Cheapest States To Live In

The increasing prices of houses, utilities, and transportation have insisted people on changing their environment and look for the cheapest states to live in. If you also face problems managing your monthly budget or plan to move to a new location, we have a list of the cheapest states to live in the US.

We have also discussed some other factors that will help you choose your next house location without any confusion!

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What Factors Make A State Cheap?

Other than the house rent, several factors determine the total cost of living in a state.

Property Tax and Income Tax:

No matter how hard we try, we cannot escape from taxes. However, we can reduce the money we spend on the taxes by moving to an affordable state.

Property taxes are much lower in cheaper states because they don’t have enough population or urbanization. So, their property taxes are much less. As popular states have higher real estate charges, people pay a considerable amount of money on the property tax.

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On the other hand, the state income tax is also essential to consider. Luckily, seven states in the US have no income tax. These are Florida, South Dakota, Washington, Alaska, Texas, Nevada, and Wyoming.

u s map showing which states do not tax income tax and wages

You can also save money by going for state income tax exemptions. All states will have different exemptions for the disabled, blind, veterans, etc. So, if you are applicable for it, you can save money with the lower state income tax.

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Housing Costs:

The housing costs in a state are essential to consider before moving. Many people get confused while choosing the best deal for the house or rental. So, the best idea is to check the average cost of the homes in the area.

You can search the internet and look for houses and rental apartments according to your budget. Some people may fool you by charging more money. So, thorough research can save you from getting into a too small or too large house that doesn’t fit your needs.

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The housing costs play a huge role in making a state affordable for the residents. That is why cheaper states have extremely lower housing costs than the other expensive US states.

Health Care Costs:

The health care costs are much higher for people with chronic diseases, elderly individuals, and children in the house.

As the health care insurances are different for different areas, it is better to consider the insurance before moving into a state. Some states might not offer individual mandates, and you have to cover high health care costs yourself.

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Many affordable states provide financial assistance so that you can cover the health care costs easily.


The schools and universities in the state can also make it affordable. It is because they have less funding for schools. In this way, parents don’t have to spend too much money on the education of their children.

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However, the cost of the house is also affected by the nearby schools. If the schools are easily approachable and of high quality, you may have to pay more house rent than far-off places.

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Grocery Costs:

Many people spend a considerable amount of their salary on groceries and often overlook this factor while looking for states. The thing is, southern states have fewer grocery costs.

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Due to the increased demand for food in several US states, grocery costs are continuously growing. Some states with no income tax might also have high grocery charges. But, all the states do not have food taxes, which makes them affordable.

How Are The Cheapest States Determined?

The Council for Community and Economic Research in the US determines the average cost of living in all the states. Besides the housing costs, it also includes the average costs of groceries, health care, transportation, and other necessities.

According to the cost of living index, the average cost is calculated on a scale of 100. Any state whose average is less than 100 has a living cost below the national average.

On the other hand, states with an average of more than 100 are highly expensive.

So, here is the list of all the states with an average below 100, making them the cheapest states in the US.

List of the Cheapest States to Live In

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1. Mississippi

According to the most recent data, Mississippi is the cheapest state in the US. Its living cost is 15% less than the other US states. Its score on the cost of living index is 84.8, which is well below the national average.

The cost of groceries and health care are also some of the lowest in the whole country.

Despite the lower cost of living, Mississippi has tremendous job opportunities in the agriculture and aerospace sector. The state has around 50 colleges and universities, all of which offer quality education to children.

Average cost of living: $3,589

Median household income: $45,081

Median home price: $128,000

Median rent: $746

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2. Texas

The cost of living index in Texas is 93.9. In this way, the cost of living in Texas is almost 6% less than the national average.

The healthcare and grocery costs in Texas are also less than the other states in the US. While being the second largest state, Texas has vast employment opportunities in almost every sector.

Secondly, Texas has waived off all the income taxes, which is another factor that makes it a cheaper state.

Average cost of living: $4,100

Median household income: $61,874

Median home price: $195,000

Median rent: $900

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3. Iowa

Iowa is one of the best states to live in if you don’t want to spend too much money on the living costs.

The cost of living index here is 83.7, which is quite close to that of Mississippi.

People don’t consider living here often and say that it is only suitable for farming. But, Iowa has many job opportunities for its residents. Its capital, Des Moines, is regarded as the best city to live in the US.

Iowa has the lowest transportation and housing costs, with the housing cost index at 61.1. Besides, the grocery costs are also 9% less than the average cost in the US.

Average cost of living: $3,188

Median household income: $60,523

Median home price: $141,200

Median rent: $789

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4. Tennessee

The high-quality education and no income tax make Tennessee a fantastic place to live.

The cost of living index in Tennessee is 88.7, which is almost 11% less than the national average. It has various job opportunities and lower housing costs, making it an affordable state in the US.

Besides, the state offers many recreational activities. The Great Smokey National Park is the most popular in the US, which is located in Tennessee.

The housing index in this state is also 82.6. Thus, you can buy the best houses at a lower cost.

Average cost of living: $3,417

Median household income: $53,320

Median home price: $164,500

Median rent: $1,315

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5. Oklahoma

Oklahoma is a cheaper state in the US due to the cost of living index being as low as 86.8.

Besides, the housing costs index is 70.1, which makes the prices of their houses half of the average homes in the US. As Oklahoma has much space, you can build a huge house surrounded by greenery.

The rental and transportation costs are also much less in the state of Oklahoma. If you want to start a business, Oklahoma is the best state for you!

But, if you are looking for a job, then Oklahoma is even better. With one of the lowest unemployment rates, Oklahoma has several job opportunities for you.

Average cost of living: $3,037

Median household income: $52,919

Median home price: $124,800

Median rent: $1000

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6. Kansas

The cost of living index in Kansas is 87.5. Apart from the extremely low cost of living, people in Kansas enjoy savings in transportation, grocery, and home costs.

While the grocery bills in Kansas are almost 7% less than the national average, the housing costs are 40% less than the other US states. Both factors make it the best state to invest in homeownership and save your money.

Average cost of living: $3,162

Median household income: $59,597

Median home price: $137,700

Median rent: $858

Georgia - United States Department of State

7. Georgia

Apart from the city of Atlanta, the whole state of Georgia is quite affordable. The cost of living index in Georgia is 90, which is 10% less than the other states of the US.

Georgia is famous for its tremendous job market and affordable groceries and transportation. Also, the housing costs here are remarkably lower than those of other states.

Average cost of living: $4,124

Median household income: $58,700

Median home price: $180,679

Median rent: $1,006

Final Thoughts

Several factors play an essential role while determining the cheapest states to live in. Besides the 7 cheapest states mentioned in this article, you will find others in the US as well. The living costs and taxes fluctuate with time, and people might want to move to other places due to the increased taxes.

So, if you are also planning to move to an affordable state but with quality education and vast job opportunities, the states we mentioned will be one of your choices!

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