Making a livable wage can be a lifelong struggle. The mounting costs of housing and basic necessities can add up quickly, leaving you scraping to make ends meet rather than saving and building wealth. How far your money goes depends on where you live, too.
That’s why GOBankingRates conducted a study to identify the annual living wage needed to live comfortably in each of the 50 states, and it revealed that even if you’re living comfortably in one region, you could be living paycheck to paycheck in another.
Not to be confused with the minimum wage, we define the “living wage” as the income you need to cover necessary and discretionary expenses while still contributing to savings. Using data from the Bureau of Labor Statistics and the 50/30/20 budgeting rule — that allocates 50% of your income to necessities, 30% to discretionary expenses and 20% to savings — the study found what you would need to earn to comfortably cover your basic needs while still saving for the future. But the results reveal that the average salary in your state might not be enough to do just that.
- Annual Living Wage: $53,804
Alabama is among the least expensive places in America to live — in part thanks to median housing costs of just $8,684 a year — but earning a median wage would still leave inhabitants of the Yellow Hammer State $1,769 short of a living wage.
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- Annual Living Wage: $85,083
Life in the last frontier state comes at a cost, with the total price of necessities in Alaska clearing more than $42,500 a year. Housing, groceries, utilities, healthcare and transportation in Alaska all cost well above the median price in the U.S.
- Annual Living Wage: $68,706
Arizona’s cost of living is 6.7% above the national average. Only healthcare costs are less than the average. Here the difference between the living wage and the actual median income is $7,177.
- Annual Living Wage: $54,359
Arkansas is one of the states where your dollar will stretch far with a cost of living that’s more than 10% under the national average. Many residents of the Razorback State, though, are still struggling to hit the annual living wage mark as the average household income is just $49,475.
- Annual Living Wage: $94,778
The nation’s most populous state is also among the third most expensive, with a living wage translating to nearly six figures if you’re planning on following the 50/30/20 rule. Even for a state with an average annual income of $78,672, those are costs that are hard to bear.
- Annual Living Wage: $65,784
Residents of the Rocky Mountain State actually have some money to spare. With a median income of $75,231, the average Coloradan can bank $9,447 at the end of the year.
- Annual Living Wage: $76,014
Connecticut’s relatively high cost of living means you would need to earn nearly $80,000 to follow the 50/30/20 formula. A big chunk of that ends up going to housing, with an average annual bill of $16,423 for Connecticut residents.
- Annual Living Wage: $67,562
While Delaware residents enjoy overall costs that generally aren’t too far above the national average, they are paying $300 more for their groceries than the average American, translating to an annual bill of $5,243.
- Annual Living Wage: $65,762
Despite a high cost of living in Florida, the median income in the Sunshine State isn’t quite enough to make it easy on the average resident, who earns $57,703 a year. That leaves a gap of nearly $8,059 between the typical annual salary and a living wage. Still, Florida is considered one the best states for the middle class.
- Annual Living Wage: $54,564
Georgians have an easier time financially than residents of some other states. Expenses are quite a bit below the national average and their median income is above the living wage at $61,224.
- Annual Living Wage: $132,912
Hawaii is the most expensive state in the country, mostly due to housing costs that run more than triple the national average at nearly $41,000 a year. As such, despite a median income of $83,173 a year, the typical Hawaiian is still nearly $50,000 short of a living wage — the largest such gap in this study.
- Annual Living Wage: $63,825
Idaho is another state that comes in under the national average for its cost of living, but it has a median income of $58,915. The annual utilities cost in Idaho is among the lowest in the study.
- Annual Living Wage: $58,571
Not only are costs lower than the national average in Illinois, but residents there are also earning a median salary of $68,428. That puts the average income $9,857 above the living wage.
- Annual Living Wage: $56,411
Indiana is one of the cheaper states to live in, thanks to costs of living that are below the national average in each category in the study, except for utilities, which are less than $40 above.
- Annual Living Wage: $54,901
Iowa can boast relatively low costs of living — including housing costs that are almost $3,900 below the national average at just $8,760 per annum. The median salary is $61,836, almost $7,000 above the annual living wage.
- Annual Living Wage: $54,601
Kansas wraps up a quartet of Midwestern states where low median salaries are offset by a low cost of living and puts a living wage in reach for many. With a median salary of $61,091, the typical Jayhawk earns $6,490 more than the living wage in the state.
- Annual Living Wage: $55,670
While Kentucky has a low cost of living that’s largely in line with states such as Indiana, Illinois and Iowa, the median salary of just $52,238 leaves a $3,432 gap to a living wage despite below-average costs.
- Annual Living Wage: $59,040
Much like Kentucky, Louisiana has low costs but also lower wages. A median salary in the state is just $50,800, so while residents might be paying about $1,700 less for housing than the average American, they’re also more likely to be struggling to afford it.
- Annual Living Wage: $73,200
Residents of Maine are much more likely to be struggling with higher costs than the rest of the country. The annual living wage of over $73,000 is among the highest in the country, but the median income there is just $59,489 That leaves a $13,711 gap between a median salary and a living wage
- Annual Living Wage: $82,475
Maryland’s living wage of nearly $83,000 is among the highest in the country. Although Maryland is one of the nation’s most expensive places to live, the median annual salary of $87,063 covers the living wage.
- Annual Living Wage: $86,480
Massachusetts residents can expect that the cost of their basic necessities will run a full third higher than the national average when totaled, leaving a sky-high living wage of $86,480. And while it’s a state of high earners, the average annual housing cost of $21,011 keeps most residents of the Bay State from meeting the living wage.
- Annual Living Wage: $56,401
The median income in Michigan is $59,234. Average housing costs of just $9,806 a year help Michigan residents meet the living wage.
- Annual Living Wage: $61,039
The term “Minnesota Nice” generally refers to the state’s cordial residents, but it could also be describing the nexus of decent wages and affordable costs in the state. While cost of living there is slightly higher than the national average, the median annual salary of $73,382 leaves Minnesotans with an excess of $12,343 a year above the living wage.
- Annual Living Wage: $51,754
Mississippi has the lowest cost of living in the country. But before anyone starts thinking about making a big purchase, know it also has the lowest median income in the nation at just over $46,511 — that results in a gap of more than $5,000.
- Annual Living Wage: $57,115
Residents of the Show Me State have a median annual income of $57,290 — which just covers their living wage, and in general, it’s a state where a dollar goes farther. Missouri is one of the 10 least-expensive places to live.
- Annual Living Wage: $66,957
Some residents of the Big Sky State might grumble that it could just as easily be called the “Big Cost of Living State,” with average annual housing costs of $14,658. There’s nearly an $11,000 gap between the median annual income of $56,539 a year and the average annual living wage.
- Annual Living Wage: $58,930
While the median annual salary of $63,015 might mean that the typical Cornhusker isn’t exactly rolling in the dough, it’s still enough to exceed the annual living wage costs.
- Annual Living Wage: $68,639
Nevada is a relatively expensive state where residents don’t appear to be earning enough to cover costs. With an annual median income of $62,043, the average resident falls close to $8,600 short of the living wage.
- Annual Living Wage: $72,235
While the cost of living in New Hampshire is high, the state also has a lot of residents with higher incomes, leading to a median salary of $77,923 a year. The resulting gap between the two is $5,688.
- Annual Living Wage: $72,773
The annual cost of living in the Garden State is $36,386, but that also comes with higher wages in the state. The median income is a whopping $85,245 and enough to surpass the living wage.
- Annual Living Wage: $59,858
It doesn’t cost as much to get by in New Mexico, but the state’s very low median income — just $51,243 — means most residents are still probably struggling to make ends meet. That median salary is about $8,615 short of a living wage.
- Annual Living Wage: $101,995
After Hawaii, no state is as expensive to call home as the Empire State. And while the median salary is a healthy $71,117, the $30,878 gap between paychecks and a living wage trails only Hawaii.
- Annual Living Wage: $60,344
Tar Heel State residents have significantly lower housing costs than most — paying about $11,230 a year on average. However, despite this, a low median income in the state leaves the typical resident earning $3,702 less than they need for a living wage.
- Annual Living Wage: $62,555
The annual cost of living in North Dakota is just slightly above the national average, and with a median annual salary of $65,315 a year, the state’s typical resident earns almost $2,800 above the living wage.
- Annual Living Wage: $56,194
Ohioans come out just about even in the survey. The median income for the Buckeye State is $58,116, meaning the average resident is about $1,922 short of what they need by year’s end.
- Annual Living Wage: $53,270
Housing costs in Oklahoma are very low — just $8,672 on average — contributing to low overall costs. With a median income of $53,840 the average resident will come up about $570 short of the living wage.
- Annual Living Wage: $82,926
While Hawaii’s astronomical gap of more than $50,000 between its median salary and its living wage is No. 1, Oregon’s gap is pretty sizable, at $17,259. The housing cost is one of the biggest reasons, with the average Oregonian needing more than $19,498 a year for a place to live.
- Annual Living Wage: $61,707
Pennsylvania has housing costs that are just above the national average at $10,776 a year. And the median salary of $63,627 in the Keystone State is almost $2,000 more than the living wage.
- Annual Living Wage: $71,334
Unfortunately for Rhode Islanders, living in the smallest state carries a big price. Housing costs there are higher than the national average, costing the typical resident a tick below $15,074 a year. However, the median salary exceeds the living wage by $1,029.
- Annual Living Wage: $58,370
While South Carolina falls below the national average when it comes to living wage, the median annual salary in the Palmetto State is low enough that a living wage is still about $3,500 higher than what the average South Carolinian makes.
- Annual Living Wage: $60,683
The average annual housing costs in South Dakota of $11,823 are $781 lower than the national average. With a median income of $59,896 residents are $787 short of a living wage, on average.
- Annual Living Wage: $55,862
The gap between the median income of $54,833 and the $55,862 living wage in Tennessee is $1,029, but that’s driven more by lower wages than higher costs. The costs of housing and every other category considered in the survey are lower than the national average in Tennessee.
- Annual Living Wage: $58,155
With a median income of $63,826 in the state, many Texans’ earnings exceed the annual living wage. That’s helped by average housing costs of less than $10,726 a year.
- Annual Living Wage: $65,391
A median income of $74,197 in the Beehive State makes Utah the state with the highest positive gap between living wage and median income — a total of almost $9,000 a year.
- Annual Living Wage: $78,561
Living in New England can get expensive, and the Green Mountain State is an example of this. With housing prices almost $5,000 above the national average, it costs $17,280 a year to live in Vermont. With a median income of $63,477, Vermont residents fall well below earning the annual living wage for the state.
- Annual Living Wage: $65,698
While the cost of living is slightly higher than the national average in Virginia, the state’s high earning power helps to make it an affordable place to live. The median income in Virginia is $76,398.
- Annual Living Wage: $73,465
While life in Washington is pretty expensive when compared to the rest of the country, salaries are high as well. With the median income in the state reaching $77,006, residents have $3,541 left.
- Annual Living Wage: $57,139
West Virginia’s median annual salary of $48,037 is one of just a few that earn less than $50,000 in the survey. So, while the cost of living there is relatively low, a living wage is still $9,102 more than the typical salary.
- Annual Living Wage: $61,526
Wisconsin is just about even when comparing the living wage and the median income. With a median salary of $63,293, the average resident of the Badger State is in a relatively good financial spot.
- Annual Living Wage: $59,735
Wyoming is one of a few states where income exceeds the living wage. With a median income of $65,304 the average Wyoming resident has enough to get by.
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Methodology: GOBankingRates surveyed annual living expenses in all 50 states, using the 2020 Consumer Expenditure Survey (latest available) data from the Bureau of Labor Statistics. The itemized costs of living evaluated were housing, groceries, utilities, healthcare and transportation, collectively termed “necessities.” Based on each state’s respective cost of living index for each category, sourced from the Missouri Economic Research and Information Center’s 2022 Q1 Cost of Living Data Series, the study calculated the annual cost of each necessity and summed them up to find total annual expenditure on necessities. Using the 50-30-20 budget rule, which allocates 50% of income for necessities, the study doubled the total annual expenditure on necessities in order to determine the “living wage” in each state. “Living wage” is defined as the income required to be able to cover 50% necessities, 30% discretionary/luxury spending and 20% for savings. GOBankinRates also found the median household income of each state from the 2020 American Community Survey and compared the difference between the living wage and median income of each state. All data was collected on and up to date as of July 5, 2022.