Discovering the Most Affordable State to Live in the US: A Comprehensive Guide

When it comes to affordable living in the United States, the question of which state is the cheapest to live in often arises. With rising costs of living and expenses, many individuals and families are looking for places where they can stretch their dollar further. In this comprehensive guide, we will explore the various factors that contribute to the affordability of a state and uncover which one reigns supreme as the most budget-friendly place to call home. From housing and transportation to healthcare and taxes, we will delve into the intricacies of each state’s cost of living and reveal which one offers the most bang for your buck. So, whether you’re a first-time homebuyer or simply looking to save a few dollars, join us as we embark on a journey to discover the most affordable state to live in the US.

Factors to Consider When Determining the Cheapest State to Live In

Cost of Housing

When it comes to determining the most affordable state to live in, the cost of housing is one of the most important factors to consider. The median home prices by state can vary greatly, and it’s important to compare rent vs. ownership costs to determine which option is more affordable.

Median Home Prices by State

The median home prices by state can vary greatly, with some states having much higher prices than others. For example, California has a median home price of over $600,000, while West Virginia has a median home price of around $100,000. Understanding the median home prices in each state can help you determine which states are more affordable for homeownership.

Rent vs. Ownership Costs

In addition to median home prices, it’s important to consider the cost of renting versus owning a home. While owning a home may be more expensive in some states, the cost of renting may be even higher. It’s important to compare the costs of renting and owning a home in each state to determine which option is more affordable.

It’s also important to consider the cost of utilities, property taxes, and maintenance costs when determining the overall cost of housing in each state. By considering all of these factors, you can get a better understanding of the true cost of housing in each state and determine which state is the most affordable for you.

Taxes

When it comes to determining the most affordable state to live in, taxes play a significant role. Understanding the various tax rates in each state can help you make an informed decision about where to relocate. Here are some key aspects to consider:

State Income Tax Rates

State income tax rates vary widely across the United States. Some states have a flat rate, while others have a progressive rate structure. As of my knowledge cutoff in September 2021, the following were the state income tax rates for the top marginal rates:

Alabama: 5%
Alaska: 0%
Arizona: 4.5%
Arkansas: 6.6%
California: 13.3%
Colorado: 4.63%
Connecticut: 6.99%
Delaware: 6.6%
Florida: 0%
Georgia: 5.75%
Hawaii: 11%
Idaho: 7.4%
Illinois: 4.95%
Indiana: 3.4%
Iowa: 8.92%
Kansas: 5.7%
Kentucky: 5.8%
Louisiana: 2.81%
Maine: 7.15%
Maryland: 5.75%
Massachusetts: 5.05%
Michigan: 4.25%
Minnesota: 9.8%
Mississippi: 5.05%
Missouri: 5.4%
Montana: 6.75%
Nebraska: 6.84%
Nevada: 6.85%
New Hampshire: 5.0%
New Jersey: 8.97%
New Mexico: 5.9%
New York: 8.82%
North Carolina: 5.25%
North Dakota: 5.04%
Ohio: 4.797%
Oklahoma: 5.0%
Oregon: 9.9%
Pennsylvania: 3.7%
Rhode Island: 5.0%
South Carolina: 7.0%
South Dakota: 0%
Tennessee: 1%
Texas: 0%
Utah: 5.0%
Vermont: 8.95%
Virginia: 5.75%
Washington: 0%
West Virginia: 6.5%
Wisconsin: 7.65%
Wyoming: 0%

Property Tax Rates

Property tax rates also vary significantly from state to state. These taxes are levied on real estate by local governments and are typically used to fund various local government services such as schools, police and fire departments, and infrastructure improvements. As of my knowledge cutoff in September 2021, the following were the property tax rates for the average homeowner:

Alabama: $753
Alaska: $1,561
Arizona: $1,428
Arkansas: $1,065
California: $2,821
Colorado: $1,459
Connecticut: $2,222
Delaware: $1,368
Florida: $1,367
Georgia: $1,238
Hawaii: $1,611
Idaho: $1,283
Illinois: $2,380
Indiana: $1,138
Iowa: $1,471
Kansas: $1,383
Kentucky: $1,341
Louisiana: $1,134
Maine: $1,639
Maryland: $2,417
Massachusetts: $2,343
Michigan: $1,511
Minnesota: $1,855
Mississippi: $830
Missouri: $1,144
Montana: $1,532
Nebraska: $1,649
Nevada: $1,267
New Hampshire: $4,162
New Jersey: $3,212
New Mexico: $1,269
New York: $2,717
North Carolina: $1,076
North Dakota: $1,187
Ohio: $1,435
Oklahoma: $1,160
Oregon: $1,485
Pennsylvania: $2,055
Rhode Island: $2,497
South Carolina: $1,239
South Dakota: $1,086
Tennessee: $1,114
Texas: $2,109
Utah: $1,078
Vermont: $2,010
Virginia: $1,130
Washington: $1,461
West Virginia: $835
**Wisconsin:

Utilities and Transportation Costs

When determining the cheapest state to live in, it is important to consider the average monthly bills for utilities and transportation. These costs can vary greatly from state to state and can have a significant impact on the overall cost of living.

Average Monthly Bills

The average monthly bills for utilities and transportation can vary greatly depending on the state. For example, in states like Louisiana and Mississippi, the average monthly cost for utilities is around $150, while in states like Hawaii and California, the average monthly cost for utilities is around $200. Similarly, the average monthly cost for transportation can vary greatly depending on the state. In states with high public transportation availability and affordability, such as New York and Massachusetts, the average monthly cost for transportation is around $150, while in states with low public transportation availability and affordability, such as Texas and Florida, the average monthly cost for transportation is around $200.

Public Transportation Availability and Cost

Public transportation availability and cost is another important factor to consider when determining the cheapest state to live in. Some states have extensive public transportation systems that are affordable and convenient, while others have limited or expensive public transportation options. For example, in states like New York and Massachusetts, public transportation is widely available and affordable, with an average monthly cost of around $50. In contrast, in states like Texas and Florida, public transportation is limited and expensive, with an average monthly cost of around $100.

Overall, when determining the cheapest state to live in, it is important to consider the average monthly bills for utilities and transportation, as well as the availability and cost of public transportation. By considering these factors, you can make an informed decision about the best state to live in based on your budget and lifestyle.

Healthcare Costs

When considering the most affordable state to live in, healthcare costs play a significant role in determining the overall cost of living. In the United States, healthcare costs can vary significantly depending on the state you choose to reside in. The following factors should be considered when evaluating healthcare costs:

Health Insurance Premiums

Health insurance premiums refer to the amount of money paid by individuals or employers to maintain health insurance coverage. These premiums can vary widely depending on the state and the type of health insurance plan selected. For instance, states with higher population densities tend to have higher health insurance premiums due to increased demand for healthcare services.

In addition, some states have implemented Medicaid expansion, which has resulted in lower health insurance premiums for low-income residents. As of 2021, 38 states and the District of Columbia have expanded Medicaid under the Affordable Care Act (ACA), while 12 states have not yet expanded Medicaid.

Access to Affordable Healthcare Services

Access to affordable healthcare services is another critical factor to consider when evaluating healthcare costs. Some states have a higher concentration of healthcare providers and facilities, which can result in lower costs for residents. In contrast, states with fewer healthcare providers may have higher costs due to limited competition.

Additionally, the quality of healthcare services can vary by state, which can impact overall healthcare costs. For example, states with higher-rated healthcare systems may have lower costs due to better patient outcomes and more efficient care delivery.

Overall, healthcare costs are an essential factor to consider when determining the most affordable state to live in. By evaluating health insurance premiums and access to affordable healthcare services, individuals can make informed decisions about where to reside based on their healthcare needs and financial constraints.

Employment Opportunities and Wages

Unemployment Rates

Unemployment rates can provide valuable insight into the affordability of a state. Generally, states with lower unemployment rates tend to have a stronger economy and higher wages. Therefore, it’s important to consider the unemployment rate when determining the cheapest state to live in. A state with a low unemployment rate indicates a healthy job market, which can lead to better employment opportunities and higher wages.

Average Salaries by Occupation

Average salaries by occupation can also be a helpful factor to consider when determining the cheapest state to live in. Some states have higher average salaries for certain occupations than others, which can impact the overall cost of living. For example, states with a high concentration of tech companies may have higher average salaries for software engineers, making it more affordable to live there. On the other hand, states with a lower concentration of tech companies may have lower average salaries for software engineers, making it more challenging to afford living expenses.

Additionally, it’s important to consider the cost of living index for each state. The cost of living index takes into account factors such as housing, transportation, food, and utilities, and provides a score that indicates the overall cost of living in a particular state. States with a lower cost of living index score tend to be more affordable, while states with a higher cost of living index score tend to be more expensive.

By considering factors such as unemployment rates, average salaries by occupation, and the cost of living index, individuals can gain a better understanding of the most affordable state to live in the US.

Analyzing the Data: The Top Contenders for the Cheapest State to Live In

State #1: Mississippi

Pros

Low Cost of Living: Mississippi boasts a low cost of living index of 82.5, significantly lower than the national average of 100. This means that residents of Mississippi can enjoy a higher standard of living at a lower cost than the rest of the United States.
Affordable Housing: Housing costs in Mississippi are particularly affordable, with the median home value at $131,800, which is well below the national median of $269,000. Additionally, the median rent in Mississippi is $814 per month, which is also significantly lower than the national median of $1,023.
Low Taxes: Mississippi has a state income tax rate of 5%, which is one of the lowest in the country. This helps to keep taxes low for residents and make the state even more affordable.
Rich Culture: Mississippi is known for its rich cultural heritage, with a unique blend of Southern, African American, and Native American influences. Residents can enjoy a variety of cultural events, museums, and historical sites throughout the state.

Cons

Limited Job Opportunities: Mississippi has a relatively high unemployment rate of 6.3%, which is higher than the national average of 3.8%. This can make it difficult for some residents to find stable employment, particularly in certain industries.
Poor Healthcare: Mississippi ranks 49th in the country for healthcare quality, with low ratings for access to care, affordability, and overall quality of care. This can be a concern for residents who may need to rely on medical services.
High Poverty Rates: Mississippi has one of the highest poverty rates in the country, with 19.9% of residents living below the poverty line. This can create challenges for those who are struggling to make ends meet.
Education: While Mississippi has made improvements in recent years, it still ranks 49th in the country for education, with low test scores and high dropout rates. This can be a concern for families who are looking for quality education options for their children.

State #2: Arkansas

Low Cost of Living: Arkansas boasts a relatively low cost of living compared to the national average, making it an attractive option for those seeking affordable housing and living expenses.
Affordable Healthcare: The state’s healthcare costs are also below the national average, providing residents with access to more affordable medical services and treatments.
Vibrant Culture: Arkansas offers a rich cultural experience, with a diverse range of festivals, events, and attractions that showcase the state’s unique history and heritage.
Abundant Natural Resources: Arkansas is home to numerous natural resources, including forests, lakes, and hot springs, providing residents with ample opportunities for outdoor recreation and adventure.
Strong Economic Growth: Despite its affordability, Arkansas has experienced strong economic growth in recent years, with a diverse range of industries, including technology, manufacturing, and agriculture, contributing to the state’s prosperity.
Limited Public Transportation: Public transportation options are limited in Arkansas, making it necessary for residents to rely on personal vehicles for transportation, which can be a drawback for those who prefer alternative modes of transportation.
Limited Job Opportunities in Some Areas: While Arkansas has experienced overall economic growth, some areas of the state may still struggle with limited job opportunities, particularly in rural regions.
Weather: The state’s climate can be challenging, with hot summers and cold winters, which may not be ideal for everyone.
Education: While Arkansas has made significant strides in improving its education system, it still lags behind some other states in terms of quality and access to resources.
High Crime Rates in Some Areas: Like many states, Arkansas has areas with higher crime rates, which may be a concern for some potential residents.

State #3: Oklahoma

Affordable Housing: The average home price in Oklahoma is significantly lower than the national average, making it an attractive option for those looking to purchase a home without breaking the bank.
Low Cost of Living: Oklahoma’s overall cost of living is also relatively low, with utilities, transportation, and healthcare costs all below the national average.
Thriving Job Market: Despite being a relatively small state, Oklahoma has a diverse and thriving economy, with a strong presence in sectors such as energy, healthcare, and technology. This means that there are plenty of job opportunities available for those looking to work and live in the state.
Vibrant Culture: Oklahoma has a rich cultural heritage, with a mix of Native American, African American, and European American influences. The state is home to a number of museums, art galleries, and cultural festivals, making it a great place for those who enjoy exploring different cultures and traditions.
Limited Public Transportation: Oklahoma City, the state’s largest city, has a limited public transportation system, which can make it difficult for those without a car to get around.
High Crime Rates: Like many states, Oklahoma has its share of crime, with some areas experiencing higher rates of violent crime than others. It’s important to research specific neighborhoods and cities before making a decision on where to live.
Seasonal Weather: Oklahoma experiences extreme weather conditions, including hot summers and cold winters. This can be a pro or a con, depending on personal preferences.
Limited Access to Higher Education: While Oklahoma has a number of excellent colleges and universities, some may find that there are limited options for higher education in certain fields or that the cost of attending school is higher than in other states.

State #4: Missouri

Missouri boasts a low cost of living, with affordable housing and utilities.
The state has a diverse economy, with strong industries in agriculture, manufacturing, and healthcare.
Missouri is home to several top-ranked colleges and universities, providing access to quality education.
The state offers a range of recreational activities, from hiking and camping to cultural attractions.
Missouri has a relatively high crime rate compared to other states.
The state’s healthcare system is ranked below average, with limited access to care in some areas.
The job market in Missouri is somewhat limited, with few high-paying opportunities.
Missouri’s climate can be hot and humid in the summer and cold in the winter.

State #5: Kentucky

Low Cost of Living: Kentucky is known for its affordable cost of living, making it an attractive option for those looking to stretch their budget. According to the Council for Community and Economic Research, the cost of living in Kentucky is 12.3% lower than the national average.
Affordable Housing: The median home value in Kentucky is $124,500, which is significantly lower than the national median of $274,600, according to Zillow. Additionally, the median rent in Kentucky is $838, which is also lower than the national median of $1,098.
Thriving Cities: Kentucky has several cities that offer great affordability without sacrificing amenities. For example, Louisville has a cost of living that is 7.7% lower than the national average, and it boasts a thriving food and drink scene, as well as plenty of outdoor recreation opportunities.
Limited Job Opportunities: While Kentucky has a low cost of living, it also has a relatively low median household income of $50,603, according to the U.S. Census Bureau. This can make it difficult for residents to afford basic necessities, especially in areas where job opportunities are limited.
Healthcare Access: Kentucky has historically struggled with healthcare access, particularly in rural areas. While the state has made progress in recent years, some residents may still face challenges in accessing affordable healthcare.
Weather: Kentucky experiences a four-season climate, which can be appealing to some. However, the state is also prone to extreme weather events, such as tornadoes and flooding, which can be dangerous and disruptive to daily life.

State #6: West Virginia

Affordable Housing: The average home value in West Virginia is $115,000, which is significantly lower than the national average of $255,000.
Low Cost of Living: The cost of living index in West Virginia is 89.7, which is much lower than the national average of 100. This means that the state’s residents pay less for groceries, healthcare, and other essential expenses.
Beautiful Natural Scenery: West Virginia is known for its stunning natural beauty, including the Appalachian Mountains, forests, and rivers. The state offers a wide range of outdoor activities, such as hiking, fishing, and white-water rafting.
Strong Sense of Community: West Virginia has a tight-knit community where neighbors know each other and look out for one another. This can make it a great place to raise a family and feel connected to others.
Limited Job Opportunities: The state’s economy is largely based on coal mining, manufacturing, and agriculture, which can limit job opportunities in other sectors. However, the state is working to diversify its economy and create new jobs in industries such as technology and tourism.
Healthcare Access: Some areas of West Virginia have limited access to healthcare services, particularly in rural areas. However, the state has been working to improve access to healthcare through initiatives such as telemedicine and rural health clinics.
Transportation Challenges: Some parts of West Virginia can be difficult to access due to the state’s mountainous terrain and winding roads. This can make it challenging to travel to certain areas, particularly during inclement weather.

Overall, West Virginia offers a high quality of life at an affordable price. While there are some challenges to consider, the state’s strong sense of community and natural beauty make it a great option for those looking for an affordable place to live in the US.

State #7: Alabama

Affordable cost of living: Alabama boasts a relatively low cost of living compared to other states in the US. Housing, groceries, and transportation costs are all significantly lower than the national average.
Thriving job market: Alabama has a strong economy, with a diverse range of industries including manufacturing, healthcare, and technology. This means that there are plenty of job opportunities available for those looking to move to the state.
Mild climate: Alabama enjoys a mild climate, with temperatures rarely dropping below freezing in the winter and summers being relatively comfortable. This makes it an attractive option for those who enjoy outdoor activities year-round.
Rich culture and history: Alabama has a rich history and culture, with plenty of museums, historical sites, and cultural events to explore. From the Civil Rights Museum in Montgomery to the Gulf Shores Beaches, there is something for everyone in Alabama.
Limited public transportation: While Alabama has a relatively low cost of living, public transportation options are limited. This can make it difficult for those who do not have access to a car to get around the state.
Healthcare access: While Alabama has a strong healthcare industry, access to healthcare can be limited in some areas of the state. It is important to research healthcare options before moving to Alabama.
High crime rates in some areas: Like many states, Alabama has areas with high crime rates. It is important to research crime rates in specific areas before moving to Alabama.
Natural disasters: Alabama is prone to natural disasters such as tornadoes and hurricanes. It is important to consider this when deciding whether or not to move to the state.

State #8: Louisiana

Louisiana, situated in the southern region of the United States, is known for its rich culture, diverse landscape, and affordable cost of living. The state offers a variety of advantages that make it an attractive option for individuals seeking a budget-friendly lifestyle.

Low Housing Costs: Louisiana is known for having relatively low housing costs compared to other states. This is primarily due to the abundance of affordable housing options, particularly in smaller cities and rural areas.
Low Taxes: Louisiana has a competitive tax climate, with no state income tax and low property tax rates. This allows residents to keep more of their hard-earned money, making it easier to afford daily expenses and save for the future.
Affordable Healthcare: Louisiana’s healthcare system is designed to provide accessible and affordable care to its residents. Medicaid expansion and the availability of affordable health insurance plans contribute to the state’s overall affordability.
Low Utility Costs: Energy costs in Louisiana are generally lower than the national average, providing a financial relief for households. Residents benefit from the state’s ample natural resources, including hydroelectric power and abundant natural gas reserves.

While Louisiana offers numerous advantages in terms of affordability, there are some factors to consider before making the decision to move to the state.

Reliance on Industries: Louisiana’s economy is heavily dependent on the oil and gas industry, as well as agriculture. As a result, the state’s economy can be vulnerable to fluctuations in these sectors, which may impact job availability and overall stability.
Below Average Education: Louisiana’s education system ranks below the national average, which may be a concern for families with children. However, there are still excellent schools and institutions of higher learning within the state, offering quality education options.
High Crime Rates: Certain areas of Louisiana have higher crime rates compared to the national average. Prospective residents should carefully research and consider the safety of specific neighborhoods before making a decision.
Natural Disasters: Louisiana is prone to natural disasters, such as hurricanes and floods, which can impact the state’s infrastructure and disrupt daily life. It is essential to weigh the risks associated with living in a state vulnerable to natural disasters.

State #9: Kansas

Affordable housing market with lower median home prices compared to the national average.
Low cost of living, including utilities, transportation, and healthcare.
A stable job market with opportunities in industries such as agriculture, manufacturing, and technology.
Access to quality education with several universities and colleges in the state.
A mild climate with four distinct seasons, providing a variety of outdoor activities throughout the year.
Limited public transportation options, making a car a necessity for daily commutes.
Higher crime rates in some areas compared to other states on this list.
Lack of cultural and entertainment options in certain regions of the state.
Potential for extreme weather conditions, including tornadoes and droughts.
Limited access to certain amenities and services in rural areas.

State #10: Indiana

Affordable Housing: Indiana is known for its relatively low housing costs, making it an attractive option for those looking to save on living expenses. According to data from the National Association of Realtors, the median home value in Indiana is approximately $129,000, which is significantly lower than the national median of $277,795.
Low Cost of Living: Indiana’s overall cost of living is also lower than the national average. Based on data from the Bureau of Labor Statistics, the cost of living index for Indiana is 88.8, compared to the national average of 100. This means that you can expect to pay less for goods and services in Indiana than you would in other states.
Thriving Job Market: Indiana boasts a strong and diverse economy, with thriving industries in sectors such as manufacturing, healthcare, and technology. This has led to a steady job market and low unemployment rates, making it easier for residents to find employment and support themselves financially.
Quality Education: Indiana is home to numerous high-quality educational institutions, including top-ranked public and private universities. This provides residents with access to affordable, high-quality education options, which can be a significant factor in reducing the overall cost of living.
Limited Public Transportation: Indiana’s public transportation system is relatively limited, which can make it challenging for those without access to a vehicle to get around. This may be a drawback for those who rely on public transportation for daily commutes or other needs.
Slower Pace of Life: While this may be seen as a pro for some, others may find Indiana’s slower pace of life to be a con. Those who are accustomed to a faster-paced lifestyle may find themselves yearning for more action and activity in their daily lives.
Limited Cultural Opportunities: While Indiana has a rich history and culture, some may find that there are limited opportunities for cultural experiences, such as museums, galleries, and performances, compared to larger cities. This may be a drawback for those who enjoy a more vibrant and culturally rich environment.
High Humidity: Indiana’s humid climate can be a challenge for some, particularly during the summer months. High humidity levels can make it feel hotter than it actually is, and may be a drawback for those who struggle with heat and humidity.

FAQs

1. What factors determine the affordability of a state to live in?

The affordability of a state to live in depends on several factors, including the cost of housing, healthcare, transportation, and overall living expenses. The availability of jobs and the average income of residents also play a significant role in determining the affordability of a state.

2. Which state is the cheapest to live in the US?

The state that is considered the cheapest to live in the US is typically a state with a low cost of living index, which takes into account the costs of housing, healthcare, transportation, and other expenses. However, the cheapest state to live in can vary depending on individual circumstances and preferences.

3. How do I determine the affordability of a state for myself?

To determine the affordability of a state for yourself, you should consider your personal expenses, such as housing, healthcare, transportation, and other living expenses. You should also consider the availability of jobs and the average income of residents in the state. It is also a good idea to research the cost of living in different cities within the state to get a more accurate picture of the affordability of the state as a whole.

4. What are some factors to consider when choosing an affordable state to live in?

When choosing an affordable state to live in, it is important to consider factors such as the cost of living, job availability, and the overall quality of life. You should also consider the climate, cultural offerings, and access to amenities such as schools and healthcare facilities. It is also a good idea to research the state’s economy and demographics to get a better understanding of the state’s long-term prospects.

5. How do I find affordable housing in a state?

To find affordable housing in a state, you can start by researching the average cost of rent and home prices in different cities within the state. You can also use online resources such as real estate websites and housing directories to find listings in the area. It is also a good idea to reach out to local real estate agents who can help you find affordable housing options that meet your needs and budget.