Cheapest States to Live In 2025 – Top 5 States Where Your Dollar Will Go Further

In today's economic climate, where the cost of living is on the rise, finding a place where your money stretches further can make a significant difference in your quality of life. As the price of residential real estate has soared by 30% over the past three years, many Americans are rethinking where they call home.

With the rise of remote work, the opportunity to live in more affordable states without compromising on lifestyle has never been more accessible.

From affordable housing and lower childcare costs to reasonable living wages, these states offer a range of benefits that can help you achieve greater financial stability and peace of mind.

Whether you're looking for a place with a strong sense of community, excellent education opportunities, or a mild climate, there's a state on this list that can meet your needs.

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Cost of Living Index by State

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"Kentucky": 95.2, "Louisiana": 92.8, "Maine": 116.9, "Maryland": 125.1, "Massachusetts": 147.9,
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The Cost Of Living Index

The Cost of Living Index measures the average cost of living in various states relative to the national average, which is set at 100. States with a Cost of Living Index below 100 are more affordable than the national average, making them attractive options for those looking to maximize their income.

This index takes into account essential expenses like food, shelter, clothing, utilities, transportation, healthcare, public education, and taxes.

The 5 Cheapest States To Live In

Here is our top 5 list of cheapest states to live in the U.S. based on 2 adults working in a household of 4 people.

The monthly rent reflects the average rent for a two-bedroom apartment.

Living in any of these states will allow you to save more of every dollar that you earn.

​1. Mississippi

• Cost of Living Index: 84.9

• Living wage per hour: $21.63

• Median household income: $52,788

• Average rent per month: $851

• Average childcare: $11,874

Okay, so it's not as glamorous as other states but Mississippi is definitely one of the cheaper states to live in the U.S. and it definitely has its benefits.

The state offers over 50 colleges and universities and is known for its great sense of community. The worries of traffic and smog will fade away after a few months of living here, making Mississippi a great choice and the cheapest state to live in.

​2. Oklahoma

• Cost of Living Index: 85.7

• Living wage per hour: $23.27

• Median household income: $53,840

• Average rent per month: $907

• Average child care: $15,792

Oklahoma has a mild climate, which can be a big drawcard to those who don't like drastic changes in temperatures.

The mild weather makes for beautiful green scenery all year round. For the most part, it has a strong economy.

The cities are full of college students, and there is the vibrancy of big-city life if you want that.

Education opportunities are also vast. Extra study on the side and you might increase your income even more.

​3. Kansas

• Cost of Living Index: 87.2

• Living wage per hour: $23.24

• Median household income: $61,091

• Average rent per month: $942

• Average child care: $16,332

Kansas has plenty of booming industries such as agriculture and aerospace, and also boasts one of the lowest cost of living rates in the U.S.

Kansas also has a good job market with an unemployment rate of less than 4%.

If you enjoy all the seasons, Kansas is the perfect fit. From hot summers to cold winters and everything in between, Kansas offers a variety of climates.

​4. Alabama

• Cost of Living Index: 88.2

• Living wage per hour: $22.47

• Median household income: $61,091

• Average rent per month: $883

• Average child care: $13,319

Alabama has warm weather, great college football, and a low cost of living. The state of Alabama also has one of the lowest unemployment rates in the U.S. and great education - like the The University of Alabama, Auburn University, and Troy University.

Alabama is a great state to live in and has something for everyone. It is rich in culture, has beautiful nature scenes, and has very affordable housing costs.

The cost of living in Alabama is lower than most states in the U.S., making it one of the most popular states to live in for 2023.

5. Georgia

• Cost of Living Index: 89.3

• Living wage per hour: $23.27

• Median household income: $61,224

• ****Average rent per month: $1,090

• Average child care: $14,906

Georgia is a very popular state with more than 100,000 people moving there every year. The state has a laid-back culture, clean air, and good food.

The state of Georgia has plenty of safe cities to live in, which is why it's ideal for young families and college students. With coastal beaches and the popular Georgia State University, the state is known for its southern hospitality.

Here is a list of the 10 cheaper states to live in the U.S.:

• Mississippi (84.9)

• Oklahoma (85.7)

• Kansas (87.2)

• Alabama (88.2)

• Georgia (89.30)

• West Virginia (88.5)

• Missouri (88.6)

• Indiana (88.9)

• Iowa (88.9)

• Tennessee (89.5)

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Lowest Cost of Living Between All States

Here is a full list of the lowest cost and least expensive states to live in, based on the cost of living per state.

To better understand the costs of living costs across all states, we need to take a closer look at the national costs of living.

The average household in the United States spends $61,334 a year on expenses. Of this, around $1,784 (or 34.9%) a month is dedicated to housing and housing-related costs.

While the median price of a single-family home in the U.S. is $396,300, the average rent for a two-bedroom apartment is around $1,295 a month.

American households dedicate a further 16% of their spending to transportation which amounts to about $9,826 a year.

Healthcare costs amount to an additional $5,177 every year, while food, groceries, and dining amount to another $7,317 every year.

Personal income for individuals nationwide is $35,805 while the median household income is $67,521 a year.

The living wage for the United States is $68,808 annually for a family of four.

Living Wage by State

Below is a list of states according to the living wage needed by a household to support themselves, based on a family of four with 2 adults working full-time.

Does your dollar stretch further where you live compared to the rest of the country? Comment below.