Cheapest States to Live In 2020 – Top 5 States Where Your Dollar Will Go Further
- September 27, 2020
- 9 min read
- 68363 reads
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.
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.
- The cost of living in America varies dramatically between each state.
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.
Many remote workers and small online business are taking their ability to work from anywhere and doing just that. They are moving to states where their dollar will stretch much further.
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.
It can be hard to find a balance between the quality of life vs. the cost of living in a lifestyle.
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We have put together a list of our top 5 cheapest states to live in from the MIT data collected for 2020.
If you could work from home and live anywhere you choose, why not consider living in a state where your dollar will go further?
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.
Living in any of these states will allow you to save more of every dollar that you earn.
Here is our Top 10 List of Cheapest States To Live In based on 2 adults working in a household of 4 people.
- Living wage Per Hour: $10.89
- Household Income Before Tax Per Year: $55,683
- Housing: $8,949
- Child Care: $3,845
Ok 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 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.
- 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 is 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.
Compare personal loan rates here
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 drawcards 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.
Here is MIT’s full list of the most affordable states to live in for 2020, based on household income from homesnacks.com.
Does your dollar stretch further where you live compared to the rest of the country? Comment below.