Cheapest States to Live In 2021 – Top 5 States Where Your Dollar Will Go Further
- July 20, 2021
- 10 min read
- 135833 reads
Which are the cheapest states to live in? In this article, you’ll find out. We’re listing the cheapest states to live in the US 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 draw card 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 least expensive state with a living cost of $48,537 to California being the most expensive state with a living cost of $68,190.
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 in 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 draw card.
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 10 list of cheapest states to live in the US 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.
- Living wage Per Hour: $10.89
- Household Income Before Tax Per Year: $55,683
- Housing: $8,949
- Child Care: $3,845
Okay, so it’s not as glamorous as other states but Mississippi has its positives. For one, you can live cheaper here than any other state in the US.
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.
- Living wage Per Hour: $10.67
- Annual Household Income Before Tax: $60,896
- Annual Housing: $8,837
- Annual Child Care: $8099
Arkansas has a mild climate, which can be a big draw card 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.
- Living wage Per Hour: $10.97
- Annual Household Income Before Tax: $60,305
- Annual Housing: $10,230
- Annual Child Care: $8718
Big cities, great music, and incredible food. Tennessee has so much to offer I may move there myself. Home of over 75 colleges and job opportunities within the state are relatively high.
Residents do not have to pay any income tax and housing can cost less than $1000 a month. If cities are not your thing and you crave the outdoors, then Tennessee has that too.
Great Smokey National Park spans over 800 square miles and is the most visited national park in the US.
With low housing costs and strong employment owning your own home may become a reality sooner living in Tennessee.
4. West Virginia
- Living wage Per Hour: $10.83
- Annual Household Income Before Tax: $61,412
- Annual Housing: $8,837
- Annual Child Care: $6,079
The mountain state has so many draw cards from the incredible mountain ranges to the bluegrass genre.
There are no big cities, and there is definitely a small-town feel to everything. The pace of life is a bit slower here.
People that love West Virginia love the outdoors. You will want your own source of income when moving here as the economy can be tough and they may favor locals over outsiders for employment.
But on a plus side if you do work remotely it can be a cheap state to live and enjoy all its natural beauty.
5. South Dakota
- Living wage Per Hour: $10.60
- Annual Household Income Before Tax: $61,410
- Annual Housing: $9,531
- Annual Child Care: $9,726
With cheap housing and high employment rates, people are moving to South Dakota. It is the 5th least populated state in the country, so vast open spaces and a small-town feel will have to be what you are into.
There is a dynamic culture rich with native history. The weather is extreme, but the people are friendly.
The state ranked second for the “best place for children” list released by SmartAsset. If you are looking for somewhere cheap to raise your kids, this might be the place for you.
Lowest Cost of Living Between All States
Here is MIT’s full list of the lowest cost and most affordable states in the us to live in for 2020, based on household income from HomeSnacks.
Does your dollar stretch further where you live compared to the rest of the country? Comment below.