The 10 Cheapest States to Live In

The 10 Cheapest States to Live In

In recent years, the cost of living has become astronomical in some cities. For example, the rental prices in New York and San Francisco make it nearly impossible to afford the bare necessities on minimum wage. However, now that more jobs are going remote, people are no longer tied down by the proximity to their jobs. As a result, more and more people are fleeing from expensive urban centers to states that provide a better quality of life at a lower cost. So if you are trying to get out of the cycle of living paycheck to paycheck, here are the 10 cheapest states to live in 2022.

The Cost of Living Index

These rankings are based on the cost of living which defines the amount of money needed to cover the most basic living expenses. This typically includes all your housing, utilities, transportation, groceries, and healthcare costs. Every year, the U.S. Bureau of Labor and Statistics compiles data from across the country to compare the cost of living between states.

As a means for simple comparison, the BSL created an index with a scale of 100 as the baseline number. A score of 100 represents the average. The current numbers indicate that the average American household spends $5,111 per month which adds up to $61,334 a year on living expenses. Anything higher gets a score of 100+ while states that are below average get a score of less than 100.

10 Cheapest States to Live in 2022

Using the information from this past year, here are the 10 cheapest states to live in 2022.

1. Mississippi

As the first of many Southern states on this list, Mississippi has the lowest cost of living with an index score of 83.3. It also boasts the lowest national average housing costs with a median value of $140,818. However, it also has the highest poverty rate and struggling education and healthcare systems. Although it may be the most economic option, the state also has serious economic problems if you are relying on finding a job in the local community. But if this isn’t a concern for you, then moving to the Magnolia State may be just the ticket to a more comfortable lifestyle.

2. Kansas

The Sunflower State takes the number 2 spot on this list with an index score of 86.5. Residents of Kansas enjoy low unemployment rates and affordable housing. The average cost for a single-family home here is only $176,898. So if you don’t mind rural life and can handle extreme weather, it might be a good option for you.

3. Alabama

Like its next-door neighbor, Alabama boasts one of the lowest overall average cost of living in the U.S. With a score of 87.9 and a median home price of $170,184, it has become a popular destination for those looking for ways to reduce their monthly budget. Alabama also has some of the lowest healthcare and transportation costs as well. And, it also has a very low unemployment rate of 2.9%. However, it still ranks among the highest for people living below the poverty line. But if a mild climate and lower cost of living are what you’re looking for, then Alabama has got what you need.

4. Oklahoma

Those who are looking at the Sooner State will notice many attractive things about the cost of living here. Oklahoma has an index score of 87.9 and claims the top spot as the cheapest state in several categories (housing, groceries, healthcare). Furthermore, the median value of a single-family home here is just $151,469. Unfortunately, it also ranks high in poverty rates and suffers the stigma of poor healthcare and education. While the cost of living is cheaper here, it comes with tradeoffs.

5. Georgia

People are moving to Georgia for more than its peaches. Currently, it ranks as one of the cheapest states to live in with an index score of 88.8. However, home prices are slightly higher here with an average home value of $246,272. But, it makes up for this with cheap utilities, low transportation costs, and tons of activities for those who enjoy the outdoors. Plus, you have close proximity to Atlanta and access to larger venues and transportation hubs which will save you money if you need to travel.

6. Tennessee

The Volunteer State also has a lot to offer, especially to those looking to reduce their cost of living. Tennessee makes this list with an index score of 89.0 and a median home price of $230,253. As a bonus, there’s no state income tax on your earned wages. And, there are several national parks inside state lines that offer breathtaking scenery. While the unemployment rate is below the national average, the poverty rate is higher, suggesting lower wages. This may be a determining factor if remote work isn’t an option for you.

7. Missouri

The Show Me State comes in at number 7 on the list of cheapest states to live in. It borders four other states on this list with a comparable index score of 89.8 and a median price for a single-family home of $194,226. The pros of living in Missouri include a higher minimum wage and a strong job market. However, there are high crime rates in urban centers. But for those who are looking for a middle ground, it’s a good compromise between the Midwestern and Southern states on this list.

8. Iowa

Iowa is a great choice for those who prefer to be more centrally located. With an index score of 89.9 and a median home value of $167,036, life is very affordable here. Its poverty rate is below the national average, has a strong local economy, and a respectable education system. Although it isn’t the most exciting destination on the list, it was named one of WalletHub’s best states to live.

9. West Virginia

Your wallet may thank you if you want to let the country roads take you home to West Virginia. It remains one of the cheapest states to live in with a cost of living index score of 90.5. And, you will find great value in the housing market with an average price of $117,639. However, you will also have to contend with slowed economic growth, a limited job market, and below-average education systems. But for those seeking a remote mountain lifestyle, West Virginia may be just what you are looking for.

10. Indiana

The Hoosier State claims the last spot on this list with an index score of 90.6. If you look at the index overview, all expenses here ranked lower than the national average. The average single-family home costs $185,805 and it has one of the lowest unemployment rates in the country. Indiana is also home to excellent universities if you are willing to withstand the bitter winters.

Final Thoughts

Although this is the official list for 2022, rankings can change from year to year. However, these states consistently find themselves ranked among the most affordable places to live. If the cost of living is a major concern, these states can provide the financial relief you need.

Do you currently live in one of these states? What are your thoughts on the quality of life and cost of living where you are? Share your thoughts in the comments below!

Read More

Posted in: Minimalism and Frugality

Top of page