When you are moving house, there are many things to consider. Is it a great place to raise your kids? What’s the crime rate like?
What kind of facilities are in the area you are considering? But another thing to consider is the overall cost of living in the area.
This significantly impacts everything from the median home price to the median income.
Therefore, it is worth looking at the cheapest places to live in the United States to help you decide if they fit due to the low cost of living before considering those other questions. Let’s look at the cheapest states to live in.
What is the Cost of Living, and Why Does it Matter?
Cost of living is a simple term to describe the basic living expenses and what these are in a certain place.
A national average is used to decide if somewhere is cheaper or more expensive on the cost of living index. The index is compiled by the U.S. Bureau of Labor Statistics (BLS) and is regularly updated with the latest information from nationwide.
The index looks at states but also metropolitan areas. So you will see a list of states, such as West Virginia, and individual locations, such as San Francisco or Oklahoma City.
This means you can fine-tune your research by state and city if you have somewhere particular that interests you. If a state scores less than 100 on the index, it is considered to have a cheaper living cost than average.
At the top end of the scale is Hawaii, which has a score of over 190.
Other factors can be used to help decide which are the most expensive states to live in and which are the least expensive states.
Things like average salaries, housing availability, and average rent can be used to make these decisions.
Cheapest States to Live In
Once you understand what makes a place a ‘cheap state,’ you can start looking at which ones they are and if they have the right balance of features for you.
Let’s look at some of the current cheapest states and the pros and cons of these areas.
Of course, these are purely based on statistics and the cost of living index, and there are always other factors to consider when considering where to live.
Mississippi is usually rated as the cheapest place to live in the US, with a cost of living index score of 83.3.
The main reason is that it has the lowest average housing costs, over 33% lower than the average across the country.
It is also noted for having the lowest transportation costs so that people can get around for less than anywhere else in the US. It also boasts fantastic food with inexpensive places to eat found almost everywhere.
However, there are some downsides. Currently, the state has the highest poverty rate in the country and a high unemployment rate with fewer job opportunities.
Nearly 20% of the state’s population lives below the poverty line. There are also issues with education standards and the quality of the healthcare system.
With a recent rating of 86.5, Kansas is usually second on the list of states with the lowest cost of living. It is typically 2nd or 3rd in terms of housing costs, so living somewhere like Kansas City means you get much more house for your money than in other cities.
There is also a low unemployment rate, which makes it more appealing if you need to find a job when you move.
One of the most significant downsides of the state is the weather conditions.
Extreme droughts and frequent tornados can impact everything from the cost of home insurance to how easy it is to get to work.
Also, if you need to travel for work, there are few airports across the state, so it isn’t one of the best states for people that fly frequently.
Alabama is known for its lower cost of living due to the prominence of affordable housing. The southern state has housing costs, usually around a third lower than the national average, along with low transportation costs and sensible healthcare costs.
There are currently lower-than-average unemployment rates. However, it still ranks near the top of the list based on the median household income for people below the poverty line.
Healthcare costs are reasonable, but the system in the state isn’t the best. And if you enjoy a glass of wine or a vodka and tonic, there are restrictions on alcohol purchase and consumption you should understand before moving there.
Oklahoma usually sits fourth on the list of cheapest places to live. It has one of the most affordable housing costs, around one-quarter lower than average.
Groceries are usually below the average. It is also reasonable for the healthcare costs, but there are issues with the system.
You should also consider the weather like Kansas when considering this state. Tornados are common during tornado season, although the state does see all four seasons, unlike some parts of the US where there’s little seasonal change.
Georgia ranks as one of the most affordable places to live, and the cities such as Atlanta and Savannah also rank it higher on the fun places to live lists.
It boasts lower-than-average utility and housing costs, around 25% lower than the average home price. Plus, Atlanta is a southern business hub, which means many companies have a presence here.
This state might not be for you if you don’t like hot and muggy summers. Or if you suffer from allergies! But otherwise, it has a diverse natural landscape with lots to see and do.
In recent years, Tennessee is usually around 6th on the top ten list, with housing costs just over 20% lower than average.
It has a lower unemployment rate than many states but a high poverty rate. A significant draw for the state is no state income tax on earned wages.
You’ll love living in the state if you enjoy whiskey, country music, rock, or blues.
But be aware that the rapidly expanding cities have a lot of congestion problems that can slow down your commute and cost more in fuel money.
Missouri ranks typically in the second half of the list of cheapest places to live and is an ideal compromise between living in the South and a Midwestern state.
Mortgage payments can be reasonable as the housing cost is low on average, but the state also has a high minimum wage. There’s a healthy job market with many different fields represented by employers, both in the urban areas and away from them.
Watch out for the combination of hot summers and tornados like in neighboring states.
Plus, some urban areas have higher than average crime rates, so research housing prices and the location.
Iowa has housing costs around 25% lower than average but a lower-than-average poverty level. It has a strong economy, and the education system is in excellent condition, so it often ranks as one of the best and cheapest states.
The only downsides are the cold winters and the lack of either mountains or beaches, so there are limits to what you can do within the state. But there are plenty of state parks, historic sites, and museums to make up for it.
Sitting around 9th on the cheapest places to live, this state also ranks high on the list of the worst places in the US!
That’s because while it has affordable housing, there are high poverty rates and a challenging job market. There are concerns around the education system, and it has yet to do as well in terms of economic growth as other states.
It is worth noting that it is a beautiful state with the Appalachian Mountains dominating it. West Virginia is worth considering if you like an area with good seasons. Plus, the state’s east side is close to Washington, D.C.
Indiana usually makes it to the bottom of the top ten cheapest places to live due to lower-than-average housing costs and low unemployment. It offers access to universities such as Notre Dame and Purdue.
If you aren’t a fan of cold winters, this isn’t the state for you. But it does have amazing natural scenery to enjoy when the snow isn’t covering everything.
Michigan often ranks in the top 10-20 cheapest states to live in because it has a low cost of living. Food prices are one of the biggest factors, with average prices much below the national average.
The state also ranks as one of the best to retire in, so if you are heading toward retirement, this is worth considering.
Another cheap state to live in, Arkansas has a low cost of living with a range of key costs below the national average, including transportation, utilities, and groceries. Even the healthcare system is reasonably priced compared with other states.
Property taxes are another big plus for the state. It has one of the lower property tax rates in the US, so whether you own a home or rent, you will save money living here.
House prices in Kentucky are generally more affordable than the national average, and rents are pretty reasonable, especially in big cities such as Louisville and Lexington. The north-central part of the state is more expensive than other areas.
Groceries, healthcare, utilities, and transport costs are around 5-10% lower than the national average, so the basics’ cost is usually lower than in other states. There is also a good spread of higher-paying jobs available in a wide range of industries.
New Mexico has house and rent prices that are 10-20% less than the average across the country, so the cost of housing is reasonable. One of the big draws to the state is that in-state college tuition is much cheaper than in other states, so the cost of further education is lower.
The state also sits below average in the main cost areas, such as groceries and utilities.
Texas sneaks into the list for being around 5% cheaper than average in terms of cost of living. The big cities such as Dallas, Houston, and Austin may not be as affordable, but many smaller cities and rural areas can be cheaper places to live.
The state is also one of the few that doesn’t have an income tax, so you get to keep more of the money you earn. There’s good earning potential with many industries in Texas, and there are also a lot of green initiatives if you want to enter this industry.
Final Thoughts on the Cheapest State to Live In
These states are typically rated as the cheapest places to live in the United States.
All have pros and cons, and it is worth doing plenty of research if you are looking for a new home in one of them.
The best places to live for one family will be very different for another, so do your research, and you’ll find the ideal spot for your family.