Maximizing Satisfaction in States With the Highest Cost of Living 

Evelyn Long

Jan 9, 2024

friends sitting at a table eating dinner

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At some point in your life, you may assess whether moving to states with the highest cost of living makes sense. Perhaps you’re ready for a career change and know high percentages of jobs are in those places. Maybe you’ve already gotten an offer from a potential employer and are strongly considering accepting it. 

People move to high-cost-of-living (HCOL) places for plenty of other reasons, too. Perhaps their relocation happened because of a military spouse’s assignment or the need to move somewhere for college.

Many people who find themselves in states with the highest cost of living end up staying for the long term, even if they initially plan for brief moves. Let’s look at five HCOL states, then explore how you can feel as happy as possible while there — or anywhere. 

What Are the States With the Highest Cost of Living? 

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The first thing to know is that various indexes showing the states with the highest cost of living use different methodologies to make their rankings. However, the data typically examined in these analyses includes expenses related to:

  • Health care
  • Transportation
  • Entertainment
  • Energy
  • Education 

Hawaii

Research that examined living costs for the third quarter of 2023 ranked Hawaii as the most expensive state. Housing and utilities costs were especially high. Since Hawaii is a remote island, this state relies much more on imports than some others. The state also has comparatively less land dedicated to in-state manufacturing and agriculture, further driving the need to get products elsewhere. 

Data from PayScale indicated the living costs are 84% higher than the country’s average for people living in Honolulu. So, people thinking of relocating there are most likely to have the best outcomes if they have well-paying jobs and good budgeting skills. 

Massachusetts

Massachusetts came in second for highest living costs in the study. Housing costs are a major reason why. In ideal circumstances, people should use about 30% of their income onhousing. However, Massachusetts residents who rent use approximately half of what they earn. 

People familiar with the matter also say a lack of housing and high inflation rates make things more difficult for those living in the state. Education costs are high, too, partially due to a lack of public funding and high demand from prospective students. 

Washington, D.C. 

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The District of Columbia was the third-ranked location for highest living costs. It’s not a state, but the researchers chose to include it as such for their study. Housing-related expenses are particularly high here. One reason is that the area has a lot of well-paid government employees. When people’s budgets can accommodate higher-than-average costs for homes, that trend drives up overall expenses as people look for housing.

Costs aren’t high across the board, though. Utility and transportation costs are comparatively more affordable than in other places. Additionally, with its property tax rate of just 0.56%, Washington, D.C. is one of the most reasonable options.

California

The Golden State is next on our list. California has high tax rates and an enduring reputation as an entertainment and tourism hub. Those things make it one of the states with the highest cost of living. After moving there from other states, many people find necessities like groceries and clothing are higher than they used to pay. 

In areas such as Los Angeles, some residents say having a car is necessary due to how spread out things are and because public transportation falls short. One reason for the latter problem is that road traffic can get very congested at peak times. If it will take a while to reach a destination no matter what, many people would prefer to do so in cars if they can afford that option. 

New York 

New York is like many other states with the highest cost of living in that some areas have a housing shortage. Relatedly, people who find places to live may find they must settle for options much smaller than anticipated. That’s particularly common in New York City, where real estate costs are high for what you get. However, many people don’t mind because they’re in such a cultural center. High taxes can make living well more challenging, though. 

New York City has a well-developed public transportation system, which many people find attractive. At the same time, if you own a car and need to park it in the city, get ready for steep associated costs. Some NYC employees compensate by living in New Jersey and commuting to work.

Thriving in States With the Highest Cost of Living 

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Whether you’re planning to live in one of the five states with the highest cost of living mentioned above or another destination with higher-than-average expenses, don’t automatically expect a future of constant penny-pinching. Here are things you can do to increase your happiness in these locations.

Advocate for a Better Salary or Money-Saving Options

Many places in the United States have good income-to-cost-of-living ratios. For example, Roanoke and Blacksburg are a couple of places in Virginia where some living expenses are particularly affordable. However, if you’re somewhere with less reasonable costs of living, think about talking to your boss about a salary bump. Prepare for your meeting by discussing how you keep the company profitable or bring other advantages. 

Alternatively, see if you could work from home a few days a week, reducing the times you must drive to the office or take public transportation. Be honest with your boss about your costs of living and see if they have any other options you might pursue. Working together could bring a mutually beneficial outcome.

Make Small, Purposeful Changes

Think about your typical week. Which activities or responsibilities require the most money? How could you cut down some of those expenses? Remember that you don’t have to make major changes all at once — or at all. Doing something simple, such as shopping for groceries on the way home from work instead of making a separate trip, can help. 

Keep a record of what you do differently and the money saved as a result. Then, it’ll be easier to stay motivated and create new habits. 

Find the Free Stuff

Many states with the highest cost of living still have plenty of free things to keep you entertained. Even though New York City is one of the most expensive places to live, you can enjoy many sights and attractions without spending a cent. 

The next time you feel tempted to indulge in pricey entertainment, challenge yourself to look for free alternatives. Many may surprise you and help you get more acquainted with where you live. 

Succeeding in States With the Highest Cost of Living

Besides trying these tips, consider making strategic home improvements. When you love your abode, you’ll be more likely to enjoy the time spent in it. That could mean you’re more eager to stay home and do low or no-cost activities. 


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