With many companies embracing remote work even in the post-pandemic era, more and more Americans have the option to reconsider where they live.
According to the Future Workforce Report, by 2025, 36.2 million Americans are expected to work remotely, almost double the pre-pandemic amount. Traditionally, people were forced to live within a reasonable commute of their place of employment, but without that limitation, Americans are free to relocate based on other factors.
One of the many considerations on where to live is cost. There is a big difference in living costs between the most expensive state and the cheapest state. If you want to stretch your dollar further, why not consider some of the cheapest states to live in the U.S.?
How to Compare Cost of Living Between States
The cost of living index measures how expensive it is to live in one state relative to another. The average cost of living across the entire United States is set at 100. A cost of living index number less than 100 means that a state is less expensive than average, and over 100 means it is more expensive than average.
The Council for Community and Economic Research (C2ER) measures the cost of living index, and it takes many factors into account, including:
Food and groceriesHousingUtilitiesTransportationHealthcare
Across the U.S., The cost of living index ranged from a low of 83.3 (17% cheaper than average) to a high of 193.3 (93% more expensive than average).
In addition to the cost of living, median household income plays a role in affordability. Similar jobs in different geographies may pay very differently. According to the U.S. Census Bureau, median household income by state ranged from $45,800 to $92,300. In some cases, it can pay (literally) to take a job in a different state, especially if remote work is not an option in your field.
Finally, while housing costs are considered in the cost of living index, they can be a significant driver of affordability and an important factor in determining where to live. Zillow’s home value index tracks the price of a typical home by state, and home prices in the most expensive state are more than six times higher than the cheapest state.
The 10 Cheapest States to Live In the U.S.
Here is the list of the top ten cheapest states to live in the United States.
Living in one of these states will result in a 10-17% lower cost of living than average, allowing you to save more of your hard-earned dollars.
1. Mississippi
Cost of Living Index: 83.3
Typical Home Value: $158,000
Median Household Income: $45,800
Mississippi is overall the most affordable state to live in the U.S., with a cost of living index of just 83.3, 17% cheaper than the average state. Housing is also very affordable, with a typical home value of just $158,000. Mississippi offers a warm climate and beaches on the Gulf Coast. Its largest city is Jackson, with a metropolitan population of just under 600,000.
2. Kansas
Cost of Living Index: 86.5
Typical Home Value: $195,000
Median Household Income: $62,100
With a population of just under 3 million, Kansas offers affordable living, coming in 13.5% cheaper than the national average. A relatively high median household income also boosts the average family’s standard of living. Wichita is the largest city in Kansas, with a metropolitan population of around 650,000.
3. Alabama
Cost of Living Index: 87.9
Typical Home Value: $190,000
Median Household Income: $51,700
Sitting just to the east of Mississippi, Alabama comes in third in the overall cost of living, 12% under the national average. The Yellowhammer State ranks 24th in population, and its largest metropolitan area is Greater Birmingham, with over 1.1 million people. Alabama boasts a diverse economy with aerospace, education, health care, manufacturing, and more employers.
4. Oklahoma
Cost of Living Index: 87.9
Typical Home Value: $167,000
Median Household Income: $54,400
Oklahoma comes in as the 4th cheapest state to live in, just behind Alabama. With affordable housing and a diverse economic landscape, The Sooner State offers many opportunities. Nearly two-thirds of Oklahomans live and work in the Oklahoma City or Tulsa metropolitan statistical areas.
5. Georgia
Cost of Living Index: 88.8
Typical Home Value: $287,000
Median Household Income: $62,000
Another southeastern state known for its warm climate, Georgia borders the Atlantic Ocean on its east coast. Home prices in Georgia are significantly higher than some of the other states on the list, thanks to a large majority of its residents residing in more urban areas. The Atlanta metropolitan area is the 9th most populous in the United States, with more than six million residents.
6. Tennessee
Cost of Living Index: 89
Typical Home Value: $270,000
Median Household Income: $56,100
Tennessee, another southeastern state, is the sixth most affordable state to live in the U.S. Boasting several well-known cities such as Memphis, Knoxville, and Chattanooga, Tennessee’s overall population of 6.9 million ranks 15th in the nation. Tennessee is famous for its influence on country, soul, and gospel music, and the state also has many colleges and universities, including the University of Tennessee and Vanderbilt University.
7. Missouri
Cost of Living Index: 89.8
Typical Home Value: $213,000
Median Household Income: $57,400
Missouri is in the Midwestern region of the U.S., and it comes in at number seven on the list of most affordable states to live in. Its cost of living is 10% under the national average while still offering a diverse culture and multiple population centers, including St. Louis and Kansas City.
8. Iowa
Cost of Living Index: 89.9
Typical Home Value: $181,000
Median Household Income: $61,700
While often viewed as an agricultural state, Iowa has a diversified economy across manufacturing, biotechnology, and financial services. The Des Moines metropolitan area is the state’s largest, with an estimated population of 708,000 as of 2020.
9. West Virginia
Cost of Living Index: 90.5
Typical Home Value: $127,000
Median Household Income: $48,900
With a cost of living index 9.5% below the national average, West Virginia offers the ninth cheapest place to live in the U.S. Charleston, the state’s capital and largest city has a metropolitan population of just over 200,000. With many people drawn to its natural beauty, tourism contributes a significant amount to West Virginia’s total GDP.
10. Indiana
Cost of Living Index: 90.6
Typical Home Value: $206,000
Median Household Income: $57,600
Indiana is located in the Midwestern United States and is the tenth least expensive state to live in. Indianapolis anchors its largest metropolitan area with around 2 million residents. Northwest Indiana borders the Great Lakes and is considered part of the Chicago metro area. Indiana has a rich sporting history with a professional football and basketball team and is also known for the Indianapolis Motor Speedway.
The Next Most Affordable States to Live
The next set of states is not the absolute cheapest in terms of cost of living, but they are still affordable, and you can save money compared to the national average.
11. Arkansas
Cost of Living Index: 90.9
Typical Home Value: $167,000
Median Household Income: $49,000
12. New Mexico
Cost of Living Index: 91
Typical Home Value: $272,000
Median Household Income: $51,900
13. Ohio
Cost of Living Index: 91.3
Typical Home Value: $196,000
Median Household Income: $58,600
14. Michigan
Cost of Living Index: 91.3
Typical Home Value: $223,000
Median Household Income: $59,600
15. Texas
Cost of Living Index: 92.1
Typical Home Value: $283,000
Median Household Income: $64,000
16. Louisiana
Cost of Living Index: 93
Typical Home Value: $203,000
Median Household Income: $51,100
17. Kentucky
Cost of Living Index: 93.1
Typical Home Value: $185,000
Median Household Income: $52,300
18. South Carolina
Cost of Living Index: 93.6
Typical Home Value: $262,000
Median Household Income: $49,000
19. Nebraska
Cost of Living Index: 93.7
Typical Home Value: $226,000
Median Household Income: $63,200
20. Illinois
Cost of Living Index: 94.3
Typical Home Value: $249,000
Median Household Income: $69,200
21. Wyoming
Cost of Living Index: 94.3
Typical Home Value: $303,000
Median Household Income: $65,000
22. North Carolina
Cost of Living Index: 95.7
Typical Home Value: $288,000
Median Household Income: $57,300
23. Wisconsin
Cost of Living Index: 96.4
Typical Home Value: $246,000
Median Household Income: $64,200
24. North Dakota
Cost of Living Index: 98.2
Typical Home Value: $260,000
Median Household Income: $64,600
25. Utah
Cost of Living Index: 99
Typical Home Value: $530,000
Median Household Income: $75,800
Higher than Average Cost of Living States
While not the most expensive in the country, these states come in above average for the overall cost of living.
26. Minnesota
Cost of Living Index: 100
Typical Home Value: $317,000
Median Household Income: $74,600
27. Florida
Cost of Living Index: 100.3
Typical Home Value: $349,000
Median Household Income: $59,200
28. Montana
Cost of Living Index: 100.7
Typical Home Value: $419,000
Median Household Income: $57,200
29. South Dakota
Cost of Living Index: 101
Typical Home Value: $272,000
Median Household Income: $59,500
30. Virginia
Cost of Living Index: 101.8
Typical Home Value: $353,000
Median Household Income: $76,500
31. Idaho
Cost of Living Index: 102.1
Typical Home Value: $459,000
Median Household Income: $61,000
32. Pennsylvania
Cost of Living Index: 102.5
Typical Home Value: $251,000
Median Household Income: $63,500
33. Arizona
Cost of Living Index: 103.2
Typical Home Value: $408,000
Median Household Income: $62,100
34. Colorado
Cost of Living Index: 105.3
Typical Home Value: $546,000
Median Household Income: $77,100
35. Nevada
Cost of Living Index: 106.3
Typical Home Value: $424,000
Median Household Income: $63,300
36. Delaware
Cost of Living Index: 107.9
Typical Home Value: $332,000
Median Household Income: $70,200
37. New Hampshire
Cost of Living Index: 109.9
Typical Home Value: $406,000
Median Household Income: $77,900
38. Washington
Cost of Living Index: 111.6
Typical Home Value: $583,000
Median Household Income: $78,700
39. Maine
Cost of Living Index: 115
Typical Home Value: $336,000
Median Household Income: $58,900
40. New Jersey
Cost of Living Index: 115.2
Typical Home Value: $436,000
Median Household Income: $85,800
41. Vermont
Cost of Living Index: 117
Typical Home Value: $331,000
Median Household Income: $63,000
10 Most Expensive States to Live
The ten most expensive states to live in range from 17-93% more expensive than the national average. If you’re looking to stretch your dollar further, these states are probably not the place to be unless you can increase your income to compensate for higher expenses.
42. Rhode Island
Cost of Living Index: 117.2
Typical Home Value: $405,000
Median Household Income: $71,200
43. Connecticut
Cost of Living Index: 121.6
Typical Home Value: $334,000
Median Household Income: $78,800
44. Maryland
Cost of Living Index: 124
Typical Home Value: $385,000
Median Household Income: $86,700
45. Alaska
Cost of Living Index: 127.1
Typical Home Value: $311,000
Median Household Income: $75,500
46. Oregon
Cost of Living Index: 130.1
Typical Home Value: $492,000
Median Household Income: $67,100
47. Massachusetts
Cost of Living Index: 135
Typical Home Value: $550,000
Median Household Income: $85,800
48. California
Cost of Living Index: 142.2
Typical Home Value: $745,000
Median Household Income: $80,400
49. New York
Cost of Living Index: 148.2
Typical Home Value: $377,000
Median Household Income: $72,100
50. District of Columbia
Cost of Living Index: 158.1
Typical Home Value: $692,000
Median Household Income: $92,300
51. Hawaii
Cost of Living Index: 193.3
Typical Home Value: $828,000
Median Household Income: $83,100
Other Factors to Consider for Affordability
While the cost of living is a significant part of affordability, the cheapest states to live in depend on many factors. In many cases, some states are more expensive to live in because they offer the opportunity to make more money than in other places. However, if you can work remotely, you may be able to work for a company in an expensive state but live in a much more affordable area.
Housing costs also play a role in affordability, and whether you plan to rent or buy can factor into the equation for your specific situation. You need to know many things before buying a house that factor into the overall cost, including property tax rates, age of the home, and more. The total purchase price is just one part of the equation.
In addition, there are many reasons to live in a particular city other than just cost, whether that is proximity to family and friends, access to schools, or outdoor activities. If you seek to balance your budget, simply taking on an extra job that pays cash on the side may make more sense than moving across the country. Ultimately, you have to weigh your options and determine what location offers you the best quality of life while allowing your dollar to stretch further.
The Cheapest States – How Does Your State Compare?
There are many factors to consider when choosing where to live, but based on the cost of living index, the Southeast and Midwest offer many unique and affordable areas to put down roots. With the trend toward remote work, many possibilities open up to relocate and put money back in your pocket.
If you are struggling to make ends meet in a high cost of living state, you may be able to cut your spending by 50% or more just by moving to one of the cheaper states. There has never been a better time in history to consider it.
This post originally appeared on Savoteur.
Jeff is a fan of all things finance. When he’s not out there changing the world with his blog, you can find him on a run, a Mets game, playing video games, or just playing around with his kids.
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