranging from $1,000 to $17,000. They even throw in extras like college tuition discounts, symphony tickets and meals with city mayors. All of that is on top of Arkansas having the lowest cost of living in the nation.

“Texarkana also comes with an interesting quirk,” Lieberman said. “To entice people to live on the Arkansas side of Texarkana instead of income tax-free Texas, Arkansas exempts residents of Texarkana, Arkansas from state taxes.”

• Annual expenditures: $64,941
• Median home price: ​​$210,371

Oklahoma

“Tulsa is one of the pioneers of the relocation assistance program,” Lieberman said.

Launched in 2018, Tulsa’s incentive program offers $10,000 to those who apply and get approved. Program benefits also include perks like a 36-month free membership to a co-working space, wellness resources and networking events.

“Even if you don’t get assistance in Tulsa, Oklahoma City is one of the most affordable large cities in the nation. Costs are very reasonable in both cities, and you’ll find plenty to do in both,” Lieberman said.

• Annual expenditures: $62,898
• Median home price: ​​$208,910

Tennessee

Another state offering the golden ticket of no income tax and a low cost of living is Tennessee, said Michael Collins, CFA, founder and CEO of WinCap Financial. That, he said, “makes it an ideal state for financial stability.” The ninth cheapest state to live in, its cost of living is 9.7% lower than the national average.

“It also offers various tax incentives for businesses and individuals, such as tax credits for job creation and relocation expenses,” Collins said. “The state also has a thriving economy with industries in healthcare, manufacturing and tourism.”

Add to all that a relatively mild climate, good hospitals and universities, natural beauty, plus thriving music and cultural life, and you might just be packing your bags. 

• Annual expenditures: $65,889
• Median home price: ​​$326,084

Texas

Texas is another state checking both boxes of no state income tax and a lower cost of living. In addition, the job market is strong, with a diverse range of industries including energy, technology and agriculture, Collins said. “There are also several business-friendly policies in place to attract new businesses and stimulate economic growth,” he said.

The overall cost of living in Texas is 7.3% lower than the national average, with housing costs a whopping 16.9% lower. Healthcare costs are 5.1% lower, and groceries cost 4.3% less.

• Annual expenditures: $67,640
• Median home price: ​​$306,841

Georgia

Collins also recommended Georgia for its solid reputation as a business-friendly state with competitive taxes for both businesses and individuals.

“With its growing economy in sectors like manufacturing, film production, logistics and technology, there are plenty of job opportunities available that offer high salaries to help you achieve financial success,” he said.

Georgia’s cost of living is 9.2% lower than the rest of the country, making it the 11th cheapest state in the U.S. Housing costs nearly 22% less than the rest of the country, and other expenses across the board, including healthcare, transportation and utilities, are lower than the national average.

• Annual expenditures: $66,254 
• Median home price: ​​$333,862

Share This Article: