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Cheapest States 2025: Ultimate Guide

Local Moving, Long Distance Moving, | 21/07/2023 |

Factors Affecting Cost of Living in U.S. States

The cost of living in any state or country means the amount of money any person needs to sustain a living. The cost of living in a state is evaluated by considering several factors like the cost of housing, utilities, amenities, groceries, gas, education, healthcare and very importantly- taxes. All these costs can only be afforded if you earn the equivalent or a bit higher than the equivalent. Per capita income is directly associated with the cost of living in a state. The cost of living in a particular state may vary with the rate of the dollar in a particular region. Despite being the 26th most expensive country, the United States has wide differences in the cost of living in different states.

As per the reports by US News, the cost of living in several states of the United States affected by COVID-19. During the pandemic, most people started to work remotely and this affected the income of several people. Like some companies started to fix the compensations depending on the location of the employee. The Cost of Living Index measures the differences in the cost of consumer goods, and services, for professional households with high incomes in different cities and states. Six different components are to be considered for evaluating the cost of living- housing cost, utilities, health care, grocery, transportation and other goods & services. According to this report the most expensive urban area in terms of the cost of living index- 2022 is New York (Manhattan), NY and the least expensive urban area in terms of the cost of living index- 2022 is Harlingen, TX.

According to the World Population Review, the average household expense in America is $61,334 which covers all the expenses. The largest expense of any house in the United States is housing cost which is about $1,785 per month on average. As per the statistics, the median cost of a single-family home is $273,990. The annual expenses of an American household include- Transportation- $9,800, Food & Groceries- $7,310, and Healthcare- $5,171.

US News compiled data from the cost of living index as per the information available on World Population Review and prepared a list of the most affordable states in the United States.

Mississippi

Mississippi is the cheapest state in the United States as its cost of living is 17% lower than the national average. The housing cost which is the major factor in determining the cost of living is the lowest in the country with the lowest cost of transportation. In Mississippi, the median cost of a single-family home is around $157,800. Despite being the cheapest state, Mississippi has the highest poverty rate and is ranked as the worst state to live in.

Here are the statistics for the Cost of Living Index for Mississippi where the costs of day-to-day expenses are also listed:

Cost of Living Index- 83.3

Housing- 66.3

Groceries-92.2

Healthcare- 94.7

Utilities- 90.4

Transportation- 86.7

Miscellaneous- 90.0

Kansas

Ranked as the second cheapest state to live in the nation, Kansas has a lower cost of housing. The housing cost in Kansas is 28% lower than the national average. As per the reports, the cost of a single-family home in Kansas is $198,100 with a lower cost of transportation and groceries. The state has the lowest unemployment rate. The city is home to several industries including manufacturing, professional services, biosciences, bioenergy, renewal fuels, and more. The residents of the states have their family farms where they grow wheat, grain sorghum and livestock feed.

Here are the statistics for the Cost of Living Index for Kansas where the costs of day-to-day expenses are also listed:

Cost of Living Index- 86.5

Housing- 72.6

Groceries-91.7

Healthcare- 100

Utilities- 100.2

Transportation- 97.3

Miscellaneous- 88.4

Alabama

The third cheapest state to live in the United States is Alabama as it has a relatively inexpensive cost of housing. The cost of health and transportation are the lowest in the nation while utilities and groceries are close to the national average. The cost of a single-family home in Alabama is $194,690. Alabama is home to University of Alabama, Space Camp, The U.S. Space & Rocket Center, and more.

Here are the statistics for the Cost of Living Index for Alabama where the cost of day-to-day expenses is also listed:

Cost of Living Index- 87.9

Housing- 70.1

Groceries-98.2

Healthcare- 91

Utilities- 100.7

Transportation- 92.7

Miscellaneous- 94.3

Oklahoma

Oklahoma ranked as the fourth cheapest state to live with housing costs 25% lower than the national average. The median home cost in Oklahoma is $171,057 with a lower cost of healthcare and groceries. The economy of the state largely depends on the oil and natural gas industry. The poverty levels are quite high in the state as nearly 15% of the population lives under the poverty line and it ranked as one of the worst states to live in.

Here are the statistics for the Cost of Living Index for Alabama where the cost of day-to-day expenses is also listed:

Cost of Living Index- 87.9

Housing- 74.1

Groceries-94.5

Healthcare- 94.5

Utilities- 95

Transportation- 94.8

Miscellaneous- 92.6

Georgia

Georgia is the fifth cheapest state to live in the United States where housing costs are 25% lower than the national average. The housing market in the state is highly affordable as most residents can afford a new home. The cost of transportation and utilities is the lowest in the country. The state is home to the headquarters of companies like Coca-Cola, Home Depot, Delta, UPS, and Aflac. Good education opportunities are available at The University of Georgia.

Here are the statistics for the Cost of Living Index for Alabama where the cost of day-to-day expenses is also listed:

Cost of Living Index- 88.8

Housing- 74.4

Groceries-95.9

Healthcare- 96.7

Utilities- 90

Transportation- 92.6

Miscellaneous- 97.1

References-

https://www.usnews.com/news/best-states/slideshows/10-most-affordable-states-for-professionals?onepage

https://worldpopulationreview.com/state-rankings/cheapest-states-to-live-in

https://www.usnews.com/news/best-states/oklahoma