Cost of Living by State

Rose Morrison

May 27, 2021

cost of living by state

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Did you recently receive a promotion, get married, have kids or experience a similar life-altering change? Then big things are coming your way — one of which may include relocating. If you’re planning on moving, you’ll want to consider cost of living by state.

Regardless of your reasons for wanting to move, you’re probably wondering where you should relocate to. If you don’t have a specific area or city in mind, finding a new place to call home can be intimidating, to say the least. However, figuring out the cost of living by state can help you make the best decision for you and your finances. 

Since prices of goods, services, houses and education can vary by region, it’s important to make sure your salary will adequately cover your expenses. Otherwise, you may have to uproot your family and move somewhere more affordable. By learning more about the cost of living, how it’s calculated and how it differs across the United States, you can make more informed decisions about your finances and build a better future. 

What Is the Cost of Living?

Cost of living refers to the amount of money you need to live comfortably in any given location. This sum will cover basic, necessary expenses like housing, food and health care, and is relative to average wages. For instance, if costs are higher in a city like New York, salary levels may also be higher so people can afford to live there. 

Often, people compare the cost of living in various cities to determine which ones are affordable or more expensive. These numbers will help them decide where to live based on their income and standard of living. 

What Does Cost of Living Include?

The cost of living is complex and can include many different factors. However, most calculations account for housing, food, transportation, utilities, health care, taxes and a few miscellaneous expenses like child care, education and entertainment. Of course, your situation may include more or fewer factors, but the average cost of living is a good starting point for determining which destinations are worth your consideration. 

housing can affect cost of living by state


Housing is the largest determinant of the cost of living by state, and prices can fluctuate immensely based on local real estate market trends. Additionally, some experts include utility costs, homeowners association fees and household maintenance in their calculations, while others only factor in rent or mortgage payments. Thus, housing costs can vary widely between cities and who you ask. 

Calculating your individual housing costs will help you better understand which cities and accommodations are within your budget. Consider your personal living situation. Do you live alone, or do you split costs with someone else? Will you rent or obtain a mortgage? Answering these and other similar questions will help you budget, plan and ultimately decide which housing option and destination are right for you. Considering cost of living by state can help you decide where you should set down your roots.


Most calculations only include money you spend at the grocery store — not at restaurants and eateries. Thus, how close you are to grocers and which kinds of supermarkets you prefer will play into your cost of living. 

Typically, smaller shops are more expensive because they have fewer opportunities to buy items in bulk. Plus, if they’re the only store in the area, they may not offer competitive prices, which can easily increase your grocery bill. You may run into food deserts in some areas, which are places that don’t have access to fresh, affordable, nutritious produce. In this case, food costs can become a determining factor in your overall cost of living and decision to move to a certain location. 

transportating is another factor in cost of living


Likewise, transportation costs can vary from state to state depending on gas prices, whether you own a car, how often you use public transportation and how far you live from work. Therefore, it’s best to analyze your specific situation and include any related expenses in your individual cost of living evaluation. 

Often, public transportation like buses, subways and trains offer cheaper, more sustainable commuting options. All you have to do is buy a pass and hop on. Meanwhile, car owners have to pay for fuel, insurance, maintenance, tires, licensing, registration and taxes. Plus, they’ll lose money over time due to depreciation. In most cases, cost of living estimates account for all of the above so you can plan accordingly. 


While some cost of living assessments include utilities under housing expenses, some do not. That’s why it’s important to consider how much utilities like electricity, gas, heat, hot water, air conditioning, cable, internet, water, garbage collection and pest control might cost on an annual basis in your dream destination. 

In the U.S., average monthly utility costs total about $370. However, if the city or state you plan to move to has community solar programs or your dream house runs on renewables, this sum could be much lower. Likewise, if you’re looking to move someplace with frequent water shortages or a regulated electricity market, you may not be able to choose a provider. Consequently, your utility bills may fluctuate with supply and demand, even if your usage remains the same. 

Health Care

Unless they’re getting married or starting a family, many adults assume health insurance costs about the same in every state. However, expenses and benefits can vary greatly depending on where you live, and some state’s Marketplace may even offer a subsidy or tax credit to lower your monthly payment or out-of-pocket costs. 

Various factors can influence a state’s and city’s health care costs. Demographics, including poverty rates, number of prisoners and retirees, and the population’s age and health can all raise or lower the cost of your policy. Additionally, the area’s economic success will play a key role in determining how much you’ll pay. 


Each year, Americans pay taxes on property, income and sales. How much they owe depends on where they live and will automatically factor into the cost of living. It may be tempting to move to one of the eight states that don’t have an income tax, but property taxes and other fees may be higher there. Therefore, it’s crucial to consider how much you might pay in government taxes overall based on your income bracket. 

Still, each state defines income differently. For instance, New Hampshire doesn’t consider regular income taxable. However, it does apply a flat tax rate to anything citizens earn from dividends and interest. Colorado, Michigan, North Carolina and six other states use the same approach. However, some may use the adjusted gross income to determine how much you pay. All other states use a progressive tax structure that taxes higher income levels at greater rates, regardless of the cost of living. 

Miscellaneous Expenses 

Aside from the necessary expenses above, there are a few other basic costs that many experts use to determine the cost of living in a given location. However, these can be difficult to estimate because child care, education, toiletries, entertainment, haircuts and other costs vary greatly — even within the same city. 

Therefore, it’s important to factor these necessities into your budget based on how much you already pay to create a more accurate picture of how much life will cost in a different state. Remember to include entertainment, clothing, eating out and other related expenses as well. 

a couple moving into a new home

Buying, Selling and Moving

From grocery bills to gas prices, the cost of living in a city affects your day-to-day life and long-term financial health. Your current salary likely covers your expenses right now, but can you enjoy the same standard of living elsewhere? If you aren’t sure, consider purchasing a cheaper house than you can afford so you have a bit of wiggle room after the move. Then, you can reorganize your budget and lower your standard of living if need be. 

Likewise, if inflation, a sudden job loss or low wages make it impossible to save money or afford your current lifestyle, you might move to a state with a lower cost of living. There, you may be able to afford more with your small salary or take a more conservative approach by adjusting your spending to live well within your means. Then, you can focus on building your savings so you can move elsewhere.  

Stipends, Salaries and Subsidies 

Have you been offered a promotion that involves moving to a new city or state? If so, your employer may also provide you with a relocation package to help cover costs associated with the move. While some packages only include a single aspect like a moving truck, others will offer a comprehensive benefits bundle to pay for everything from child care assistance to a down payment on a new house. 

Your employer may also give you a raise if you agree to transfer to a new location. However, it is well within your rights to negotiate better terms if you determine a higher salary still won’t compensate for your increased cost of living. Talk to your boss about education reimbursements, better health coverage, more paid time off or a reoccurring stipend if they don’t agree to a higher salary. 

Sometimes, relocation won’t require you to move. Instead, you’ll work in a different office in the same city. In this case, your transportation costs may increase, but other expenses will remain the same. If your employer isn’t offering a stipend or salary increase to compensate you, ask for a bonus or transportation subsidy instead. These are often easier to obtain as they’re less costly for companies to dole out. 

How Has the Cost of Living Changed? 

Many people feel like their dollars don’t go as far as they used to and, in a way, they’re right. The price for daily goods has increased considerably since 1998 and, while household income has been steadily growing, it has failed to keep up with inflation. In fact, it is 5% below where it should be. Thus, the dollar has much less buying power than it did 20 years ago. 

As a result, nearly half of Americans believe the ever-increasing cost of living to be the biggest threat to their financial security. The increased price of health care is a close second. Thus, many young people are paying more in rent and waiting longer to buy homes than previous generations. They’re also paying more for a four-year college degree and racking up higher student-loan debt. As prices continue to rise, you’ll likely see more people moving to areas with a lower cost of living and working multiple jobs to stay afloat. 

Measuring Cost of Living Changes

The U.S. uses the Consumer Price Index to measure fluctuations in the cost of living. Each month, the Bureau of Labor Statistics reports the CPI. However, due to new product inventions, the CPI inevitably lags a few years behind. Thus, most economists rely on something called a core inflation index, which excludes volatile economic variables. This process allows them to create a more accurate representation of underlying price trends that affect the cost of living. 

make sure to calculate costs when deciding where to move

Comparing Costs

To simplify things, use an index to compare the overall cost of living between geographical areas. While there are various types of indexes, most set a base cost of living, often represented by 100. The base can be the cost of living in one region or a single city. Then, you can measure other areas against the base number accordingly. For instance, if you live in Chicago, use it as a base 100. Cities that are 10% more expensive to live in would be 110, cities 10% less expensive would be 90, and so on. 

You might also use various online cost of living calculators to determine whether or not you can afford to live in a certain state based on your salary. Use multiple sites to get the most accurate comparison and make the most informed decision. 

Building a Better Future 

While the cost of living may be rising, choosing the right place to live can help you budget and save accordingly. By making the right decisions today and living within your means, you can build a better tomorrow for yourself and your kids.

Cost of Living by State











New Mexico

North Dakota


South Carolina













New Hampshire

New York



South Dakota













New Jersey

North Carolina


Rhode Island



West Virginia

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