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Life is expensive, and where you live has a bigger impact on your budget than almost any other single decision you make. 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 so you can find your perfect place.
In 2025, Mississippi has one of the lowest costs of living in the whole country. According to MERIC, the state carries a cost of living index of 87.3, meaning everyday expenses run about 13% below the national average. MERIC measures groceries, housing, utilities, transportation, health, and miscellaneous expenses to arrive at this figure.
Although Mississippi may be an inexpensive place to live, it has one of the highest poverty rates in the country. The median household income is $59,127, the lowest of any state, and around 18.2% of residents live below the poverty line per the U.S. Census Bureau ACS 2024. If you move to this state, you may need to work a remote job or have passive income to enjoy the low living expenses.
|
Category |
Mississippi |
National Average |
|
COLI Score |
87.3 |
100 |
|
Housing Sub-Index |
72.8 |
100 |
|
Median Household Income |
$59,127 |
$81,604 |
|
Poverty Rate |
18.2% |
12.5% |
|
Est. Annual Household Cost |
$67,147 |
$78,000 |
Kansas also has an incredibly low cost of living. In 2025, it carries a COLI score of approximately 88.5, about 11.6% below the national average. Although taxes are high, the cost of housing is low and the median household income is approximately $71,000. 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 an unemployment rate of about 2.5%, one of the lowest in the country. 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. That said, Kansas City sits on the Missouri border and offers genuine urban amenities, including live music, professional sports, and a thriving food scene, without the coastal price tag.
|
Category |
Kansas |
National Average |
|
COLI Score |
88.5 |
100 |
|
Housing Sub-Index |
75 |
100 |
|
Median Household Income |
$71,000 |
$81604 |
|
Poverty Rate |
11.3% |
12.5% |
|
Est. Annual Household Cost |
$69,000 |
$78,000 |
The state of Oklahoma is actually the most affordable state in the country by COLI, with a cost of living index of 86.0 in 2025, about 14% below the national average. Oklahoma has a strong economy with plenty of jobs and is also a great place for startups. However, around 15.3% of the population lives below the poverty line per the U.S. Census Bureau ACS 2024, and education ranks lower compared to other 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. These natural hazards can also drive up homeowner’s insurance premiums, so factor that into your total cost calculation before committing. If you’re willing to brave the weather, however, Oklahoma might be ideal for your financial goals.
|
Category |
Oklahoma |
National Average |
|
COLI Score |
86 |
100 |
|
Housing Sub-Index |
76 |
100 |
|
Median Household Income |
$63,000 |
$81604 |
|
Poverty Rate |
15.3% |
12.5% |
|
Est. Annual Household Cost |
$66,284 |
$78,000 |
Tennessee comes in at approximately 89.5 on the cost of living index in 2025. The state has low property taxes. Per SmartAsset, the median annual property tax is just $1,488, roughly half the national average, with an effective property tax rate of 0.45%. Even better, Tennessee fully eliminated its state income tax in January 2021, making it one of only nine true zero-income-tax states in the country. 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 continues to rank among the highest in the country for violent crime rates. 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.
|
Category |
Tennessee |
National Average |
|
COLI Score |
89.5 |
100 |
|
Housing Sub-Index |
80 |
100 |
|
Median Household Income |
$67,000 |
$81604 |
|
Poverty Rate |
13.2% |
12.5% |
|
Est. Annual Household Cost |
$70,000 |
$78,000 |
In 2026, Missouri’s cost of living index sits at 88.6 per MERIC’s Q1 2026 data, ranking it among 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 compared to the national average.
Although most residents are employed, around 12.9% of them live below the poverty line per the U.S. Census Bureau ACS 2024. Crime rates are high in major cities like St. Louis and household income sits at approximately $68,000 annually. However, the state does have six national parks and an exciting sports scene.
|
Category |
Missouri |
National Average |
|
COLI Score |
88.6 |
100 |
|
Housing Sub-Index |
80.0 |
100 |
|
Median Household Income |
$68,000 |
$81604 |
|
Poverty Rate |
12.9% |
12.5% |
|
Est. Annual Household Cost |
$70,500 |
$78,000 |
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.
It’s also worth understanding that low costs and low wages often go hand in hand. If you’re earning a remote salary or have passive income, the gap between what you earn and what you spend is a genuine advantage. If you’re relying on local employment, research what your field pays in that specific state before committing. You can also explore how states with the best income-to-cost-of-living ratios compare, since the cheapest state by index isn’t always the one where your paycheck goes furthest.
If none of these states seem right to you, consider West Virginia, Alabama, Iowa, and Arkansas instead. These states consistently rank among 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.
Note: This article was first published on August 17, 2022, and was revised on June 29, 2026 to reflect the most current information.
