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18 American States With the Lowest Cost of Living

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When considering where to live, the cost of living is an important factor for many, influencing decisions for recent graduates, families, and retirees. The cost of living index, where the national average is set at 100, helps compare the affordability of different areas by accounting for essential expenses like housing and groceries. 

A state with a cost of living index below 100 is generally cheaper, while an index above 100 indicates a higher cost of living than the national average. Understanding these numbers can significantly influence where you decide to build your future.

Here’s a compiled list of the states in the U.S. where your dollar goes further, offering a blend of affordability and quality of life.

1. Oklahoma

Oklahoma City
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The cost of living in Oklahoma is estimated at $38,650 per year, scoring 86.2 in the cost of living index, which is 13.8% lower than the average state. Food prices are slightly lower than the national average.

Housing in Oklahoma offers excellent value, with a housing index of 68.5. Here, you’ll enjoy low costs for utilities, healthcare, and miscellaneous expenses.

2. Mississippi

Jackson Mississippi aerial view MSN
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Mississippi emerges as a budget-friendly state, with an estimated yearly cost of living of $32,336 and a cost of living index score of 86.3. Here, grocery prices hover close to the national average.

Mississippi offers affordable housing to its residents, as shown by its housing index of 70.9. The cost of utilities, transportation, healthcare, and other expenses is lower than the national average, providing economic benefits to the people living in Mississippi.

3. Kansas

Wichita, Kansas
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Kansas promotes an affordable lifestyle, reflected by an 87.1 cost of living index. The monthly expenses for a family of four are $4,644, while the monthly cost for a single person is $2,531. Furthermore, its grocery prices remain near the national benchmark.

The state’s housing is particularly affordable, evidenced by a housing index of 67.4. Even though utility costs are slightly above average, transportation, healthcare, and daily expenses remain lower than in other states.

4. West Virginia

Charlestown West Virginia MSN
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West Virginia’s cost of living index is 87.7, marking it an economical option. Its overall cost of living is 12.3% below the national average, and its grocery prices closely align with the national average.

Housing significantly reduces expenses in West Virginia, with a housing index of 66.9. Housing costs are 20% less than the national average. The cost of utilities, transportation, healthcare, and other necessities are around 6% lower than the national norm, so you can live affordably in West Virginia.

5. Alabama

Orange Beach, Alabama
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With a cost of living index of 88.3, Alabama ranks as the fifth most affordable state. In 2023, a typical single person’s annual cost of living will be around $39,657. Groceries in Alabama are slightly cheaper than average, at an index of 96.1.

The housing index in Alabama stands at 70.0, which indicates affordable home options. Though utilities slightly exceed the average at 102.4, transportation, healthcare, and other necessary expenses are between 5% and 13% lower than average.

6. Missouri

St. Louis Missouri downtown cityscape MSN
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Missouri’s cost of living index 88.5 positions it as an economical choice. A single resident in Missouri expects to incur an average monthly living expense of about $1,957. Its groceries, less expensive than the national average, have an index of 95.3, with residents typically allocating slightly more than $300 per month.

Housing in Missouri is notably affordable, with a housing index of 77. The estimated average home value in the state is roughly $227,347. Other expenses, such as utilities, transportation, and healthcare, fall around 10% below the cost in other states.

7. Arkansas

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Arkansas is an affordable state with a cost of living index of 89.0, 11% lower than the average. That means a dollar stretches further here than in other states with higher living costs.

Housing is incredibly cheap in Arkansas, with an index of only 74.6, 25% lower than the national average. The utility, health, and transportation costs are around 10% lower in Arkansas compared to other states, making it a good choice to settle.

8. Tennessee

Nashville, Tennessee
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Tennessee impresses with a cost of living index of 90, more affordable than many states. The average cost of living is estimated at $42,469 per year. Grocery prices, however, are comparable to the national average (indexed at 97.7).

Tennessee’s housing is still affordable compared to other states, with a housing index of 82.4. Overall, Tennessee is a great budget-friendly state where you can save money on utilities, transportation, and healthcare expenses.

9. Iowa

Des Moines Iowa skyline MSN
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Iowa offers affordability, with a cost of living index of just 90.3, 9.7% lower than the national average. It has slightly below-average food prices, as demonstrated by a grocery index of 96.6.

Housing costs are also below average, with an index of 74.1. While utilities, transportation, and healthcare hover around the national average, their costs don’t overburden residents.

10. Michigan

Frankenmuth, Michigan
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Michigan’s cost of living index of 90.6 makes it a 9.4% less expensive option than many states. The grocery index, at 98.8, aligns closely with the national average.

Michigan’s housing index of 77.1 shows that affordable housing is a key benefit. The typical rent for a two-bedroom apartment is $757 monthly, cheaper than the national average of $1,295. While utility costs are slightly high, expenses for transportation, healthcare, and other needs remain manageable.

11. Georgia

Augusta, Georgia
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Georgia’s cost of living index of 90.8 offers reasonable living costs. Groceries here are cheaper than the national average, as indicated by a grocery index of 98.1. The monthly costs for a family of four amount to $2,133 without rent.

Georgia’s housing has good value for money, rated at 78.2. The state offers affordable transportation and utilities, though healthcare expenses slightly surpass the average.

12. Nebraska

Omaha, Nebraska
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Living in Nebraska costs an estimated $2,081 monthly, approximately 9% less expensive than the national average. Its cost of living index is 90.9, and groceries are cheaper than in many places, with a grocery index of 95.8.

Housing is also economical in Nebraska, evidenced by a housing index of 78.6. Transportation and healthcare expenses align with national averages, while utility and other miscellaneous expenses remain reasonable.

13. Louisiana

Bourbon St. New Orleans Louisiana MSN
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Louisiana’s cost of living index is 91.0, indicating reasonable living expenses. The estimated monthly living costs are $1,933, about 8% cheaper than the U.S. average. The grocery index here (95.0) is lower than the national average.

Housing affordability is a highlight in Louisiana, with an index of 81.6. Utilities, transportation, and healthcare are also more affordable than the national average, along with miscellaneous expenses.

14. Indiana

South Bend, Indiana
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Indiana offers a lower cost of living, with an index of 91.0, estimated at $42,697 annually. Groceries nearly match the national average, as seen in a grocery index of 98.5.

The state provides excellent housing value with a low index of 75.8. Though utilities cost a bit more, transportation and healthcare expenses remain manageable.

15. Kentucky

Lexington Kentucky aerial view MSN
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Kentucky features an affordable lifestyle, evidenced by a cost of living index of 92.0, 8% lower than the national average. However, grocery shopping trends are higher than the national average, with an index of 101.3. Housing costs significantly less, highlighted by an index of 73.7, 27% lower than the national average.

While utilities in Kentucky are 4% higher than average, you’ll find transportation and healthcare between 8% and 18% cheaper in Kentucky.

16. Illinois

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Living in Illinois is comparatively affordable, with a cost of living index of 92.1, estimated at $49,558 per year. The grocery index hovers around the national average at 98.0.

Housing costs in Illinois are relatively low, as shown by an index of 79.8. While transportation costs might be higher, utilities, healthcare, and other expenses are reasonably priced.

17. South Dakota

Sturgis South Dakota Annual Motor Bike Rally MSN
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South Dakota’s living costs are manageable, with a cost of living index of 92.4. Groceries are more affordable here, with an average monthly cost of around $408 and a grocery index score of 97.0.

Housing is priced reasonably, evidenced by an index of 87.1. Utility, transportation, and healthcare costs fall below the national average, underscoring South Dakota’s economic advantage.

18. Wyoming

Grand Tetons
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Wyoming offers manageable living costs at an index of 92.4. The average cost of living is estimated at $1,764 monthly, roughly 8% lower than the average cost of living in the United States. Despite slightly higher grocery prices at 102.3, housing affordability is marked by an index of 80.0.

While healthcare costs match the national average, Wyoming offers lower-than-average utility and transportation expenses. Overall, it’s an affordable state to live in.

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