Cheapest States to Live In 2023 – Top 5 States Where Your Dollar Will Go Further
- February 23, 2023
- 17 min read
- 379556 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.
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%.
Similar increases can be seen in Canada, with personal finance site PiggyBank reporting only 21% of non-homeowners feeling they are ‘very likely’ to own a home one day.
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 $46,511 to Hawaii being the most expensive state with a median household income of $83,173.
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.
States 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. Also, you can always keep your cv updated with the help of a free cv template to find a job in these states.
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.
- Cost of Living Index: 84.9
- Living wage per hour: $21.09
- Median household income: $46,511
- Average rent per month: $851
- Average childcare: $10,960
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.
- Cost of Living Index: 85.7
- Living wage per hour: $22.06
- Median household income: $53,840
- Average rent per month: $907
- Average child care: $14,600
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.
- Cost of Living Index: 86.4
- Living wage per hour: $23.24
- Median household income: $61,091
- Average rent per month: $942
- Average child care: $15,100
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 inbetween, Kansas offers a variety of climates.
- Cost of Living Index: 87.5
- Living wage per hour: $21.16
- Median household income: $61,091
- Average rent per month: $883
- Average child care: $12,320
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.
- Cost of Living Index: 87.8
- Living wage per hour: $22.53
- Median household income: $61,224
- Average rent per month: $1,090
- Average child care: $13,781
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. in 2023:
- Mississippi (84.9)
- Oklahoma (85.7)
- Kansas (86.4)
- Alabama (87.5)
- Georgia (87.8)
- West Virginia (88.5)
- Missouri (88.6)
- Indiana (88.9)
- Iowa (88.9)
- Tennessee (89.5)
Lowest Cost of Living Between All States
Here is a full list of the lowest cost and least expensive states to live in for 2023, 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 2023
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.
- NUMBEOaccessed on January 23, 2023
- Living Wageaccessed on January 23, 2023
- Only In Your Stateaccessed on January 23, 2023
- Liveabilityaccessed on January 23, 2023
- Liveabilityaccessed on January 23, 2023
- National Park Serviceaccessed on January 23, 2023
- SDHDAaccessed on January 23, 2023
- HomeSnacksaccessed on January 23, 2023
- FREDaccessed on January 23, 2023
- World Population Reviewaccessed on January 23, 2023
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