10 Cheapest States To Live In For 2022

10 Cheapest States To Live In For 2022

Everyone’s gotten stuck in the cheap house trap. You’re scrolling along looking at all the big, beautiful homes you could buy for so little money if only you moved to this tiny town you’ve never heard of. Uprooting your life for a cheap house may not be the wisest move, but that doesn’t mean you

Everyone’s gotten stuck in the cheap house trap. You’re scrolling along looking at all the big, beautiful homes you could buy for so little money if only you moved to this tiny town you’ve never heard of. Uprooting your life for a cheap house may not be the wisest move, but that doesn’t mean you shouldn’t consider your options for more budget-friendly states.

While up and moving to the middle of nowhere may not sound appealing, there are plenty of inexpensive places across the country where you could start looking to start yourself on an affordable journey.

We’ve pulled together the 10 cheapest states to live in for 2022, reviewing the cost of living index to help you understand what makes these states so affordable.

Compare Quotes From Top-rated Long Distance Moving Companies

Free, No-commitment Estimates

What Is Cost of Living?

To put it simply, the cost of living is the amount of money that would be required to cover your basic living expenses in a certain place. Typically, these expenses are considered to be your housing and utilities, transportation, healthcare and groceries. The average costs of these expenses are then tallied up and pulled together in a cost of living index to help you better compare the cost of living in different locations.

Cost of Living Index

In order to create a cost of living index, researchers will compile data on the main living expenses to understand the average cost of living for the entire United States. According to data from the U.S. Bureau of Labor Statistics (BLS), the average American household spends about $5,111 on living expenses each month. This comes out to about $61,334 per year.

Of course, this number is just the average and can vary, but by using this as the baseline for comparison we are able to understand just how much the cost will vary state to state. Rather than comparing the dollar to dollar costs, a cost of living index sets the national average monthly cost to 100.

When tallying up the average costs of living for different states, or in some cases different cities, that number is then compared to the national average. For example, the state with the highest cost of living is Hawaii, which scores a 193.3 on the index. This means the cost of living is 93.3% higher than the national average. If a state scores below 100 on the index then it is considered to have a cheaper cost of living than the national average.

Other Factors

While the cost of living index is helpful for getting a quick glance, it isn’t the only statistic to consider.

Take a look at the average salaries for the place you’re looking to move and consider economic factors and employment rates. Higher rates of poverty and unemployment are common factors in many of these less expensive states and it is important to note that lower cost of living usually also means lower wages.

Housing availability can also be an issue, so look and see what is available to purchase and to rent. Be sure to compare what those monthly costs can get you as well. A great way to get an idea is to do a quick search and compare what $150,000 or $300,000 will buy you in one place versus another. In some of these states, that’s enough to purchase a single family home while in urban centers or more expensive states that won’t even cover the cost of purchasing an apartment.

Which leads us to the last factor, location. You’ll find that many of these less expensive states fall in similar regions like the Southeast and Midwest, but that doesn’t mean there aren’t still hotspots in those areas. The cost of living index for each state is based on the average cost of each expense factor across the state, including their urban centers, which are likely to have higher housing costs in particular and less availability.

Take a look at the 10 cheapest states to live in for 2022.

1. Mississippi

Coming in as the cheapest state to live in in the United States is Mississippi with a cost of living index score of 83.3. It also has the lowest average housing costs in the nation at 33.7% below the national average. The median single family home costs around $140,818.

That being said, the state also boasts the highest poverty rate in the country at 19.5% of the population living below the poverty line. Economic troubles coupled with a struggling education system and an overall low quality of life also put Mississippi high up on the list of worst states to live in.

Pros

  • Lowest average housing costs in the nation
  • Lowest average transportation costs in the nation
  • Warm weather and mild winters
  • Plenty of (inexpensive) Southern comfort food

Cons

  • Highest poverty rate in the country
  • Economic concerns and fewer job opportunities
  • Poor quality of education and healthcare system

2. Kansas

The great state of Kansas is the second cheapest state to live in with a score of 86.5. Housing is particularly affordable, coming in as the third-cheapest housing costs in the nation with the median cost of a single-family home at around $176,898. The state also boasts one of the lowest unemployment rates in the country, a good sign for their economy.

Pros

  • Housing costs 27.4% below national average
  • Low unemployment rate
  • Barbecue

Cons

  • Frequent tornadoes and extreme droughts
  • Proximity to airports

3. Alabama

Alabama the beautiful comes in third for overall lowest cost of living with a 87.9 cost of living index score. The median home price here is $170,184 which is second cheapest behind only Mississippi. Transportation and healthcare costs are also among the lowest in the country, although it still ranks as one of the states with the highest percentage of folks living below the poverty line. That being said, the unemployment rate is quite low at 2.9% which bodes well.

Pros

  • Housing costs 29.9% below national average
  • Low transportation and healthcare costs
  • Proximity to the Gulf Coast

Cons

  • Subpar healthcare system
  • Dry counties and restrictions on alcohol consumption and purchase are common

Get Your Free Moving Estimate

Receive a custom quote from a Moving Company today that’s designed to meet your needs and budget by clicking on your state.

Get A Free Quote

4. Oklahoma

Fourth on our list is Oklahoma with an overall score of 87.9. It is also one of the cheapest states in several categories including healthcare, groceries and housing. The median cost for a home in Oklahoma is $151,469. The state also has one of the highest poverty rates in the country at 15.1% and is typically ranked alongside Mississippi with regards to healthcare and education.

Pros

  • Housing costs 25.3% below national average
  • Healthcare and grocery costs 5.5% below national average
  • All four seasons including mild winters and hot summers

Cons

  • Tornadoes
  • Struggling education and healthcare system
  • Rather boring landscape

5. Georgia

The Peach State comes in fifth with significantly lower than average housing costs and cheaper than typical transportation and utility costs as well for an overall score of 88.8. The median cost for a single family home in Georgia is $246,272. Georgia also tends to rank slightly higher on lists of fun states to live in due in large part to Atlanta’s continued presence as a southern business hub.

Pros

  • Housing costs 25.6% below national average
  • Utility costs 9.5% below national average
  • Diverse natural landscape
  • Proximity to urban centers like Atlanta and Savannah

Cons

  • Many allergy-producing plants
  • Hot and muggy summers

6. Tennessee

Yet another Southeastern state joins the list with Tennessee at sixth cheapest and a score of 89.0. Housing prices in the state run slightly less than its southern neighbor at $230,253 for the median price for a single family home. The unemployment rate is still lower than the national average at 3.4% although the poverty rate is high at 13.8%. A unique draw to Tennessee is that they do not have any state income tax on earned wages.

Pros

  • Housing costs 20.7% below national average
  • No state income tax on earned wages
  • Rich musical history for country, rock, blues and jazz
  • Whiskey

Cons

  • High poverty rate at 13.8%
  • Increased traffic due to rapidly expanding cities

7. Missouri

Missouri comes in at seventh cheapest with an overall cost of living index score at 89.8. This state borders two of its inexpensive brethren and has a median single family house cost of $194,226, making it a great compromise if you’re having trouble choosing between the South and the Midwest.

Pros

  • Housing costs 19.7% below national average
  • High minimum wage at $11.15
  • Good job market in a variety of fields

Cons

  • Crime rates are relatively high in the urban centers
  • Hot summers and lots of tornadoes

8. Iowa

Bringing in a bit more Midwestern flair, Iowa joins the list as the eighth cheapest state to live in with a score of 89.9. Unlike many states on this list, Iowa has a poverty rate that is lower than the national average at 11%. The median cost of a single family home comes in at $167,036. This sleeper state also comes in ninth place on WalletHub’s list of best states to live in, the highest ranked by far on our list of cheapest states due to its strong economy and education system.

Pros

  • Housing costs 24% below national average
  • Ranked as one of the best states to live in
  • Highly ranked education system
  • Home to the Ice Cream Capital of the World (Le Mars, Iowa)

Cons

  • Incredibly cold winters
  • No mountains or beaches

9. West Virginia

The land where all country roads lead, West Virginia brings up ninth place on the list with a 90.5 on the cost of living index. This Appalachian state is one of the most affordable places to buy a home with the average cost of a single family home at $117,639. Despite its good housing value, West Virginia is often listed as one of the worst states to live in alongside Mississippi due to concerns around economic growth and the education system.

Pros

  • Housing costs 21.4% below national average
  • All four seasons
  • Beautiful Appalachian landscape

Cons

  • Challenging job market
  • High poverty rates
  • Frequently listed as one of the worst states to live in

10. Indiana

To round out our top 10 is the great state of Indiana with a score of 90.6. While all expenses are ranked less expensive than the national average, the housing costs in Indiana is the main appeal with the average single-family home costing $185,805. Overall Indiana falls in the middle of the road on lists for the best state to live in, but they also have one of the lowest unemployment rates in the country at 2.2%.

Pros

  • Housing costs 21.7% below national average
  • Low unemployment rate at 2.2%
  • Great universities like Purdue and University of Notre Dame

Cons

  • Cold winters
  • Considered to be a bit boring
  • High rates of drug addiction and overdoses

Compare Quotes From Top-rated Moving & Storage Services

Free, No-commitment Estimates

Bottom Line

Although moving to one of the cheapest states in the country may seem like a brilliant move for saving some cash, it’s important to consider all of the factors that come into play. Understand what the average wages and employment opportunities are like in your target state. Take time to understand the housing market, what’s available and how much you can get for your money. Consider the kind of lifestyle you want to live and what sort of leisure activities and natural wonders you want access to.

No matter what state you end up in, we hope that having an understanding of the factors and expenses you’ll encounter will help you make the best choice for your next great adventure.

Your Home. Your Decisions. Our Support.

Get expert advice on your home, design tips, how much to pay for pros and hiring experts, delivered to you daily.

Thanks & Welcome to the Forbes Home Improvement Community!

{{ newsletterState.emailErrorMsg }}

I agree to receive the Forbes Home newsletter via e-mail. Please see our Privacy Policy for more information and details on how to opt out.

The cost of living, which includes all expenses that cover a person’s needs, such as food, housing, healthcare, and transportation, is much higher in some states than others. Housing is the most significant driver behind the cost of living, as costs related to housing account for the largest portion of the average household’s income. Proximity to urban areas impacts the cost of living significantly, with the highest costs of living found in major metropolitan areas where housing costs tend to be the highest. Other factors that influence the cost of living include proximity to resources, taxes, and transportation options.

Researchers, employers, and policymakers use the cost of living index to determine which states have the lowest cost of living. The cost of living index is a tool that compares the prices of basic needs in different regions. The first step in creating the index is determining the average cost of living in the country. This baseline, set at 100, is then used to compare costs across the country. Any index below 100 represents a cost of living cheaper than the national average. The lower the index, the further a dollar goes.

The states with the lowest cost of living tend to be in the Southern and Midwestern regions. The most expensive regions to live in are the Northeast, Pacific Coast, and the non-contiguous states.

The Cost of Living in the United States

To better understand the relative cost of living in the cheapest states, it’s helpful to have a better picture of the baseline. The average American household spends $61,334 a year to cover their expenses. The largest expense for most households is housing, on which Americans spend an average of $1,784 a month, nearly 35% of their income. The median cost of a single-family home in the United States is $273,992. Nationwide, the average rent for a two-bedroom apartment is $1,164 a month.

The average American household spends another $9,826 on transportation annually, accounting for 16% of expenses. Healthcare costs average $5,177 a year. Food, including groceries and eating out, costs the average household $7,317 a year or $609.75 a month. The average monthly cost for utilities in the US is $370.16.

The median household income in the United States is $67,521 a year. For single-occupant households, the median income is $40,464. The living wage, defined as the amount required to cover all necessities, including healthcare and childcare, is $68,808 a year for a family of four.

The Cheapest States to Live

Mississippi

  • Cost of Living Index: 83.3
  • Groceries: 92.2
  • Housing: 66.3
  • Utilities: 90.4
  • Transportation: 86.7
  • Health: 94.7
  • Miscellaneous: 90.0

Mississippi is the cheapest state to live in in the United States. Overall, costs in the state are 17% lower than the national average. Housing costs in Mississippi are the lowest in the nation. The median price for a single-family home in Mississippi is $140,818, and the average rent for a two-bedroom apartment is $777. Mississippi also has the lowest transportation costs in the nation.

However, despite the low cost of living, Mississippi has the highest poverty rate in the United States, with nearly a fifth of residents living at or below the poverty line. Mississippi is also consistently ranked one of the worst states to live in, primarily due to economic and education concerns. A family of four requires an annual income of $80,523 to meet their needs. Meanwhile, the median income for a family of four is $70,656.

Kansas

  • Cost of Living Index: 86.5
  • Groceries: 91.7
  • Housing: 72.6
  • Utilities: 100.2
  • Transportation: 97.3
  • Health: 100.4
  • Miscellaneous: 88.4

Kansas offers the second-cheapest cost of living in the nation. Housing costs in Kansas are 28% lower than the national average, the third-lowest in the country. The average single-family home in Kansas costs $176,898. Rents for a two-bedroom apartment average $862 a month. Groceries and transportation costs are also lower than the national average.

The living wage in Kansas is $89,353 a year for a family of four. The median income for a family of four is $92,980. Kansas has a poverty rate slightly lower than the national average and one of the lowest unemployment rates in the country, at 2.5%.

Alabama

  • Cost of Living Index: 87.9
  • Groceries: 98.2
  • Housing: 70.1
  • Utilities: 100.7
  • Transportation: 92.7
  • Health: 91.2
  • Miscellaneous: 94.3

Alabama is the third cheapest state in the United States, with a cost of living index of 87.9. Housing in the state is the second cheapest, only behind Mississippi. The average single-family home in Alabama sells for $170,184. Rent for a two-bedroom apartment averages $807 across the state. While utilities and groceries are closer to the national average, Alabama’s health and transportation costs are among the lowest in the nation.

A family of four in Alabama requires an annual income of $80,777 to cover their expenses. The median income for a family of four is $80,845 a year. Alabama has one of the highest poverty rates in the country, with 15.6% of residents living at or below the poverty line.

Oklahoma

  • Cost of Living Index: 87.9
  • Groceries: 94.5
  • Housing: 74.7
  • Utilities: 95.1
  • Transportation: 94.8
  • Health: 94.5
  • Miscellaneous: 92.6

Oklahoma has a cost of living index of 87.9 and is the fourth cheapest state in the United States. Oklahoma’s housing prices are 25% lower than the national average and the fifth cheapest in the country. The median home costs $150,754. Rents average $814 a month. Costs for groceries and healthcare are also some of the cheapest in the nation.

The median income for a family of four in Oklahoma is $78,458 a year. However, the living wage for a family of four is $86,333. This disparity is likely responsible for Oklahoma having one of the highest levels of poverty in the country. Fifteen percent of residents live at or below the poverty line. For children, the poverty rate is nearly 20%. Oklahoma also consistently ranks one of the worst states to live in.

Georgia

  • Cost of Living Index: 88.8
  • Groceries: 95.9
  • Housing: 74.4
  • Utilities: 90.5
  • Transportation: 92.6
  • Health: 96.7
  • Miscellaneous: 97.1

Georgia is the fifth cheapest state in the United States. Georgia’s housing expenses are the fourth lowest in the country, with costs 25% lower than the national average. Housing affordability is among the highest in the nation, with over 40% of residents able to afford a new home. Transportation costs in Georgia are also among the lowest in the country. Utility costs average $367.63 a month.

Despite having the nation’s lowest minimum wage, at $5.15 an hour, salaries are generally enough to cover the costs of living in the state. The median income for a family of four in Georgia is $91,161 a year. The same family would need only $85,101 a year to cover necessary expenses. Georgia has an unemployment rate of 3.2%, which is lower than the national average.

Tennessee

  • Cost of Living Index: 89
  • Groceries: 94.7
  • Housing: 79.3
  • Utilities: 92.5
  • Transportation: 88.8
  • Health: 91.2
  • Miscellaneous: 94.2

Tennessee is the sixth-cheapest state in the United States. Tennessee’s overall cost of living is 11% lower than the national average. Housing in the state is 21% lower than the national average, with a typical single-family home costing $231,682 and an average two-bedroom apartment renting for $904 a month. Tennessee also has the nation’s second-lowest-cost of transportation and fifth-lowest cost of healthcare. Utilities cost a typical household $256.83 a month.

The living wage for a family of four in Tennessee is $78,800 a year. The median income for the same family is $85,923. The unemployment rate in the state is 3.4%, while the poverty rate is 13.8%.

Missouri

  • Cost of Living Index: 89.8
  • Groceries: 95
  • Housing: 80.3
  • Utilities: 95.4
  • Transportation: 92.4
  • Health: 94.6
  • Miscellaneous: 93.3

Missouri is the seventh-cheapest state in the United States, with a cost of living index of 89.8. Housing in Missouri is 20% lower than the national average. A typical single-family home in the state costs $194,226, and monthly rents are $834 on average for a two-bedroom apartment. Utilities cost an average of $363.80 a month. Missouri’s cost of living index is below the national average on all metrics, with especially low costs associated with health and transportation.

The living wage for a family of four in Missouri is $86,410 a year, while the median income is $89,418. The minimum wage in Missouri is $11.15 an hour, one of the highest in the country.

Iowa

  • Cost of Living Index: 89.8
  • Groceries: 98.4
  • Housing: 76
  • Utilities: 94.9
  • Transportation: 92.4
  • Health: 94.6
  • Miscellaneous: 93.3

Iowa is the eighth-cheapest state to live in the United States. Costs in Iowa are lower than the national average across all metrics. Iowa’s housing is especially cheap, with an index of 76, the sixth-lowest in the nation. A typical single-family home costs an average of $165,955, while rents for a two-bedroom apartment are $808 on average. Utilities run an average household $336.24 a month.

The median income in Iowa is $95,199 for a family of four, significantly higher than the $89,241 required to cover the same family’s needs for a year. Iowa’s poverty rate is 11%, which is lower than the national average.

West Virginia

  • Cost of Living Index: 90.5
  • Groceries: 96.5
  • Housing: 78.6
  • Utilities: 89.4
  • Transportation: 92.2
  • Health: 88.1
  • Miscellaneous: 99.7

West Virginia is the ninth-cheapest state in the United States. Costs across all metrics are lower than the national average. Housing in West Virginia is the ninth-lowest in the country, and housing affordability is one of the highest in the nation, with 43.5% of residents able to afford a house. The typical single-family home costs $117,768. Rents cost an average of $727 a month. Transportation and healthcare costs are also among the lowest in the nation. However, West Virginia is ranked one of the worst states to live in due to poor economic opportunities, low educational outcomes and infrastructure in need of repair.

The median income in West Virginia is $73,600 for a family of four. However, the living wage for a family of four in West Virginia is $86,704 a year. West Virginia has the nation’s fourth-highest poverty rate, with 16% of its residents living at or below the poverty line.

Indiana

  • Cost of Living Index: 90.6
  • Groceries: 92.7
  • Housing: 78.3
  • Utilities: 99
  • Transportation: 98.3
  • Health: 94.6
  • Miscellaneous: 96.8

Indiana is the tenth-cheapest state to live in the United States. Average costs are 10% lower than the national average, and costs in all categories are below the national average. Housing in Indiana is the eighth cheapest in the United States. Single-family homes cost an average of $185,805, while rents run $840 a month for a two-bedroom unit. Utilities are just below the national average. Healthcare and transportation costs are among the lowest in the nation.

The median income for a family of four is $90,654, while the living wage for a family in Indiana is $81,321.