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Life is expensive. When you factor in the costs of doctor visits, housing, childcare and grocery bills, some states are much more affordable places to live than others. However, the average household income is also an important part of living costs, giving residents more or less money to begin with. Tax policies and utility bills can also affect the total cost of living in any one place. With so many moving variables, it can be challenging to determine which states are truly the cheapest places to live. To help you find the perfect place for you, here’s a quick rundown of five U.S. states with the lowest cost of living.
In 2021, Mississippi had one of the lowest costs of living in the whole country. A study done by the Missouri Economic Research and Information Center gave this state a cost of living index of 83.3. They took groceries, housing, utilities, transportation, health and various other expenses into account for this decision.
Although Mississippi may be an inexpensive place to live, it has the highest poverty rate in the country. The average household income is low and around 21% of residents live below the poverty line. If you move to this state, you may need to work a remote job or have passive income to enjoy the low living expenses.
Kansas also has an incredibly low cost of living, ranking at an index number of 86.5 in 2021. Although taxes are high, the cost of housing is low and the median average income is much higher than that of Mississippi, averaging at $62,087 in early 2021. Partly because it’s an agricultural state, groceries are especially inexpensive.
The agriculture industry in this state also means that the job market is strong, with a low unemployment rate of about 3%. However, this is definitely a rural state for people who enjoy a slow pace of life. If you want to live somewhere with big cities and a lot of things to do, it may be worth it for you to live somewhere more expensive.
The midwestern state of Oklahoma is also an inexpensive place to live, with a cost of living index number of 87.9. Oklahoma has a strong economy with plenty of jobs and is also a great place for startups. However, over 14% of the population lives below the poverty line and education is poor compared to over states.
Although Oklahoma is affordable, it’s not a state that’s filled with stunning scenery. The landscape consists of lots and lots of grassy prairie land and it’s been extensively mined for oil. Because of mining disturbances and the state’s location, earthquakes and tornadoes are both common occurences. If you’re willing to brave the weather, however, Oklahoma might be ideal for your financial goals.
According to the economic study from Missouri’s Research Center, Tennessee comes in at 89.0 on the cost of living index. The state has low property taxes and residents don’t pay state income tax. Exact costs of living will vary depending on whether you live in a major city or a more rural area – Tennessee has plenty of both.
If you do move to Tennessee for the low living expenses, avoid Memphis. This city was ranked number one in 2021 for high levels of violent crime in the U.S. However, other large cities like Nashville and Chattanooga are surprisingly safe for their size. Tennessee also has beautiful scenery and mild winter weather, although it heats up over the summer.
In 2021, Missouri had a cost of living index number of 89.8 and ranked as one of the most affordable states in the U.S. Housing prices are comparatively very low and this state has a strong economy with many job opportunities. The unemployment rate is also low for the nation, at around 3.8% as of 2022.
Although most residents are employed, over 12% of them live below the poverty line. Crime rates are high in major cities like St. Louis and household income is quite low compared to that of other states, averaging around $57,290 in 2020. However, the state does have six national parks and an exciting sports scene.
Finding an Affordable Location
In addition to having a low cost of living, these five states also offer residents many benefits like beautiful scenery, friendly people and stable economies. However, costs of living are never the full picture. Before you pack your bags, remember to consider why these states might be such inexpensive places to live. It’s always a good idea to research specific cities for crime rates and cost of living.
If none of these states seem right to you, consider Georgia, Arkansas, Alabama and Indiana instead. These four states were close runners-up for the most inexpensive places to live in the U.S. and also have much to offer their residents. Wherever you choose to live, remember that hard work and a budget are your best bet for financial security – there’s no perfect place to live.