The US States With The Highest And Lowest Costs Of Living

In the US, Hawaii is the most expensive state to live in, and Mississippi is the least expensive.

By Kari Apted | Published

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In 2022, the United States had the 26th highest cost of living on Numbeo’s list of 139 countries. Within America, there is a wide variation in how much it costs to live in each state. From the most-expensive Hawaii to the least-expensive Mississippi, there are several factors that go into determining how much it will cost to live in a certain location.

Cost of living describes the amount of money needed to cover housing, food, transportation, healthcare, childcare, and other basic expenses. These figures help people decide where to live. They also help employers determine wages and governments determine who qualifies for certain benefits.

Analysts calculate a region’s cost of living index by first determining a baseline for comparison. For ease of calculation, the US baseline is set at 100. States are then ranked according to how they compare to the baseline.

For example, if a state has a cost of living index of 50, that means it costs about half the national average to live there. If the state has a cost of living index of 200, it costs twice the national average to live there. It’s important to know a location’s number when moving for a new job because a salary that sounds high might not actually be generous if it will cost you a lot to meet basic expenses.

World Population Review is a non-political independent organization that provides cost of living data. “The average American household spends $61,334 a year to cover their expenses,” according to their website. “Americans spend an average of $1,784 a month, nearly 35% of their income, on housing.”

Annually, the average American spends $9,826 on transportation, $7,317 on groceries and eating out, $5,177 on healthcare, and $4,441.92 on utilities. “The average family of four in the United States requires $68,808 a year to cover their basic necessities like shelter, food, healthcare, and childcare,” the website says. However, the median household income in the United States falls short, at $67,521 a year.

A glance at the cost index map on World Population Review shows the United States in various shades of yellow, the middle hue on the map’s color key. The redder the state, the higher its cost of living. The only dark red state is Hawaii, which at 193.3 is nearly double America’s average cost of living.

New York has the second-highest cost of living in the US at 148.2. California follows closely behind with an index of 142.2. The following states complete the top ten list of those with the highest costs of living: Massachusetts (135), Oregon (130.1), Alaska (127.1), Maryland (124), Connecticut (121.6), Rhode Island (117.2), and Vermont (117).

At the other end of the spectrum, Mississippi has the lowest cost of living in the US at 83.3 percent of the national average. Kansas is the second least expensive at 86.5. The following states complete the top ten list of those with the lowest costs of living: Oklahoma (87.9), Alabama (87.9), Georgia (88.8), Tennessee (89), Missouri (89.8), Iowa (89.9), West Virginia (90.5) and Indiana (90.6).

Of course, an increasing number of people, especially retirees, are finding the cost of living in the United States prohibitive. If even the least expensive American states still feel too expensive to you, there are other options. You could always Cut the Crap & Move to Costa Rica, a tiny, tropical nation that fell near the middle of Numbeo’s global cost of living list.