Cheapest states to live in 2020

Cheapest States to Live In 2023 – Top 5 States Where Your Dollar Will Go Further

  • November 15, 2023
  • 17 min read
  • Read Icon402605 reads
Author  Lorien Strydom
Reviewed by  Joe Chappius
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What is the cheapest state to live in?

Quick Answer

  1. Mississippi
  2. Oklahoma
  3. Kansas
  4. Alabama
  5. Georgia

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.

The average price of U.S. residential real estate is up 30% in the last 3 years.

As of September 2023, the average listed house price is $222 per Square Feet, compared to just $171 as recently as September 2020. 

Similar increases can be seen in Canada, with the 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, according to Invezz.com.

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.

1. Mississippi

  • Cost of Living Index: 84.9
  • Living wage per hour: $21.63
  • Median household income: $46,511
  • Average rent per month: $851
  • Average childcare: $11,874

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. Oklahoma

  • Cost of Living Index: 85.7
  • Living wage per hour: $23.27
  • Median household income: $53,840
  • Average rent per month: $907
  • Average child care: $15,792

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.

3. Kansas

  • Cost of Living Index: 87.2
  • Living wage per hour: $23.24
  • Median household income: $61,091
  • Average rent per month: $942
  • Average child care: $16,332

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 in between, Kansas offers a variety of climates.

4. Alabama

  • Cost of Living Index: 88.2
  • Living wage per hour: $22.47
  • Median household income: $61,091
  • Average rent per month: $883
  • Average child care: $13,319

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.

5. Georgia

  • Cost of Living Index: 89.3
  • Living wage per hour: $23.27
  • Median household income: $61,224
  • Average rent per month: $1,090
  • Average child care: $14,906

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:

  1. Mississippi (84.9)
  2. Oklahoma (85.7)
  3. Kansas (87.2)
  4. Alabama (88.2)
  5. Georgia (89.30)
  6. West Virginia (88.5)
  7. Missouri (88.6)
  8. Indiana (88.9)
  9. Iowa (88.9)
  10. 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.

RankStateCost of Living IndexHousingGroceryUtilities
1Mississippi8668.592.687.9
2Oklahoma86.971.093.395.2
3Kansas87.271.79298.1
4Alabama88.269.997.8100.7
5Georgia89.375.493.691
6West Virginia89.367.898.794.5
7Missouri89.979.595.995.3
8Indiana88.977.393.3103.1
9Iowa897210194
10Tennessee89.58094.294
11Arkansas89.978.192.996.9
12Texas90.982.589.9100.5
13Illinois91.480.79892.2
14Nebraska91.583.697.786.5
15Michigan91.680.691.799.1
16Wyoming91.880.410383.2
17Ohio9278.498.794.8
18Louisiana92.886.996.487.6
19New Mexico93.688.298.191.4
20South Dakota93.891104.689.3
21South Carolina94.281.1101110.8
22Wisconsin94.884.197.7102.7
23North Carolina9588.99896.6
24Kentucky95.278.394108.5
25North Dakota96.792.310294.8
26Minnesota96.884101.399.4
27Pennsylvania97.987.4104.9109.9
28Puerto Rico9873.7119.9151.6
29Idaho99.710697.682.2
30Utah102.4108.299.893.1
31Florida103107.6105101.7
32Virginia103.2110.396.398.8
33Delaware103.9103.810394.6
34Montana104.8119102.584.9
35Colorado105.8122.794.290.5
36Nevada105.4118105.194.6
37Arizona106.9121.5101.6100.4
38New Hampshire113.2105.5103.1112.4
39Rhode Island113.8116.9100.1125.8
40Washington113.9125.5108.189.6
41Connecticut116.7122.3104.9131.4
42Vermont116.7130.1107.8120.7
43Maine116.9126.6101.899.8
44New Jersey118.6141.9103.1112.4
45Oregon120.6144.3107.1106
46Maryland125.1162.7112.1106.2
47Alaska126.7120.3135148.4
48New York136.8191.5112.199.5
49California139.8193.2116.4125
50Massachusetts147.9204.7112.8122.9
51District of Columbia 154.5249.6112107
52Hawaii 181.5312.8150.3141.3

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.

RankStateLiving Wage
1South Dakota$28,853
2West Virginia$29,306
3Kentucky$29,459
4Arkansas$29,491
5Mississippi$29,542
6Wyoming$29,629
7North Dakota$29,712
8Tennessee$29,905
9Oklahoma$29,936
10Ohio$29,982
11Alabama$30,248
12Indiana$30,323
13Iowa$30,655
14Idaho$30,663
15Louisiana$30,688
16Montana$30,742
17Nebraska$30,847
18Kansas$30,943
19Missouri$31,060
20New Mexico$31,074
21Michigan$31,077
22Wisconsin$31,235
23Nevada$31,547
24Texas$31,702
25Pennsylvania$32,157
26Alaska$32,406
27Utah$32,408
28North Carolina$32,572
29South Carolina$32,994
30Georgia$33,255
31Florida$33,315
32Arizona$33,442
33Minnesota$33,539
34Delaware$33,551
35Maine$33,696
36Rhode Island$34,045
37Vermont$34,166
38Illinois$34,471
39New Hampshire$35,054
40Connecticut$35,574
41Washington$35,810
42Oregon$36,285
43Colorado$36,285
44Virginia$36,517
45Maryland$37,288
46New Jersey$37,906
47California$40,372
48Hawaii$40,944
49Massachusetts$41,416
50New York$41,700

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

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Lorien is the Country Manager for Financer US and has a strong background in finance and digital marketing. She is a fintech enthusiast and a lover of all things digital.

Financial information reviewed byJoe Chappius
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AF
A Fi. (Mandii)
I meant minimum wage for Texas is currently sitting at 7.25 so when your rent costs 1500 for a one-bedroom apartment all bills not included alone that is 18,000 a year solely on rent and that again is the low end of the majority of available places for a one bedroom one bath only so if you have children this then jumps to near 2100-3400 a month to rent home or apartment either one. Which then comes to 25,200-40,800 a year for rent ALONE nothing else so that piss poor excuse minimum wage Texas has is just not gonna cut it for the average person who doesn't have a degree or skill to catch that 16 per hour and up job depending on the field it is in. And for the minimum wage worker who works 40 hours a week they are bringing home 13,920 gross a year pretax and all the other crap they take from us. So this average minimum wage worker cannot even afford a one bedroom apartment in a shady neighborhood on the lowest end of town let alone every single other bill cost and necessaries to live and make it in the world bills, food, car, insurance, gas, small extras you need like clothes, doctors or dental visits, household items, personal items, phone bills nothing else only rent at the low end being 18,000 a year and the minimum worker gross bring home being 13,920 so that worker is already 4,080 away from paying minimal one bed rent and that's making dollar for dollar what rent costs. How do they expect anyone to make it even have a roof for one single person making their pissant minimum wage and yet everything from housing, vehicle's, insurance, electric and water, internet and phone, streaming tv if you have one by chance, food and gas, home and personal necessary items you need to live like a human being not an animal, foregoing all extras we sometimes need in our lives to help us or to give a small gift to our kids or someone close even once in a blue moon being able to even see a new movie and have a small drink and popcorn to have one night together with your husband or kiddo to break free of the everyday drags and stresses its just not possible in our current conditions and the damn state government doesn't do anything they don't even see or bring out the issues that the actual Texas citizens are drowning in and I don't mean to rich swarms of people who come here after trash talking us and the ones who flock here and just bring their shitty same ways and beliefs they have had from the last place they were they drag them here and mess with our lives. They need to stop step back and look at what the hell they were fleeing from where they were and investigate to get to the root of the problems they ran from not just keep the same ole mindset and views and then push them on our lives until they've got us all dragged into the hell they ran from. Either stop and look at your self the problems you ran from and the underlying problems or get out of our state and crawl back to the hellhole you escaped from.
Reply
TN
the Nisser
Please update the minimum wage mentioned. " The minimum wage of $7.25 per hour leaves families at the poverty threshold."
Reply
    Lorien StrydomAuthor
    Thank you very much for your suggestion. Although I can understand your point, at the moment the federal minimum wage for covered nonexempt employees is $7.25 per hour, as per the U.S. Department of Labor. We'll update the page if this changes. Thanks again!
    TW
    Tessa Wauson
    Texas Government doesn't care about us. They're to worried about themselves. For Exa
    AK
    Anil Kumar
    Great post.
    WM
    William Medina
    Texas don't give crap about it's people
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
    Lorien StrydomAuthor
    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
    Lorien StrydomAuthor
    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.
    CB
    Crystal Budne Alcarez
    Are you kidding me everyone on here in Southern California we are paying nearly $6 a gallon of gas and I pay to live in a 2 bdrm apt is $ 2,220 for rent additional $30 for a parking spot 2nd car additional $50 $123 for gas water trash electricity runs $80 - $150 a month. That doesn't include car insurance medical cell phone and internet because of the damn smart TV. That doesn't include any extras or pets or children.
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