10 Cheapest States To Live In For 2023 (2024)

To put it simply, the cost of living is the amount of money that would be required to cover your basic living expenses in a certain place. Typically, these expenses are considered to be your housing and utilities, transportation, healthcare and groceries. The average costs of these expenses are then tallied up and pulled together in a cost of living index to help you better compare the cost of living in different locations.

Cost of Living Index

In order to create a cost of living index, researchers will compile data on the main living expenses to understand the average cost of living for the entire United States. According to data from the U.S. Bureau of Labor Statistics (BLS), the average American household spends about $5,111 on living expenses each month. This comes out to about $61,334 per year.

Of course, this number is just the average and can vary, but by using this as the baseline for comparison we are able to understand just how much the cost will vary state to state. Rather than comparing the dollar to dollar costs, a cost of living index sets the national average monthly cost to 100.

When tallying up the average costs of living for different states, or in some cases different cities, that number is then compared to the national average. For example, the state with the highest cost of living is Hawaii, which scores a 193.3 on the index. This means the cost of living is 93.3% higher than the national average. If a state scores below 100 on the index then it is considered to have a cheaper cost of living than the national average.

Other Factors

While the cost of living index is helpful for getting a quick glance, it isn’t the only statistic to consider.

Take a look at the average salaries for the place you’re looking to move and consider economic factors and employment rates. Higher rates of poverty and unemployment are common factors in many of these less expensive states and it is important to note that lower cost of living usually also means lower wages.

Housing availability can also be an issue, so look and see what is available to purchase and to rent. Be sure to compare what those monthly costs can get you as well. A great way to get an idea is to do a quick search and compare what $150,000 or $300,000 will buy you in one place versus another. In some of these states, that’s enough to purchase a single family home while in urban centers or more expensive states that won’t even cover the cost of purchasing an apartment.

Which leads us to the last factor, location. You’ll find that many of these less expensive states fall in similar regions like the Southeast and Midwest, but that doesn’t mean there aren’t still hotspots in those areas. The cost of living index for each state is based on the average cost of each expense factor across the state, including their urban centers, which are likely to have higher housing costs in particular and less availability.

Take a look at the 10 cheapest states to live in for 2022.

Coming in as the cheapest state to live in in the United States is Mississippi with a cost of living index score of 83.3. It also has the lowest average housing costs in the nation at 33.7% below the national average. The median single family home costs around $140,818.

That being said, the state also boasts the highest poverty rate in the country at 19.5% of the population living below the poverty line. Economic troubles coupled with a struggling education system and an overall low quality of life also put Mississippi high up on the list of worst states to live in.

Pros

• Lowest average housing costs in the nation
• Lowest average transportation costs in the nation
• Warm weather and mild winters
• Plenty of (inexpensive) Southern comfort food

Cons

• Highest poverty rate in the country
• Economic concerns and fewer job opportunities
• Poor quality of education and healthcare system

Related: Moving Companies Mississippi

The great state of Kansas is the second cheapest state to live in with a score of 86.5. Housing is particularly affordable, coming in as the third-cheapest housing costs in the nation with the median cost of a single-family home at around $176,898. The state also boasts one of the lowest unemployment rates in the country, a good sign for their economy.

Pros

• Housing costs 27.4% below national average
• Low unemployment rate
• Barbecue

Cons

• Frequent tornadoes and extreme droughts
• Proximity to airports

Related: Moving Companies Kansas

Alabama the beautiful comes in third for overall lowest cost of living with a 87.9 cost of living index score. The median home price here is $170,184 which is second cheapest behind only Mississippi. Transportation and healthcare costs are also among the lowest in the country, although it still ranks as one of the states with the highest percentage of folks living below the poverty line. That being said, the unemployment rate is quite low at 2.9% which bodes well.

Pros

• Housing costs 29.9% below national average
• Low transportation and healthcare costs
• Proximity to the Gulf Coast

Cons

• Subpar healthcare system
• Dry counties and restrictions on alcohol consumption and purchase are common

Fourth on our list is Oklahoma with an overall score of 87.9. It is also one of the cheapest states in several categories including healthcare, groceries and housing. The median cost for a home in Oklahoma is $151,469. The state also has one of the highest poverty rates in the country at 15.1% and is typically ranked alongside Mississippi with regards to healthcare and education.

Pros

• Housing costs 25.3% below national average
• Healthcare and grocery costs 5.5% below national average
• All four seasons including mild winters and hot summers

Cons

• Tornadoes
• Struggling education and healthcare system
• Rather boring landscape

The Peach State comes in fifth with significantly lower than average housing costs and cheaper than typical transportation and utility costs as well for an overall score of 88.8. The median cost for a single family home in Georgia is $246,272. Georgia also tends to rank slightly higher on lists of fun states to live in due in large part to Atlanta’s continued presence as a southern business hub.

Pros

• Housing costs 25.6% below national average
• Utility costs 9.5% below national average
• Diverse natural landscape
• Proximity to urban centers like Atlanta and Savannah

Cons

• Many allergy-producing plants
• Hot and muggy summers

Yet another Southeastern state joins the list with Tennessee at sixth cheapest and a score of 89.0. Housing prices in the state run slightly less than its southern neighbor at $230,253 for the median price for a single family home. The unemployment rate is still lower than the national average at 3.4% although the poverty rate is high at 13.8%. A unique draw to Tennessee is that they do not have any state income tax on earned wages.

Pros

• Housing costs 20.7% below national average
• No state income tax on earned wages
• Rich musical history for country, rock, blues and jazz
• Whiskey

Cons

• High poverty rate at 13.8%
• Increased traffic due to rapidly expanding cities

Missouri comes in at seventh cheapest with an overall cost of living index score at 89.8. This state borders two of its inexpensive brethren and has a median single family house cost of $194,226, making it a great compromise if you’re having trouble choosing between the South and the Midwest.

Pros

• Housing costs 19.7% below national average
• High minimum wage at $11.15
• Good job market in a variety of fields

Cons

• Crime rates are relatively high in the urban centers
• Hot summers and lots of tornadoes

Bringing in a bit more Midwestern flair, Iowa joins the list as the eighth cheapest state to live in with a score of 89.9. Unlike many states on this list, Iowa has a poverty rate that is lower than the national average at 11%. The median cost of a single family home comes in at $167,036. This sleeper state also comes in ninth place on WalletHub’s list of best states to live in, the highest ranked by far on our list of cheapest states due to its strong economy and education system.

Pros

• Housing costs 24% below national average
• Ranked as one of the best states to live in
• Highly ranked education system
• Home to the Ice Cream Capital of the World (Le Mars, Iowa)

Cons

• Incredibly cold winters
• No mountains or beaches

The land where all country roads lead, West Virginia brings up ninth place on the list with a 90.5 on the cost of living index. This Appalachian state is one of the most affordable places to buy a home with the average cost of a single family home at $117,639. Despite its good housing value, West Virginia is often listed as one of the worst states to live in alongside Mississippi due to concerns around economic growth and the education system.

Pros

• Housing costs 21.4% below national average
• All four seasons
• Beautiful Appalachian landscape

Cons

• Challenging job market
• High poverty rates
• Frequently listed as one of the worst states to live in

To round out our top 10 is the great state of Indiana with a score of 90.6. While all expenses are ranked less expensive than the national average, the housing costs in Indiana is the main appeal with the average single-family home costing $185,805. Overall Indiana falls in the middle of the road on lists for the best state to live in, but they also have one of the lowest unemployment rates in the country at 2.2%.

Pros

• Housing costs 21.7% below national average
• Low unemployment rate at 2.2%
• Great universities like Purdue and University of Notre Dame

Cons

• Cold winters
• Considered to be a bit boring
• High rates of drug addiction and overdoses

Bottom Line

Although moving to one of the cheapest states in the country may seem like a brilliant move for saving some cash, it’s important to consider all of the factors that come into play. Understand what the average wages and employment opportunities are like in your target state. Take time to understand the housing market, what’s available and how much you can get for your money. Consider the kind of lifestyle you want to live and what sort of leisure activities and natural wonders you want access to.

Related: Best cross country moving companies

No matter what state you end up in, we hope that having an understanding of the factors and expenses you’ll encounter will help you make the best choice for your next great adventure.