Cheapest states to live in 2020

Cheapest States to Live In 2021 – Top 5 States Where Your Dollar Will Go Further

  • September 14, 2021
  • 12 min read
  • Read Icon149784 reads

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.

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 live in the hustle and bustle of our big cities is for 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 from 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 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.

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

1. Mississippi

  • Cost of Living Index: 84.8
  • Median Houshold Income: $45,081
  • Housing: $9,229
  • Child Care: $10,195

Okay, so it’s not as glamorous as other states but Mississippi has its positives. For one, you can live cheaper here than in any other state in the U.S.

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: 86.8
  • Living wage Per Hour: $19.33
  • Median Houshold Income: $52,919
  • Annual Housing: $9,835
  • Annual 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.

3. Arkansas

  • Cost of Living Index: 87.8
  • Living wage Per Hour: $19.35
  • Median Houshold Income: $47,597
  • Annual Housing: $8,777
  • Annual 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.

4. Kansas

  • Cost of Living Index: 87.9
  • Living wage Per Hour: $19.48
  • Median Houshold Income: $59,597
  • Annual Housing: $10,200
  • Annual Child Care: $14,046

Kansas is the fourth cheapest state to live in the U.S. and the 15th largest state in the country. Nicknamed the Sunflower State, Kansas is also the largest grower of wheat than any other state and the second-largest producer of beef cattle.

If you are looking for the cheapest place to live in the United States, the state of Kansas is known for its gorgeous sunsets and is a great place to live. It ranks 15th of all states for education and this places Kansas in the top third of the country.

Kansas offers friendly, salt-of-the-earth people with plenty of farmlands, and everything from small towns and rural communities to suburbs and big cities.

5. Missouri

  • Cost of Living Index: 88.9
  • Living wage Per Hour: $19.41
  • Median Houshold Income: $55,461
  • Annual Housing: 9,932
  • Annual 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 2021.

Lowest Cost of Living Between All States

Here is MIT’s full list of the lowest cost and least expensive states to live in for 2021, based on household income from HomeSnacks.

RankStateLiving Wage
1Mississippi$48,567
2Arkansas$49,970
3West Virginia$50,068
4Tennessee$50,152
5South Dakota$50,166
6Alabama$50,585
7Kentucky$51,925
8Ohio$52,013
9South Carolina$52,038
10Indiana$52,038
11Oklahoma$52,805
12North Dakota $ 53,161
13Kansas $ 53,201
14Texas $ 53,201
15Michigan $ 53,281
16Louisiana $ 53,501
17Iowa $ 53,502
18Missouri $ 53,654
19Pennsylvania $ 53,884
20Wyoming $ 54,316
21Nebraska $ 54,332
22North Carolina $ 54,42
23Utah $ 54,627
24Idaho $ 54,631
25Georgia $ 54,964
26Maine $ 55,665
27Arizona $ 56,189
28New Mexico $ 56,228
29Wisconsin $ 56,231
30Nevada $ 56,277
31Montana $ 56,410
32Florida $ 57,029
33New Hampshire $ 58,161
34Minnesota $ 58,289
35Vermont $ 58,841
36Delaware $ 58,886
37Rhode Island $ 59,221
38Oregon $ 59,237
39Illinois $ 59,498
40Washington $ 61,988
41Alaska $ 62,102
42Hawaii $ 62,413
43Virginia $ 62,598
44Colorado $ 62,950
45New Jersey $ 64,436
46Connecticut $ 64,668
47Maryland $ 66,150
48Massachusetts $ 66,376
49New York $ 67,419
50California$68,190

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

Sources
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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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.
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patty_davis
Yes as far as Indiana it is not cheap living here it's expensive and I am going to end off moving out of state the rents and buying homes both are outrageous.
Reply
william_stephens
Connecticut is perfectly ranked on this list.
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