Cheapest States To Live It’s easy to get tempted by cheap houses in small towns that promise big savings, but uprooting your entire life for a cheaper home may not always be the wisest move. However, that doesn’t mean you can’t explore more affordable options in different states. Some states have lower costs of living and housing prices than others, which can make it easier to find a budget-friendly home without sacrificing quality of life. For instance, states like Indiana, Ohio, and Iowa offer reasonable housing prices and a decent standard of living. It’s important to research the state’s job market, education system, and overall quality of life before making any decisions about moving for a cheaper home.
Moving to a remote location may not sound like an appealing idea, but there are several affordable places across the country that you could consider. Moving to a new state requires careful planning and research, and choosing a reliable moving company is crucial. Forbes has published a list of the best moving companies that can help you kick-start your research process. While relocating to an inexpensive area can be an attractive option, it’s important to consider other factors such as job opportunities, local amenities, and quality of life before making a final decision.
What Is Cost of Living?
The cost of living is the total amount of money needed to cover essential living expenses in a particular area. This includes housing, utilities, transportation, healthcare, and groceries. These expenses are combined into a cost of living index, which provides an easy comparison of the prices across different locations. The index can help individuals determine if they can afford to live comfortably in a particular location with their current income and budget. It is essential to consider the cost of living when planning on relocating or traveling to a new place to ensure that you have enough financial resources to maintain your standard of living. Additionally, the cost of living can vary significantly from city to city and country to country, making it crucial to research the specific location’s cost before making any decisions.
Cost of Living Index
To establish a cost of living index for the United States, researchers will collect data on primary living expenses. The U.S. Bureau of Labor Statistics (BLS) reports that the average American household spends around $5,111 per month on living expenses, which adds up to approximately $61,334 annually. These expenses include housing, food, transportation, healthcare, and other necessary expenditures. The cost of living varies significantly based on location and factors like population density and economic conditions. Understanding these costs is crucial for individuals looking to plan their budget or make decisions about where to live or work.
The cost of living varies by state or region. A cost of living index compares costs to a national average, allowing for accurate comparisons. However, actual costs may differ due to factors such as housing prices and taxes. Thorough research is necessary before making relocation or financial decisions. Understanding local costs helps with career and financial planning.
When comparing the average costs of living in different states or cities, the total cost is compared to the national average. Hawaii has the highest cost of living, with a score of 193.3 on the index, which means that it is 93.3% more expensive than the national average. States that score below 100 on the index are considered to have a lower cost of living than the national average. It is important to note that cost of living varies widely from state to state and even within different regions of each state. Factors such as housing, transportation, food, and healthcare costs all contribute to a state’s overall cost of living.
Other Factors
The cost of living index is useful for a quick overview, but it’s not the sole statistic to take into account. Examine the average incomes in the location you plan to relocate to and take into account economic indicators and job opportunities. Many of these more affordable states experience higher levels of poverty and joblessness, so it’s crucial to recognize that lower living costs often correspond to lower salaries.
Housing options may be limited, so it’s important to explore both buying and renting opportunities. Compare the monthly expenses to understand the value you can get. Conduct a quick search to compare what you can purchase with $150,000 or $300,000 in different locations. In certain areas, this amount is sufficient for a single-family home, while in urban centers or pricier states, it may not cover the cost of buying an apartment.
The final factor to consider is location. Many of the more affordable states are located in the Southeast and Midwest regions, but there are still some areas with higher costs within those regions. The cost of living index for each state takes into account the average cost of various expenses, including higher housing costs in urban centers.
What’s the cheapest state to live in 2024?
- Mississippi
- Kansas
- Alabama
- Oklahoma
- Georgia
- Tennessee
- Missouri
- Iowa
- West Virginia
- Indiana
1. Mississippi
Mississippi is the most affordable state to live in the United States, with a cost of living index score of 83.3 and the lowest average housing costs at 33.7% below the national average. The median single family home is priced at around $140,818.
With that being stated, the state also has the highest poverty rate in the nation, with 19.5% of the population living below the poverty line. Economic challenges, along with a struggling education system and an overall poor quality of life, also contribute to Mississippi’s high ranking among the worst states to reside in.
Pros
- Lowest average housing costs in the nation
- Lowest average transportation costs in the nation
- Warm weather and mild winters
- Plenty of (inexpensive) Southern comfort food
Cons
- Highest poverty rate in the country
- Economic concerns and fewer job opportunities
- Poor quality of education and healthcare system
2. Kansas
Kansas is ranked as the second most affordable state to live in, with a score of 86.5. The housing costs are especially budget-friendly, ranking as the third lowest in the nation, with a median cost of approximately $176,898 for a single-family home. Additionally, the state has one of the lowest unemployment rates in the country, indicating a strong economy.
Pros
- Housing costs 27.4% below national average
- Low unemployment rate
- Barbecue
Cons
- Frequent tornadoes and extreme droughts
- Proximity to airports
3. Alabama
Alabama is ranked third for its overall low cost of living, with a cost of living index score of 87.9. The median home price in Alabama is $170,184, making it the second cheapest after Mississippi. Additionally, transportation and healthcare costs in the state are among the lowest in the country. However, Alabama still has one of the highest percentages of people living below the poverty line. On the positive side, the state has a low unemployment rate of 2.9%.
Pros
- Housing costs 29.9% below national average
- Low transportation and healthcare costs
- Proximity to the Gulf Coast
Cons
- Subpar healthcare system
- Dry counties and restrictions on alcohol consumption and purchase are common
4. Oklahoma
Oklahoma secured the fourth spot on our list with an overall score of 87.9. One of the state’s most significant advantages is its affordability, with healthcare, groceries, and housing being relatively cheap compared to other states. The median cost for a home in Oklahoma is $151,469, making it an attractive option for those looking for affordable real estate.However, the state also has some challenges to overcome, including a high poverty rate of 15.1%, which is one of the highest in the country. Healthcare and education are also areas where Oklahoma typically ranks alongside Mississippi, indicating that there is room for improvement in these sectors. Despite these challenges, Oklahoma remains a popular destination due to its affordability and unique culture.
Pros
- Housing costs 25.3% below national average
- Healthcare and grocery costs 5.5% below national average
- All four seasons including mild winters and hot summers
Cons
- Tornadoes
- Struggling education and healthcare system
- Rather boring landscape
5. Georgia
Georgia, also known as the Peach State, boasts an overall score of 88.8 due to its significantly lower than average housing costs and cheaper than typical transportation and utility costs. The median cost for a single-family home in Georgia is $246,272. This state is also a popular choice for those seeking a fun place to live, as it ranks high on lists of fun states in large part due to Atlanta’s reputation as a southern business hub. With its vibrant culture, warm climate, and affordable cost of living, Georgia is an attractive option for many looking to relocate or settle down.
Pros
- Housing costs 25.6% below national average
- Utility costs 9.5% below national average
- Diverse natural landscape
- Proximity to urban centers like Atlanta and Savannah
Cons
- Many allergy-producing plants
- Hot and muggy summers
6. Tennessee
Tennessee ranks as the sixth cheapest state to live in, with a score of 89.0. The median price for a single-family home is $230,253, which is slightly lower than its southern neighbor. Additionally, Tennessee has a lower unemployment rate than the national average at 3.4%, while the poverty rate stands at 13.8%. One unique aspect of living in Tennessee is that the state doesn’t impose any income tax on earned wages. This makes it an attractive option for those looking to save money on their taxes and keep more of their hard-earned income. Despite its high poverty rate, Tennessee offers affordable housing and favorable taxes, making it a great place to call home for those on a budget.
Pros
- Housing costs 20.7% below national average
- No state income tax on earned wages
- Rich musical history for country, rock, blues and jazz
- Whiskey
Cons
- High poverty rate at 13.8%
- Increased traffic due to rapidly expanding cities
7. Missouri
Missouri is a state that offers affordable living with an overall cost of living index score of 89.8, making it the seventh cheapest state in the US. It borders two other states with low costs of living and has a median single-family house cost of $194,226. This makes Missouri an excellent choice if you’re struggling to decide between living in the South or Midwest. In addition to its affordability, Missouri has many attractions to offer, including world-class museums, beautiful parks, and delicious cuisine.
Pros
- Housing costs 19.7% below national average
- High minimum wage at $11.15
- Good job market in a variety of fields
Cons
- Crime rates are relatively high in the urban centers
- Hot summers and lots of tornadoes
8. Iowa
Iowa is the eighth most affordable state to live in, boasting a score of 89.9. With a poverty rate of 11%, Iowa fares better than many other states on this list. The median cost of a single-family home is $167,036, making it an attractive option for those looking to buy property. Additionally, Iowa ranks ninth on WalletHub’s list of best states to live in, largely due to its robust economy and education system. Its affordability combined with its high ranking as a desirable place to live make Iowa an ideal choice for those seeking both affordability and quality of life.
Pros
- Housing costs 24% below national average
- Ranked as one of the best states to live in
- Highly ranked education system
- Home to the Ice Cream Capital of the World (Le Mars, Iowa)
Cons
- Incredibly cold winters
- No mountains or beaches
9. West Virginia
West Virginia, the destination of all country roads, ranks ninth on the cost of living index at 90.5, making it one of the most affordable places to purchase a home, with the average cost of a single family home at $117,639. Despite its affordable housing, West Virginia is frequently cited as one of the least desirable states to live in, along with Mississippi, due to economic and educational concerns.
Pros
- Housing costs 21.4% below national average
- All four seasons
- Beautiful Appalachian landscape
Cons
- Challenging job market
- High poverty rates
- Frequently listed as one of the worst states to live in
10. Indiana
The great state of Indiana ranks at number 10 with a score of 90.6. Although all expenses are cheaper than the national average, the housing costs stand out as the main attraction, with the average single-family home priced at $185,805. Indiana is considered to be in the middle of the road for the best state to live in, but it also boasts one of the lowest unemployment rates in the country at 2.2%.
Pros
- Housing costs 21.7% below national average
- Low unemployment rate at 2.2%
- Great universities like Purdue and University of Notre Dame
Cons
- Cold winters
- Considered to be a bit boring
- High rates of drug addiction and overdoses
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Bottom Line
Moving to one of the cheapest states in the country can be an excellent way to save some cash, but it is crucial to consider many factors before making a decision. The average wages and employment opportunities are essential considerations when choosing a target state. Understanding the housing market, what options are available, and how much you can get for your money is also vital. You must also think about the kind of lifestyle you want to live and what sort of leisure activities and natural wonders you want access to. This research will help you make an informed decision on which state best meets your needs, both financially and personally. Moreover, it is important to keep in mind that cheaper doesn’t always mean better quality of life. Consider all of these factors before making any decisions related to moving to a different state.
