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 Quality Verified At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain our editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria. You might have picked where to live based on the job market or school district — or even the weather. But what about the local cost of living? How much you spend on major expenses like housing, groceries, and insurance all affect your cost of living – and prices for goods and services can vary widely by location. And that means a state’s cost of living can be the difference between being financially comfortable or struggling to keep your head above water. To compare the cost of living across the states, Insure.com ranked each using the Cost of Living Index published for the first quarter of 2022 by the Council for Community and Economic Research. We used the index, which tracks regional differences in the cost of consumer goods and services, to evaluate several factors such as housing, groceries, transportation, utilities, and health care. We also included the cost of auto and home insurance. Items were weighted by Insure.com by what we deemed most necessary. Our base cost of living is represented by 100; in this case, 100 represents the national average. Locations are then indexed against this number. For example, a state with a cost of living of 110 would be 10% higher than the national average. Based on our cost-of-living assessment, Hawaii is the most expensive stateat 188.29 while Mississippi is the least expensive at 83.89. So, if you are considering moving, or simply want to know how your state stacks up, read on for more information about the cost of living by state. Key Takeways
What is cost of living?Cost of living refers to the amount of money you need to cover basic living expenses in a certain location. That can include the average cost of rent/mortgage payments, utilities, food and groceries, healthcare, insurance, transportation and other goods and services. Cost of living can tell you how expensive it is to live in one area versus another. Usually, a cost of living index is used to compare this information. Curious how the different states compare when it comes to cost of living? Check out our graph below.
Hawaii has a cost-of-living index of 188.29, indicating that it is 88.29% more expensive to live there than the national average. Mississippi ranks lowest on the index with an index value of 83.89, suggesting a 16.1% savings over the national average when compared to its productivity levels and standard of living. A state like California or Hawaii has much higher rates than areas like Utah and Idaho. However, the cost of living varies by region within a state, too. Rural areas usually have a lower cost of living than suburban and urban areas. Even metro areas within the same state vary. One example is Texas. Cities like Houston, Dallas, El Paso, San Antonio, Austin, Amarillo, and Beaumont are all proudly Texan, but the cost to live in each varies. The more congested Northeast isn’t immune to the substantial cost of living shifts either. New York has the New York City area, Long Island and Westchester County, which all have high costs. However, The Empire State also includes more affordable areas like Albany, Rochester, Utica and Buffalo. So, don’t write off an entire state if it has an overall high cost of living. Instead, dig deeper into the numbers to gauge specific regional costs. Cheapest states to live inAccording to our data, the Midwest and Southern U.S. are the cheapest states to live in. Here are the 10 states with the lowest cost of living and how they compare to the national average:
Most expensive states to live in the U.S.As far as the most expensive states (we also include Washington, D.C.) to live in, they tend to fall along the two coasts. Here are the 10 most expensive states to live in and how their cost of living compares to the national average:
Why cost of living mattersA state’s cost of living has a major impact on your ability to save money and build your wealth. If you live in an area with a high cost of living and don’t have the income to support it, you could end up living paycheck to paycheck. On the other hand, a lower cost of living means expenses are relatively low, so you may have more room in your budget to save, invest, or spend on items you need – or want. However, keep in mind that wages often mirror the cost of living. If you live in an expensive area such as San Francisco or Washington, D.C., your salary will likely be higher to account for that. If you live in Kalamazoo, Michigan, or Jackson, Mississippi, your expenses will be much lower – but so might your salary. What is a cost of living adjustment (COLA)?When looking at the cost of living, many people often wonder about a term they often hear: cost of living adjustment. In order to account for inflation and ensure that Americans who rely on certain government benefits can afford to live, a cost of living adjustment (COLA) is sometimes made to Social Security and Supplemental Security Income (SSI). Established in 1972, the adjustment is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by the Bureau of Labor Statistics. The COLA for 2022 was 5.9%. Cost of living calculatorWhether you’re moving for a job or relocating in retirement, our cost of living calculator can help you evaluate how much it’ll cost you to live in your new destination. For instance, compare costs related to major budget categories like housing, groceries, utilities, transportation, health care, other goods and services and home and auto insurance. You can compare any two factors side-by-side. Our cost of living calculator also provides the salary you’ll need to maintain your current standard of living. Knowing what you’ll need to earn to maintain your lifestyle gives you critical information to see if moving to that area is worth it. Moving From Please enter valid city/zip Moving To Please enter valid city/zip Current income after-tax $ Please enter salary Value must be less than 10 digit MethodologyA cost of living index evaluates several factors, which are weighted in terms of importance. Below are the eight main expense categories we used to gauge cost of living, from most to least important:
We then ranked the states by those results. The base cost of living is always represented by 100; in this case, 100 represents the national average. Locations are then indexed against this number. For example, a state with a 110 on the cost of living index would be 10% higher than the national average. Frequently asked questionsWhat is the cheapest state to live in?Mississippi is the cheapest state in terms of cost of living. Mississippi costs are lower than the state average in every category except for home insurance costs. Home insurers base rates on risk. Weather-related claims, such as hurricanes, fires and break-ins lead to higher costs. What is the best state to live in financially?Just because it’s cheap to live in a certain state doesn’t necessarily mean it’s the best place to live for your finances. You’ll also want to consider factors like the unemployment rate, average wages, tax rates, and more. That means states with more expensive costs of living could still be financially comfortable if there’s a strong job market, high salaries, low taxes, etc. And these factors can shift over time, meaning the best state to live in financially isn’t always the same. If you’re thinking about moving for financial reasons, you can use the cost of living calculator to see how different states will impact your bottom line. Then do some research to find out the health of the local economy. How much has the cost of living increased?The cost of living has increased at its fastest pace in decades. As of June 2022, the Consumer Price Index increased 9.1% from a year ago. Prices for gasoline (59.9%), new cars (11.4%) and food (10.4%) were some of the biggest contributors. Casey Bond is a seasoned writer and editor who has covered personal finance for more than a decade. Previously, she reported on money, home and living for HuffPost. She has held editorial management roles at Student Loan Hero and GOBankingRates. Her work has appeared in Forbes, Money.com, Yahoo! Finance, U.S. News & World Report, and more. In 2019, she won a NEFE Excellence in Personal Finance Reporting Award. She is also a Certified Personal Finance Counselor. What is the least most expensive state to live in?As of August 2022, Mississippi is the least expensive state to live in, according to worldpopulationreview.com. The Magnolia State has a cost of living index of 83.3.
Which are the 10 most expensive states to live in?New Jersey Real Estate Network used Council for Community & Economic Research data to find the cost of living by state during the second quarter of 2022.. #8. Oregon. ... . #7. Maryland. ... . #6. Alaska. ... . #5. New York. ... . #4. California. Updated Oct 10, 2022. ... . #3. Massachusetts. ... . #2. Washington DC. ... . #1. Hawaii. Updated Oct 10, 2022.. What are the top 5 affordable states to live in?Here are the 10 most affordable states in the U.S. for moderately affluent households:. Tennessee. Average cost of living index: 89.5. ... . Iowa. Average cost of living index: 89. ... . Indiana. Average cost of living index: 88.9. ... . Missouri. Average cost of living index: 88.6. ... . West Virginia. ... . Georgia. ... . Alabama. ... . Kansas.. What are the 4 most expensive states to live in?15 Most Expensive States in America to Live In. New Hampshire. At the bottom of the list is New Hampshire, landing at No. ... . Washington. With its mild climate, it's no surprise to see Washington in the No. ... . Vermont. ... . New Jersey. ... . Maryland. ... . New York. ... . Massachusetts. ... . Hawaii.. |
Most expensive to least expensive states to live in
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