If you’re looking for the best place to live on a budget, you’ll find that some states will let you spread your dollars further than others. Using data from the Missouri Economic Research and Information Center, GOBankingRates determined the cost-of-living index in each state compared to the overall national average. The study included costs associated with six categories: housing, utilities, groceries, healthcare, transportation and miscellaneous expenses.
Whether you’re pursuing a new career, looking for a cheap place to retire or simply seeking a change of scenery that won’t break the bank, consider what it will cost to get by in that state before you hire a mover.
Last updated: May 1, 2020
Alabama is the eighth-cheapest state in America — a jump from No. 12 in 2017. Utilities here are actually 9% more expensive than in the country as a whole, but everything else is cheaper — especially housing, which costs 27% less.
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The largest state in America comes with a cost of living that’s almost equally enormous — 31.3% above the national average, to be exact. In 2017, that number was a nearly identical 31.6%. Those numbers make Alaska — for the second straight year — the country’s sixth-worst state if you want your paycheck to stretch far.
Although it was smack in the middle of the list at No. 25 in 2017, Arizona is now among the 20 cheapest states in America. The cost of living there is 4.4% lower than in the country as a whole, with everything except groceries coming in under the national average.
Arkansas jumped from the fourth-cheapest state in the U.S. to No. 2. You can expect to pay 12.2% less there to maintain your lifestyle than the average American. The biggest savings are in housing, where the state’s average is 23% lower than the rest of the country.
Little Rock — the state’s capital — is one U.S. city where you can live comfortably on less than $50,000 annually.
In 2017, New York was the third-most expensive state in the country, but this year, California dethroned it thanks to a cost of living that’s 41% higher than the national average. Everything is more expensive in the Golden State, but at an astronomical 109.2% above the national average, housing is the real whopper.
In Colorado, the cost of living is 2.3% above the national average, but there are some wild swings in the state between the categories. Housing costs, for example, are 13.9% above average, but residents pay 17.3% less for utilities. Healthcare costs are 5.5% higher than average.
Connecticut residents got some relief in 2018 when the New England state fell two spots from seventh priciest in the country to ninth. In all, the cost of living is 25.7% higher there than in the rest of the country. Life is costlier than average across all categories — none more so than housing, which comes in at 56.3% above the national mean.
Delaware residents can expect to pay 2.9% more to live in the First State. Groceries are 8% more expensive, and miscellaneous expenses are 6.6% pricier. Housing, however, costs 1% less.
District of Columbia
The second-most expensive state in the country isn’t a state at all. The nation’s capital, Washington, D.C., has a cost of living that’s 55.7% higher than the national average. That’s up from the 49.2% average residents paid in 2017, when D.C. also took the title of second-priciest “state” in the country. Housing there costs nearly 154% more than it does in the country as a whole.
The cost of living in the Sunshine State is less than 1% lower than it is in the rest of the country. Predictably, most categories are about even with the national average, with transportation only costing 1.2% more and utilities costing 2.9% more.
Florida is also home to some of the best cities to own investment property.
Georgians enjoy a cost of living that’s 9.2% lower than the rest of the country. That’s down from 8.6% in 2017. The decrease makes Georgia the ninth-cheapest state in the U.S.
Hawaii is the most expensive state to live in America by a long shot for the second year in a row. This year, however, island residents can expect to pay an astronomical 88.3% more than the national average overall. That’s more than 20 percentage points higher than the 67.4% Hawaii residents suffered in 2017. Most of the pain can be traced to home purchases, which cost an astounding 201.7% more than average. And rent isn’t much of a bargain, either.
Idaho boasts a fairly cheap cost of living that’s 7.8% lower than the national average. In fact, everything is less expensive than average across the board with the exception of transportation, which is 8.5% above the country’s mean price.
Coming in at No. 25 is Illinois, which splits the list down the middle. Both healthcare and miscellaneous expenses are just about even with the national average, and utilities and grocery costs come in at under 3.9% and 3.8% respectively.
Indiana rounds out the top 10 cheapest states in America. Last year, however, the Hoosier State was the second-least expensive in the country. That eight-state leapfrog represents the biggest year-over-year increase of any state in the entire country.
The cost of living in Iowa is cheaper in every category, but they all come within 9 percentage points of the average — except for housing. In that category, Iowans pay nearly 20% less than Americans in general. The affordable cost of housing drags the overall cost of living down 8.7% below the national average.
Kansas residents spend about 9.8% less than the average American to get by, making it the seventh-cheapest state in the country. Although life is cheaper across the board, housing costs are a full 22.8% lower than average.
In 2017, Kentucky was the tenth-cheapest state in the country. But in a single year, the Appalachian State fell six places to No. 16. It’s still cheaper to live there across all categories covered except for miscellaneous expenses — but even those are just 0.6% more expensive than the national average.
Louisiana got cheaper over the course of the last year, dropping three places from No. 20 to No. 17. Housing is more than 12% less expensive than the national average.
In Maine, the cost of living is 13.6% higher than average. Residents there have to pay steep housing costs, which are 24.9% more than the national mean. At 10.5% higher than average, miscellaneous expenses aren’t cheap — but home insurance isn’t too bad.
For the second year in a row, Maryland is the eighth-most expensive state in America. The cost of living is 28.7% more expensive than the national average, thanks largely to an enormous housing bill that’s 83.1% higher than what the rest of the country can expect to pay.
Massachusetts clocks in as the fourth-most expensive state in the country, up from No. 5 in 2017. The cost of housing is 72.6% higher than in the rest of the nation, which is actually down from 75% the year prior.
Michiganders pay an average of 10.3% less than the average American for common living expenses. However, Michigan still moved from the third-least expensive state in 2017 to the fourth-cheapest in 2018.
In the Land of 10,000 Lakes, Minnesotans pay almost exactly the national average to live — 0.3% less, to be exact. The biggest break is housing, which costs 10.5% less. At a cost of 13.7% higher than the national average, however, healthcare is the most expensive category.
With a cost of living that is nearly 15% lower than the national average, Mississippi is the cheapest place to live in the U.S. for the second year in a row. Healthcare costs about 9% less than the national average, groceries are nearly 6% less and housing is a full 29.3% cheaper.
In 2018, Missouri became the sixth-cheapest state in America — but last year, the Show-Me State didn’t even crack the top 10. Housing there is 25.8% cheaper than the national average. In fact, only utilities cost more in Missouri than in the country as whole.
The Big Sky State has an overall cost of living that’s higher than the national average — but only by 0.4%. The state stays very close to the overall national average thanks to housing costs that are 22.5% cheaper than in the country as a whole.
One downside: your money won’t grow as fast here.
In Nebraska, the cost of living is 7.1% lower than the national average, making it one of the 15 cheapest states in America. Although every category is cheaper across the board, the biggest drop is in utilities, which cost 13.3% less than in the rest of the country.
If you want to live in Nevada, it will cost you 4.7% more than what the average American pays. The biggest expense is transportation, which costs 10.1% more than the national average. Miscellaneous expenses cost 6.7% more. The good news is that residents of Nevada enjoy utility bills that are 14.1% below the national average.
In New Hampshire, the cost of living is 15% higher than average. Utilities are the biggest drag — they come in a full 32% higher than in the country as a whole. At 16.9% higher than average, miscellaneous expenses aren’t cheap, either.
The biggest reason why the cost of living in the Garden State is 21.9% higher than the national average is housing, which costs 51.3% more than in the country as a whole. In fact, everything is more expensive in New Jersey, which only misses the top 10 most expensive states when you factor in Washington, D.C.
With a cost of living that’s more than 5% lower than the national average, New Mexico is one of the 20 cheapest states in the country. Utilities are more than 15% less expensive than average, and the two categories that top the national mean — transportation and healthcare — only go over by a little more than 1%.
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In 2017, it cost more to live in New York than any other state in the contiguous U.S., not counting Washington, D.C. In 2018, however, Empire State residents breathed a sigh of relief as New York moved back to No. 5. Most of the reason for the shift is due to housing, which costs 89.2% more than the national average, compared to 98.3% higher in 2017.
Healthcare costs in the Tar Heel State are 7.1% above the national average, but everything else comes in just under — everything, that is, except for housing. At 15.8% lower than America as a whole, housing there is significantly cheaper.
With a cost-of-living index that’s 0.3% lower than America as a whole, North Dakota is locked in a two-way tie for the title of last state to come in under the national average. Healthcare costs are high — 13.3% above average — but at nearly 15% below average, housing costs are relatively forgiving.
In Ohio, the cost of living is 7.7% cheaper than the country overall. Even so, transportation costs 1.5% more than average. Everything else is less expensive, but only by the smallest margins — except for housing, which comes with a steep discount of 23.2%.
In Oklahoma, the general cost of living is 10.8% lower than the national average, which accounts for the state’s drop from the fifth cheapest in the country in 2017 to third cheapest in 2018. The real savings, however, are in housing: Residents pay 24.8% less than the rest of the country.
Only Indiana climbed higher on the most-expensive list between 2017 and 2018 compared to Oregon. The Northwest state jumped from No. 39 to No. 45 during that time period, thanks to a current overall cost of living that’s 29.3% higher than the national average.
It’s 2% more expensive to live in Pennsylvania than in the country as a whole, with miscellaneous costs nearly mirroring the national average and housing costs mirroring it exactly. You’ll find yourself saving money on healthcare here, as it comes in 8.7% under the national average.
Rhode Island is the smallest state in the country, but at 23.6% above the national average, the cost of living there is one of the biggest. In fact, 2018 is the second consecutive year that the tiny New England state takes the title of the tenth-most expensive state in America.
In South Carolina, the cost of living is 0.5% lower than the national average, compared to 0.5% higher in 2017. Although housing costs 12.4% less, utilities cost 11.7% more than average.
South Dakotans enjoyed the largest decrease in overall living costs between 2017 and 2018 — the state dropped seven places from No. 34 to No. 27. Housing here is 10.2 percentage points above average, but miscellaneous expenses are a full 8% lower.
Residents of the Volunteer State see a cost of living that is 10.2% lower than the national average. Although that number didn’t change between 2017 and 2018, Tennessee is now among the top five cheapest states in the country, a claim it couldn’t make last year.
The overall cost of living in Texas is 8.8% lower than the national average, which puts the state just outside of America’s top 10 cheapest. Housing leads the way at 15.2% lower. Groceries, meanwhile, cost 9.8% less, and miscellaneous costs are 7% lower.
Oh yeah, and there’s no state income tax.
Utah moved five whole spots between 2017 and 2018. It was the country’s 17th-most expensive state in 2017. This year, however, it takes the title of No. 22 — but it’s still 4.3% cheaper there than in the country as a whole.
Vermont joins its New England neighbors with a high cost of living — 20.7% above average in this case. Housing tips the scales, costing nearly 47% more than the national mean price. Transportation costs 11.7% more, and utilities top the average by 19.8%.
With a cost of living that’s 2.2% higher than the national average, Virginia comes in at No. 33 on the list. That’s five places higher than 2017, when Virginia ranked No. 28.
The biggest burden in the pricey Northwest state of Washington is healthcare, which costs 18.5% more than in the country as a whole. At 16.4% above average, transportation costs aren’t much better. Only utilities are cheaper — they cost 6% less than the national average.
Although groceries cost 3.5% more than average in West Virginia and miscellaneous expenses are 2% higher, everything else in the state is cheaper. The biggest breaks are in housing and utilities, which cost 12.8% less and 11.2% less respectively.
Housing in Wisconsin costs 12.7% less than it does in the country as a whole. That’s a large part of the reason why the state’s overall cost of living is 3.8% less than the national average, even though healthcare costs 14% more and transportation costs 1.3% more.
Wyoming moved five places in the wrong direction. The sparsely populated Western state went from the 16th-cheapest state in 2017 to No. 21 in 2018. The cost of living there, however, is still 4.4% lower than in the country as a whole.
How the Cost of Living Varies in the United States
With a few exceptions, the cheapest states in America are concentrated in the South and Midwest. The most expensive states are on the West Coast, the Northeast and the District of Columbia. Overall, the top 30 states all fall below the national average.
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Methodology: GOBankingRates analyzed the cost of living in every state across America by examining six factors: 1) housing, 2) groceries, 3) utilities, 4) transportation, 5) healthcare and miscellaneous goods based on 2017 data (the most recent data available) from the Missouri Economic Research and Information Center. The U.S. average is 100 across all index categories so a number higher than 100 is above average in cost and a number below 100 is below average in cost.
About the Author
Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street’s investment community in New York City.