Cheapest states to live in 2020

Cheapest States to Live In 2022 – Top 5 States Where Your Dollar Will Go Further

  • May 6, 2022
  • 21 min read
  • Read Icon216336 reads

Updated May 2022

What is the cheapest state to live in? In this article, you’ll find out. We’re listing the cheapest states to live in the U.S. and their respective average household income, wage per hour, and living costs.

Have you considered moving to a state where your dollar will stretch further?
Deciding where to live has generally been based on our social circles or employment opportunities.

Well, that’s not necessarily a bad idea. The cost of living in the most expensive state vs the cheapest state differs quite a lot, and you could actually be getting much more for your money somewhere else.

Over the last year, the average price of U.S. residential real estate has been up to $27 per square foot from February 2020 to February 2021, an increase of nearly 20%.

With a new era of online business and remote workers on the rise, Americans have the chance to choose communities based on their quality of life rather than employment prospects.

For many, the drawcard to living in the hustle and bustle of our big cities is new opportunities. But big cities are expensive, and the cost of living compared to other areas is through the roof.

Cheapest vs most expensive state

The cost of living in America varies dramatically between each state. From Mississippi being the cheapest state to live in with a median household income of $45,081 to California being the most expensive state with a median household income of $75,235.

The Cost Of Living Index

The Cost of Living index calculates the average cost of living at 100. Every state that averages less than 100 is considered below the national average for the Cost of Living.

State’s that are over 100, their cost of living is above the national average.

The average cost of living takes food, shelter, clothing, utilities, transport, healthcare, public education, and taxes into consideration.

The average cost of living calculated by MIT is $16.54 per hour or $68,808 per year for two working adults in a family of four.

The minimum wage of $7.25 per hour leaves families at the poverty threshold.

Smaller cities or towns can still offer an excellent education, healthcare, and community spirit, along with an increase in your quality of living.

Less traffic, more clean air, cheaper housing, and even fewer taxes in some states are a drawcard.

Living in a state where there is a lower living wage will allow more of your income to become available for investment. Over time this will enable you to gain more financial freedom and build financial peace.

The median household income in the U.S. was $67,521 in 2021, decreasing almost 3% from the 2019 figure of $69,560.

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: 86.1
  • Living wage per hour: $18.07
  • Median household income: $43,567
  • Average rent per month: $795
  • Average childcare: $10,195

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. Arkansas

  • Cost of Living Index: 86.9
  • Living wage per hour: $19.35
  • Median household income: $45,726
  • Average rent per month: $708
  • Average child care: $12,903

Arkansas 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. Oklahoma

  • Cost of Living Index: 87
  • Living wage per hour: $19.33
  • Median household income: $51,424
  • Average rent per month: $879
  • Average child care: $13,581

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

4. Missouri

  • Cost of Living Index: 87.1
  • Living wage per hour: $19.41
  • Median household income: $53,560
  • Average rent per month: $728
  • Average child care: $12,117

Missouri is a beautiful state located in the Midwestern region of the U.S. It has more than six million residents and is the only city in the entire U.S. that has a cave restaurant. The state of Missouri was named after a Sioux Indian tribe called the Missouris.

Missouri 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 Missouri is lower than most states in the U.S., making it one of the most popular states to live in for 2022.

5. New Mexico

  • Cost of Living Index: 87.5
  • Living wage per hour: $19.62
  • Median household income: $48,059
  • Average rent per month: $847
  • Average child care: $12,946

New Mexico is the fifth-largest state in the U.S. and still one of the cheaper states to live in. New Mexico is known for its diverse landscape and white sands, and the fact that you can see five different states from the top of the Capulin Volcano.

New Mexico is a wine country and has more PhDs per capita than any other U.S. state. It has incredible outdoor adventure spaces and a popular state for those who love the outdoors and being surrounded by beautiful nature.

Here is a list of the 10 cheaper states to live in the U.S. in 2022:

  1. Mississippi (86.1)
  2. Arkansas (86.9)
  3. Oklahoma (87)
  4. Missouri (87.1)
  5. New Mexico (87.5)
  6. Tennessee (88.7)
  7. Michigan (88.9)
  8. Kansas (89)
  9. Georgia (89.2)
  10. Wyoming (89.3)

Lowest Cost of Living Between All States

Here is a full list of the lowest cost and least expensive states to live in for 2022, based on the cost of living per state.

RankStateCost of Living IndexHousingGroceryUtilities
1Mississippi86.166.693.292.3
2Arkansas86.975.692.591
3Oklahoma877394.693.4
4Missouri87.178.395.496.3
5New Mexico87.584.494.689.9
6Tennessee88.779.49391.7
7Michigan88.980.29198.5
8Kansas897092.6100.1
9Georgia89.274.396.390.3
10Wyoming89.381.7103.587.4
11Alabama89.369.298100.7
12Indiana9076.492.496.7
13Iowa90.176.598.394.1
14Ohio90.876.197.990.7
15Nebraska90.886.698.688.9
16Kentucky90.0980.193.3104.2
17West Virginia91.177.197.988.2
18Texas91.583.591.2103.3
19Idaho92.3105.592.482.8
20Louisiana93.986.395.686.7
21Illinois94.585.297.495.8
22North Carolina94.991.897.497.2
23South Carolina95.980.1101.8105
24Arizona97106.2101.8105.2
25Wisconsin97.388.6100.998.1
26Florida97.999.6106.9103.1
27Utah98.497.697.993.2
28North Dakota98.893.7102.193.3
29South Dakota99.8112.7101.891.2
30Virginia100.7112.196.196.5
31Minnesota101.690.410596.2
32Pennsylvania101.7100.6109.3109.5
33Colorado105.6116.799.987.9
34Montana106.9105.9103.188.1
35Delaware108.193.3109.5104.3
36Nevada108.5118.5110.887
37New Hampshire109.7110.399.7115.2
38Washington110.7116.7109.291.1
39Vermont114.5136.7109.5120.6
40Maine117.5142100.4107.2
41Rhode Island119.4124.2108.7125.8
42New Jersey125.1137108.7104.6
43Connecticut127.7137.7101.8132.3
44Maryland129.7171.3108.7104
45Alaska129.9126.6132.7157
46Massachusetts131.6179.2117110.8
47Oregon134.2178.110990.1
48New York139.1230.2118.399.2
49California151.7192.7110.3128.5
50Hawaii192.9313.1157.9169.2

Living Wage by State 2022

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.

RankStateLiving Wage
1Kentucky$43,000
2West Virginia$45,000
3South Dakota$45,000
4Arkansas$45,000
5Ohio$46,000
6Missouri$46,000
7Mississippi$46,000
8Idaho$46,000
9Alabama$46,000
10Tennessee$47,000
11South Carolina$47,000
12Oklahoma$47,000
13North Dakota$47,000
14Montana$47,000
15Indiana$47,000
16Wyoming$48,000
17Utah$48,000
18Texas$48,000
19New Mexico$48,000
20Nebraska$48,000
21Louisiana$48,000
22Kansas$48,000
23Georgia$48,000
24Michigan$49,000
25Iowa$49,000
26Pennsylvania$50,000
27North Carolina$50,000
28Wisconsin$51,000
29Washington$51,000
30Maine$51,000
31Arizona$51,000
32Vermont$52,000
33Oregon$52,000
34Minnesota$52,000
35Illinois$52,000
36Florida$52,000
37Rhode Island$53,000
38Nevada$53,000
39Delaware$53,000
40Virginia$54,000
41Colorado$54,000
42Alaska$54,000
43New Hampshire$55,000
44New Jersey$56,000
45California$57,000
46Maryland$58,000
47New York$59,000
48Massachusetts$60,000
49Connecticut$60,000
50Hawaii$61,000

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

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  • 8 out of 10 found this helpful

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    AuthorKimberley Smyth

    Kimberley is the US Country Manager for Financer.com. She has gained years of experience in small business management and has two successful start-ups under her belt. She now focuses her energy on helping others achieve financial freedom through smart money management and investment opportunities.

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    BM
    brian_maris
    GREAT, how about city by city ? St George Utah was the fastest growing city in America. What is our COL index ?
    Reply
      LorienStaff
      Hi Brian, thank you for your feedback - I'm sure we can do a comparison by city, stay tuned!
    MG
    m._goudy
    Washington is ridiculous. My POS house I paid $135K for in 2003 is somehow worth $385K today and I have not done any improvements in 15 + years. Plus, Jay Inslee is adding the Capital Gains tax and our fuel prices are through the roof. I paid $3.99 a gallon today. Plus, the new long-term care tax is taking more money from working taxpayers, and if I move, I won't get the benefit of using it.
    Reply
      LorienStaff
      This is very interesting indeed. Gas prices are now exceeds $4 a gallon with even higher prices expected as inflation is at a record high.
    JF
    jimmy_flow
    What's the difference between the two lists? The first lists the five cheapest states to live in while the second lists the relative cost of living between all states... what makes them different?
    Reply
      LorienStaff
      Hi Jimmy, the first list expands on the top 5 cheapest states to live in, whereas the following table lists all states in order of cheapest to most expensive to live in. The final table shows the living wage needed to live in each state (from lowest to highest) based on a family of four.
    BD
    brian_dobson
    I Can't believe Washington State is 40th. I would have thought it was at least 45th. The influx of Techies in Seattle is making it outrageously more expensive by the day.
    Reply
      LorienStaff
      Thanks for your feedback, Brian! We update the list of states regularly as new information becomes available so please check back in the future.
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