Cheapest States To Live In 2022 – Lowest Cost Of Living

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.

Compare loans in Mississippi

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.

Compare loans in Arkansas

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.

Compare loans in Oklahoma

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.

Compare loans in Missouri

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:

Mississippi (86.1)
Arkansas (86.9)
Oklahoma (87)
Missouri (87.1)
New Mexico (87.5)
Tennessee (88.7)
Michigan (88.9)
Kansas (89)
Georgia (89.2)
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.

Rank	State	Cost of Living Index	Housing	Grocery	Utilities
1	Mississippi	86.1	66.6	93.2	92.3
2	Arkansas	86.9	75.6	92.5	91
3	Oklahoma	87	73	94.6	93.4
4	Missouri	87.1	78.3	95.4	96.3
5	New Mexico	87.5	84.4	94.6	89.9
6	Tennessee	88.7	79.4	93	91.7
7	Michigan	88.9	80.2	91	98.5
8	Kansas	89	70	92.6	100.1
9	Georgia	89.2	74.3	96.3	90.3
10	Wyoming	89.3	81.7	103.5	87.4
11	Alabama	89.3	69.2	98	100.7
12	Indiana	90	76.4	92.4	96.7
13	Iowa	90.1	76.5	98.3	94.1
14	Ohio	90.8	76.1	97.9	90.7
15	Nebraska	90.8	86.6	98.6	88.9
16	Kentucky	90.09	80.1	93.3	104.2
17	West Virginia	91.1	77.1	97.9	88.2
18	Texas	91.5	83.5	91.2	103.3
19	Idaho	92.3	105.5	92.4	82.8
20	Louisiana	93.9	86.3	95.6	86.7
21	Illinois	94.5	85.2	97.4	95.8
22	North Carolina	94.9	91.8	97.4	97.2
23	South Carolina	95.9	80.1	101.8	105
24	Arizona	97	106.2	101.8	105.2
25	Wisconsin	97.3	88.6	100.9	98.1
26	Florida	97.9	99.6	106.9	103.1
27	Utah	98.4	97.6	97.9	93.2
28	North Dakota	98.8	93.7	102.1	93.3
29	South Dakota	99.8	112.7	101.8	91.2
30	Virginia	100.7	112.1	96.1	96.5
31	Minnesota	101.6	90.4	105	96.2
32	Pennsylvania	101.7	100.6	109.3	109.5
33	Colorado	105.6	116.7	99.9	87.9
34	Montana	106.9	105.9	103.1	88.1
35	Delaware	108.1	93.3	109.5	104.3
36	Nevada	108.5	118.5	110.8	87
37	New Hampshire	109.7	110.3	99.7	115.2
38	Washington	110.7	116.7	109.2	91.1
39	Vermont	114.5	136.7	109.5	120.6
40	Maine	117.5	142	100.4	107.2
41	Rhode Island	119.4	124.2	108.7	125.8
42	New Jersey	125.1	137	108.7	104.6
43	Connecticut	127.7	137.7	101.8	132.3
44	Maryland	129.7	171.3	108.7	104
45	Alaska	129.9	126.6	132.7	157
46	Massachusetts	131.6	179.2	117	110.8
47	Oregon	134.2	178.1	109	90.1
48	New York	139.1	230.2	118.3	99.2
49	California	151.7	192.7	110.3	128.5
50	Hawaii	192.9	313.1	157.9	169.2

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.

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

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

Sources

NUMBEOaccessed on May 6, 2022
Living Wageaccessed on May 6, 2022
Only In Your Stateaccessed on May 6, 2022
Liveabilityaccessed on May 6, 2022
Liveabilityaccessed on May 6, 2022
National Park Serviceaccessed on May 6, 2022
SDHDAaccessed on May 6, 2022

brian_maris April 17, 2022

GREAT, how about city by city ? St George Utah was the fastest growing city in America. What is our COL index ?

LorienStaff April 29, 2022

Hi Brian, thank you for your feedback - I'm sure we can do a comparison by city, stay tuned!

m._goudy January 14, 2022

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.

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.

jimmy_flow December 29, 2021

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?

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.

brian_dobson August 5, 2021

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.

LorienStaff November 26, 2021

Thanks for your feedback, Brian! We update the list of states regularly as new information becomes available so please check back in the future.

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

Cheapest vs most expensive state

The Cost Of Living Index

The 5 Cheapest States To Live In

1. Mississippi

2. Arkansas

3. Oklahoma

4. Missouri

5. New Mexico

Lowest Cost of Living Between All States

Living Wage by State 2022

Sources

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