Expat Rankings

Last updated: 17 August 2023

Average Cost of Living by State in the US in 2023

Table of Contents

Imagine packing your bags, bidding your neighborhood farewell, and embarking on a journey across the great American landscape, a quilt-work of economies and cultures.

But wait – have you considered the price tag attached to your dream destination?

In between dollars and dreams, the cost of living is a crucial point to consider before making a move, for it can turn sunny California into a scorching budget burner or make rural Mississippi feel.

Cost of Living

Cost of Living: What does it entail?

🏠 Housing: Rent or mortgage payments, property taxes, and homeowner’s or renter’s insurance

🚗 Transportation: Car payments, gasoline, insurance, maintenance, or public transit costs

🍎 Food: Expenses for groceries, dining out, and meal delivery services

⚕️ Healthcare: Health insurance premiums, out-of-pocket medical costs, prescription medications

💡 Utilities: Electricity, gas, water, internet, and cell phone services

👕 Clothing: Purchases of new clothing and footwear

🧒 Childcare/Education: Daycare, school tuition, supplies, or extracurricular activities

🏋️‍♀️ Recreation: Costs for hobbies, sports, entertainment, and vacations

🚧 Miscellaneous: Personal care products, household items, insurance, and savings for emergencies

Living Expenses in the US

In the US, a typical family annually spends $61,334 on various necessities. Of this, approximately 34.9%—or about $1,784 monthly—goes towards housing and associated costs. Across the country, the median price tag on a single-family house stands at $273,992, while a two-bedroom apartment typically rents for $1,154 per month.

Moreover, transportation accounts for an additional 16% of the average household budget, amounting to around $9,826 each year. Health care costs add an extra $5,177 per year to the budget. Food expenses, encompassing groceries and dining out, come to about $7,317 annually, or $609.75 monthly. Additionally, utilities on average cost households $370.16 per month.

On the income front, the median annual household earnings across the nation stand at $67,521, whereas individual personal income averages at $35,805. The estimated living wage required for a four-member family in the US is around $68,808 per year.

Cost of Living by State in the US

The table below exhibits the cost of living index by state in the US according to data derived from Numbeo.

State	Cost Of Living Index	Housing Costs Index	Utility Costs Index	Health Costs Index	Transportation Costs Index	Grocery Costs Index	Misc Costs Index
Hawaii	179.00	309.70	141.10	118.40	140.30	125.60	123.80
District of Columbia	148.70	241.80	110.20	104.70	107.90	106.90	117.70
Massachusetts	148.40	219.50	126.10	112.60	127.50	105.00	125.80
California	134.50	186.50	124.80	106.40	124.10	112.30	110.90
New York	125.10	173.30	102.50	104.50	106.70	103.00	109.00
Alaska	124.40	118.10	148.10	149.80	121.90	127.40	118.80
Maryland	119.50	152.20	109.20	96.20	100.20	108.50	108.50
Oregon	115.10	139.90	94.00	101.40	113.60	107.60	105.80
Washington	115.10	129.40	92.20	119.80	117.10	109.70	110.80
New Hampshire	115.00	109.80	130.20	120.60	113.60	102.30	120.80
Vermont	114.90	131.40	120.80	106.20	115.60	103.10	106.10
New Jersey	114.10	136.80	107.20	96.10	106.10	103.90	106.60
Connecticut	113.10	122.70	122.30	109.70	102.60	99.80	111.90
Maine	111.50	118.90	108.00	96.20	112.80	101.20	112.80
Rhode Island	110.50	114.60	109.70	107.40	98.90	100.50	115.20
Arizona	107.20	125.30	94.30	93.50	99.20	101.80	102.10
Idaho	106.10	113.80	84.60	101.20	109.70	103.70	106.30
Colorado	105.50	116.10	90.90	102.00	107.40	100.60	103.00
Montana	103.70	111.40	91.60	95.70	99.40	103.00	103.30
Virginia	103.10	107.70	103.60	102.60	96.50	100.60	102.20
Delaware	102.60	99.70	97.80	104.30	109.50	103.00	103.90
Florida	102.30	110.50	96.70	96.30	99.80	100.10	99.40
Utah	101.50	106.50	93.50	90.30	100.90	98.30	102.90
Nevada	101.30	110.70	96.60	94.90	117.20	102.10	91.30
Pennsylvania	99.00	89.90	105.90	96.70	108.20	100.90	102.00
South Carolina	96.50	89.40	105.30	96.70	91.60	100.10	99.50
North Carolina	96.10	92.10	94.50	109.50	93.50	99.00	97.30
Wisconsin	95.00	84.40	102.80	113.70	98.60	97.90	96.70
North Dakota	94.60	84.30	101.80	111.60	101.40	94.60	96.90
New Mexico	94.20	87.50	93.20	99.60	93.50	96.70	98.30
Minnesota	94.10	82.30	91.50	111.50	99.00	97.20	99.60
Ohio	94.00	80.10	97.20	96.50	97.70	100.90	100.10
Kentucky	93.80	72.50	102.90	81.80	97.70	101.20	106.30
South Dakota	93.80	93.90	87.90	97.00	93.00	98.00	93.20
Texas	93.00	84.20	105.70	94.10	92.60	94.80	95.90
Wyoming	92.80	80.70	85.70	98.60	95.60	102.00	99.00
Michigan	92.70	80.90	99.60	94.00	98.60	97.40	96.80
Louisiana	92.00	84.70	85.30	97.90	97.20	95.10	96.30
Indiana	91.50	77.00	105.40	98.90	95.70	98.00	94.70
Georgia	91.00	78.50	84.40	101.40	94.50	98.90	97.20
Illinois	90.80	78.30	90.90	95.40	102.40	97.50	94.30
Tennessee	90.40	82.90	93.20	88.10	90.00	97.80	92.80
Arkansas	90.30	76.30	91.80	87.20	92.20	95.40	99.10
West Virginia	90.30	70.90	94.50	97.00	97.80	97.70	99.00
Nebraska	90.10	78.40	85.70	97.10	101.80	95.20	94.80
Iowa	89.70	72.40	94.50	99.70	100.60	96.80	95.40
Alabama	88.80	70.40	103.60	86.90	92.00	96.40	96.20
Missouri	88.40	77.20	97.70	89.90	90.30	94.80	91.60
Kansas	87.70	69.40	107.50	97.10	88.30	96.80	91.90
Oklahoma	86.00	68.00	98.20	91.80	92.30	93.80	91.50
Mississippi	85.30	68.60	86.10	97.60	88.60	97.10	91.00

With a cost of living index at 83.3, Mississippi stands as the most economical U.S. state to live in. The affordability is especially evident in the housing sector, with the country’s lowest median price for a standalone home at $140,818 and the most inexpensive two-bedroom apartment rent averaging $991. Mississippi also takes the lead in having the nation’s lowest transportation expenditure.

Kansas follows close behind with a cost of living index of 86.5, second-lowest nationwide. A distinct feature is its reasonable housing sector, where the mean cost for a single-family residence is $176,898 and rent for a two-bedroom apartment comes to about $995 monthly. However, Kansas’s utilities and healthcare costs are marginally above the national average.

💸 "A typical family annually spends $61,334 in the US" 💸

With a cost of living index at 87.9, Alabama ranks as the third most affordable state. It notably offers the second-most affordable housing, with an average single-family house price of $170,184, and the typical rent for a two-bedroom apartment averaging $1,046. Even though its utilities and grocery costs align closely with the national average, Alabama enjoys some of the lowest health and transportation costs in the country.

In stark contrast, Hawaii’s living costs are almost double the national average, as reflected by its leading cost of living index at 193.3. It boasts the nation’s highest housing costs—three times the national average—with an average single-family home costing $730,511, and a two-bedroom apartment renting for around $2,399. Goods, mainly imported, push grocery costs to 50% above the national average.

🏡 "The median price of a single-family house in the US is $273,992" 🏡

New York has the second-highest cost of living index in the U.S., recorded at 148.2. Housing costs, second only to Hawaii, are approximately 1.5 times the national average with a single-family home typically priced at $373,880, and a two-bedroom apartment averaging $1,659 rent statewide. However, costs significantly escalate in New York City, where the same accommodation would cost around $5,874.

With its cost of living index pegged at 142.2, California is the third priciest U.S. state. High transportation costs—fueled partly by expensive gasoline—and housing costs twice the national average make living in California costly. A typical standalone house costs $683,996, while a two-bedroom apartment fetches around $1,884 in rent, with higher figures in major cities like Los Angeles and San Francisco.

Pinching Pennies

Are you living in one of those States with a High Cost of Living? Here are some ways to tighten the belt and save:

🏡 Choose Smarter Housing: Opt for a smaller apartment or a shared housing. Living in more affordable neighborhoods can also help reduce rent or mortgage payments.

🍽️ Cook at Home: Minimize dining out and prepare meals at home to save on food expenses.

🚌 Public Transportation: Use public transit, carpool, bike, or walk instead of owning a car to save on transportation costs.

🛍️ Thrifty Shopping: Costco much? Buy items in bulk, look for sales, and consider shopping at thrift stores or using second-hand platforms.

🌳 Free Entertainment: Take advantage of free or low-cost community events, parks, and public amenities for leisure activities.

💧 Conserve Utilities: Be conscious about energy consumption. Turn off lights when not in use, unplug devices, and use energy-efficient appliances.

📱 Bundle Services: Look for bundle deals for internet, cable, and phone services. It’s often cheaper than paying for each separately.

🏥 Use Preventive Health Care: Regular check-ups and a healthy lifestyle can prevent high medical costs in the future.

📚 Self-Education: Learn to do things yourself to save on services like cleaning, minor repairs, and personal grooming.

My Experience

I lived in New York, one of the most expensive states, for over a decade in 2000’s and boy do I know what ‘expensive’ means. Yes, it was fun, it was vibrant, but all these came with one giant price tag attached.

The everyday cost of living was unmistakably high and is felt most in areas like housing, transportation, and dining out. Renting an apartment in a nice and safe neighborhood in the Upper West side took up a substantial part of my monthly income. Even simple pleasures like grabbing a coffee or taking a taxi ride quickly added up.

This financial reality hit me hard when I first moved to the city. There were times I felt overwhelmed and trapped by the mounting expenses, as though the city itself was demanding more than I could afford.

Over time, however, I developed methods to navigate the costs. I seeked out hidden gems, like affordable local eateries, and embraced public transportation to save on commuting costs. By prioritizing my expenses and embracing a more frugal lifestyle, I managed to carve out a space for my life in New York.

Cost of Living by State: Conclusion

The cost of living is a crucial component to consider when planning our finances or deciding where to reside. It indicates the economic conditions of a region, highlighting the expenditure required for essentials such as housing, transportation, food, and healthcare.

The contrast between states like Mississippi, Kansas, and Alabama, where living costs are considerably low, and high-cost states like Hawaii, New York, and California, demonstrates the broad economic diversity across the US.

Americans need to balance these costs against their incomes and lifestyle preferences. Opting for affordable housing, cooking at home, utilizing public transportation, and being a smart shopper are some strategies to employ to achieve such balance.

If you enjoyed this article, you may also be interested in reading up on the cheapest states to live in, as well as the most expensive states to live in.

Frequently Asked Questions

What does the term 'cost of living' mean?

The term cost of living refers to the total amount of money required to sustain a certain standard of living, including basic living expenses like food, housing, transportation, and healthcare.

What is the relevance of economic research in understanding the cost of living?

Economic research plays a crucial role in ascertaining, tracking, and comparing living costs across various regions. These assessments help formulate policies and interventions that respond to living cost disparities.

What is a living comparison calculator and how does it work?

A living comparison calculator, or a living calculator, is a tool used to compare living expenses between different cities or states. A living calculator computes the difference in costs of housing, transportation, grocery items, health care, and other consumer goods, providing an index value for a straightforward comparison.

What factors contribute to the variation in living costs across the country?

Several factors contribute to the differences in living costs, including regional differences in wages, real estate prices, taxes, healthcare costs, and the prices of goods and services. Even within a country or a city, living costs can vary significantly, especially between urban and rural or metropolitan areas.

Which is the most expensive state to live in the US?

As of the latest data, Hawaii holds the record for the highest cost of living index, making it the most expensive state to reside in the US.

What does the Bureau of Labor Statistics tell us about the cost of living?

The Bureau of Labor Statistics provides valuable data that reflects the costs of living across the nation. This includes changes in prices for consumer goods, housing, healthcare, and more, which can inform people's decisions about where to live.

Where can one find the lowest cost of living in the US?

Currently, Mississippi has the lowest average cost of living in the country, making it an attractive destination for those who have lower income and are seeking lower costs.

How does the cost of living impact the unemployment rate in a city?

High living costs in a city can impact the unemployment rate in several ways. High costs may deter job seekers from moving to the city for employment, potentially leading to labor shortages and increased unemployment rates. Conversely, cities with high average cost of living often offer high salaries, which can attract a large workforce and reduce the unemployment rate. Therefore, the relationship between living costs and unemployment rates can be complex and vary from city to city.

What is the impact of high living costs on people with low incomes?

High living costs can pose significant challenges for individuals or families with low compensation. If prices for housing, food, and other necessities are high, they may find it difficult to meet their needs. However, some high-cost cities also provide more opportunities for high-paying jobs, which can help offset the cost of living.

How can one economize in states with high costs of living?

Living in a high-cost state doesn't have to drain your finances. Strategies such as downsizing your housing, using public transportation, shopping smarter for groceries, and utilizing community and economic resources can help manage money better.

How do living indexes help in understanding the cost of living?

Living indexes are useful tools for grasping the nuances of living costs. They give a comparative example of how expensive or cheap a city or state is in relation to a baseline, helping individuals make informed decisions about relocation or lifestyle adjustments.