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13 States With the Lowest Cost of Living

Maybe you’re curious. Maybe you want to move. Or maybe you’re just sick of paying out the nose for housing, groceries and utilities—you know, life.

Whatever the reason, now you’re wondering, What are the cheapest states to live in? That’s a great question! Let’s take a tour of the 13 lowest cost of living states in the U.S.

How Do We Find the States With the Lowest Cost of Living?

To find the cheapest states to live in, we look at the Cost of Living Index published by the Council for Community and Economic Research (C2ER). In fact, the numbers you see in this article come from that index, unless otherwise noted.

The Cost of Living Index compares expenses like housing, groceries, utilities, transportation, health care, and miscellaneous goods and services in every state. The number 100 represents the national average cost of living. Anything below 100 means a state is cheaper than average. Anything above 100 means a state is more expensive. Make sense?

Now, let’s check out the 13 states with the lowest cost of living in the U.S.

13 Cheapest States to Live In

Here they are, folks:

  • Mississippi
  • Kansas
  • Alabama
  • Oklahoma
  • Tennessee
  • Georgia
  • Iowa
  • Michigan
  • West Virginia
  • Indiana
  • Missouri
  • Arkansas
  • New Mexico

Now that you know which states made the list, let’s explore how each state’s cost of living, income and unemployment rate compare to the U.S. average. We’ll talk a little about each state’s culture too.

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With all this info, hopefully you can get a better picture of which states might be best for you.

Let’s dive in!

1. Mississippi

Mississippi is the cheapest place to live in the United States, with a cost of living 16.7% lower than the national average. It also has the cheapest transportation on our countdown.

Here’s how Mississippi’s housing prices, income and job market compare to the rest of the U.S.:




Median Home Price



Median Monthly Rent*



Median Yearly Income



Unemployment Rate



*Median monthly rents refer to two-bedroom apartments.

Now, 4.5% unemployment was an all-time low for Mississippi in early 2022, but it’s pretty high compared to the national average.5 So make sure you line up a job before you move. (Actually, that’s wise wherever you go.)

Once you arrive in Mississippi, get ready for some fantastic music and food! This state’s known for rock-n-roll, blues, and tasty treats like fried catfish and chocolate pies.

2. Kansas

In Kansas, the cost of living is 13.7% below average. While health care and utilities cost about the same as the average U.S. city, Kansas has really cheap miscellaneous goods and services. You’ll usually pay about 10% less than normal for things like shampoo and movie tickets.

Now, let’s compare housing prices, salaries and unemployment rates in Kansas to the rest of the country:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



With low home prices, low unemployment rates and high salaries, Kansas is one of the best states to live in financially. Some towns even offer incentives to move there, like free land or cash to help pay for housing.10,11 Since Kansas is mostly farmland, you’ll probably live near wheat or sunflower fields.

3. Alabama

Alabama is the third-lowest cost of living state—about 12.1% lower than most of the U.S. The exception? Utility bills run close to the national average.

The cheapest part of Alabama isn’t a single city—it’s a whole county! The cost of living in Calhoun County is 18% under the national average. Even the most expensive city, Birmingham, is still 6% below average.

See how Alabama’s housing prices, incomes and job market stack up to the rest of the U.S.:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Alabama is known for forests, beaches and being NASA’s home base. It’s also one of America’s biggest steel pipe makers, since the soil contains limestone, iron ore, and coal—the main ingredients for steel.

4. Oklahoma

Now let’s head west. Oklahoma ties with Alabama for an average cost of living that’s 12.1% lower than normal. Oklahoma’s cheapest city is Muskogee. Move there, and you can enjoy a cost of living that’s a whopping 21% below average!

So, what kind of money can you expect to earn in Oklahoma? And how much does housing cost? Let’s take a look:  




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Oh, and if you want to make it big in sports, show biz or the rodeo, you may want to make a pit stop in Oklahoma first. Famous Okies include Mickey Mantle, Brad Pitt, Carrie Underwood and Will Rogers. Plus, people in Oklahoma love celebrating their state’s Native American roots and cowboy culture.

5. Tennessee

Tennessee’s cost of living is 11.3% below average. And after Mississippi, it has the second-cheapest transportation on our list.

Nashville is the most expensive city in Tennessee (shocker, we know). But living here still costs 5% less than in the average U.S. city. Want to find someplace cheaper? Head over to Knoxville, where the cost of living is about 20% lower than average.

Next, let’s compare Tennessee’s housing prices, incomes and job market to the rest of the country:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Housing prices are high—and they can feel even higher when yearly salaries are $10,000 lower than the national median. So before you move to Tennessee, find out exactly how much house you can afford.

Once you arrive, you can enjoy everything from the Great Smoky Mountains to boot-scootin’ good music to downhome Memphis barbecue. Yum!

6. Georgia

Tennessee’s southern neighbor, Georgia is another one of the cheapest states to live in. The cost of living in Georgia is 11.2% below the national average . . . in most of the state, anyway.

Atlanta’s cost of living is actually 5% higher than average. Fortunately, the other cities on Georgia’s cost of living index range from 8% to 17% below the average U.S. city.

So, how much does housing cost in Georgia, and how much do most people make? See for yourself:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Georgia has the most expensive housing on our list. But on the bright side, salaries are close to the national median. And Georgia has a lot to offer—like the Appalachian Mountains, sandy beaches along the Atlantic, beautiful architecture, and southern charm.  

7. Iowa

Iowa is another one of the most affordable states, at 10.1% below the average cost of living. Even though you’ll likely pay average prices for groceries and health care, housing in Iowa is pretty darn cheap. Let’s take a look:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



More good news: Iowa has the highest yearly income out of all the cheapest states! So do your budget right, and you could make a pretty good living there.

Plus, Iowa is one of the coolest things since sliced bread. (Actually, the guy who invented sliced bread was from there.) It has state parks, museums, aquariums and random historical sites, like the place where Grant Wood painted American Gothic—you know, the couple holding the pitchfork.

8. Michigan

Michigan’s cost of living is 9.5% below average. On our countdown, this state has the cheapest groceries and cheapest city to live in—Kalamazoo, where the cost of living is 24% below normal.

Michiganders pay above average for utilities and transportation. Car insurance is more expensive there than almost anywhere else in America—so you’ll need a trusted insurance agent to help you get the right coverage at the right price.

Here’s how Michigan’s housing prices and job market compare nationally:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Michigan is known for its auto industry and Great Lakes. It has more miles of coastline than any other state in the continental U.S. And winter sports are a thing—Michiganders love ice fishing, skiing and hockey.

9. West Virginia

West Virginia’s cost of living index looks at one city—Morgantown. The cost of living there is 9.5% below average, and it has the cheapest utilities and lowest median housing prices on our countdown.

If you live on the east side of West Virginia, you’re closer to Washington D.C., so your cost of living will likely go up. On the flip side, the cost of living is likely even cheaper than Morgantown in the mountains of southern and western West Virginia.

Now, let’s see how Morgantown compares to the rest of the U.S.:


West Virginia


Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



*This number comes from 2016–2020 census data, so it’s not as up-to-date as some of the other rents on our list.
Rent in West Virginia has likely gone up since then.

West Virginia has a big mining industry and beautiful outdoor areas. You can hike dozens of trails, climb mountains, and visit places like Harper’s Ferry to learn the local history.

10. Indiana

Indiana’s cost of living is 9.4% less than the U.S. average. In Richmond, that drops to 18% below average. But in Bloomington, residents pay about 2% above average—partly because Bloomington is home to Indiana University, a top 100 school.41

People in Indiana (aka Hoosiers) also pay around average for transportation and utilities. But what about housing? And what’s up with the job market? Take a look:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Indiana has the lowest unemployment rate on our list—and with salaries fairly close to the national median, it’s another of the best states to live in financially.

It’s also surprisingly beautiful. Indiana has everything from sand dunes up north to forests and limestone caves down south. This state also grows lots of popcorn—so bring your movie collection along!

11. Missouri

The cost of living in Missouri is 9.2% lower than the national average. St. Charles County is the state’s most expensive place to live, but it’s still 3% less than most U.S. cities. The cheapest city, Joplin, has a cost of living around 17% below normal.

Here’s what housing prices, salaries and the job market look like in Missouri:




Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



In Missouri—or Miz-ur-uh, as the locals say—there are plenty of small towns where you can put down roots. You can choose from grassy plains, farmland or the Ozark Mountains.

Missouri’s two biggest cities, St. Louis and Kansas City, have cool sights like the Gateway Arch and Women’s Leadership Fountain—but they’re also two of America’s most dangerous cities.50 So you’ll want to look for neighborhoods that are cheap and safe.

12. Arkansas

Next up, Missouri’s neighbor to the south! The cost of living in Arkansas is 9% below average. The one bummer is that miscellaneous goods and services—like clothes or haircuts—cost about 2% more than normal. But Arkansas has the cheapest health care on our countdown at 15% below average. That’s a huge win for your budget!

Now let’s check out housing prices, incomes and the job market in Arkansas compared to the rest of the U.S.:




Median Home Price



Median Monthly Rent*



Median Yearly Income



Unemployment Rate



Arkansas has amazing natural hot springs, caves and forests. And you can live on the plains or in the mountains, just like in Missouri. But unlike Missouri—or anywhere else—you can actually find real diamonds in Arkansas at Crater of Diamonds State Park. 

13. New Mexico

Last but not least, New Mexico! Its cost of living is around 9% lower than average. Here’s what housing prices, the median annual salary and the job market look like:


New Mexico


Median Home Price



Median Monthly Rent



Median Yearly Income



Unemployment Rate



Now, you can see home prices and unemployment are high. In fact, New Mexico has the second-highest unemployment rate in the country—right behind Washington, D.C. So you’ll want to make sure you find the right job before you move.

Despite its job market, New Mexico lives up to its nickname—the Land of Enchantment. Its mountains and deserts are breathtaking, and it’s home to many archaeological sites belonging to the Pueblo people.

Should You Move to a State With a Lower Cost of Living?

Maybe! It depends on your situation—especially since every state has pros and cons.

The truth is, moving only based on the cost of living may not be the best idea. There are other things to consider when deciding where you should move—like whether you can earn a good living in your field or whether you’ll even like the state. 

Distance also matters. A cross-country move costs way more than a cross-state move. If you want the flexibility of being able to move any distance, check out a PODS container. They’ve helped with 6 million moves—both long and short.

That said, it’s important to live somewhere you can actually afford—so you should definitely find out if the cheapest states to live in will fit you and your family. To get started, try our free Cost of Living Calculator and compare your current city to cities in the most affordable states.

Making the Move

Maybe you’ve already made up your mind—you’re sick of sky-high prices and ready to head to greener pastures. Time to move!

The first step is to get a great real estate agent on your side. Endorsed Local Providers (ELPs) are top-performing agents who live and work all over the country—so you can partner with someone who knows your new neighborhood like the back of their hand. We like to call them RamseyTrusted, because we trust them to take care of you.

Find a RamseyTrusted real estate agent today!

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About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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