States With the Lowest Cost of Living

Sometimes the grass looks greener on the other side . . . of the country. Especially when the cost of living in your part of the country is crazy high.

I hear from folks on The Ramsey Show all the time who are sick and tired of paying out the nose for housing, groceries, taxes and utilities (you know, life). And if that’s you, or if you just want a change of scenery, you might be wondering, What are the cheapest states to live in?

That’s why I’ve put together a list of the 14 states with the lowest cost of living. The perfect jumping-off point to help with your future relocation.

Spoiler alert, though: If you wanted to justify moving to an island paradise, Hawaii didn’t make the cut. But if you’re cool with cornfields versus crashing waves, you’re in luck.

The Cheapest States to Live In

Here’s our list of the 14 states with the lowest cost of living. Why 14? Because the other guys just give you a measly top 10. We love you enough to give you 40% more than the other guys. We’re nice like that.

1. Oklahoma
2. Mississippi
3. West Virginia
4. Alabama
5. Kansas
6. Missouri
7. Iowa
8. Arkansas and Tennessee (tied)
9. Indiana
10. North Dakota and Texas (tied)
11.  Kentucky
12. Nebraska

What Is Cost of Living?

Cost of living means exactly what it sounds like—it’s the amount it costs to live somewhere, based on expenses like housing, groceries, utilities, transportation, health care, taxes and miscellaneous goods and services.

To find the states with the lowest cost of living, our team looked at the cost-of-living index published by the Council for Community and Economic Research (C2ER). The numbers you see in this article come from that index unless otherwise noted.

We’ve got 14 states to look at. Let’s dig into how each state’s cost of living, income and unemployment rate compared to the U.S. 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 monthly rent is based on a two-bedroom apartment.}

Oklahoma is great for its impressive landscapes (like the Wichita Mountains), strong sense of community, and thriving music and food scene—which blends Southern, Western and Midwestern influences. Plus, people in Oklahoma love celebrating their state’s Native American roots and cowboy culture.

2. Mississippi

Mississippi’s cost of living, at 14% below the national average, lands it at number two on the list. Tupelo (the birthplace of Elvis) is the cheapest city in the state at 21.1% below the national average.

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

^{*Median monthly rent is based on a two-bedroom apartment.}

While housing is cheap in Mississippi, the state also has the lowest median household income of all the states on the list—almost $25,000 less than the national average.

Once you arrive in Mississippi, get ready for some fantastic music and food. This state’s known for the blues—and for delicacies like fried catfish and chocolate pies.

3. West Virginia

West Virginia‘s cost of living is 12% below average. And cheap housing is a big factor in that number—West Virginia has the lowest median home value of all the states on this list.

If you take some country roads to the place where you belong (thanks, John Denver), you’ll arrive in Charleston, the state capital and largest city. The cost of housing in Charleston is about 40% below average.

Let’s see how West Virginia compares to the rest of the U.S.:

^{*Median monthly rent is based on a two-bedroom apartment.}

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

4. Alabama

Alabama sure would make a sweet home. The cost of living in the Yellowhammer State is 11.9% lower than the rest of the U.S. The cheapest city in Alabama is Anniston, with a cost of living that’s 16.9% below the national average. Even the most expensive city, Auburn, is still 4.1% below average.

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

^{*Median monthly rent is based on a two-bedroom apartment.}

Alabama is known for having a mix of forests and beaches. It’s also one of America’s biggest steelmakers, since the soil contains iron ore and coal—the main ingredients for steel. There’s your fun fact for the day.

5. Kansas

Kansas is right in the middle of the ole U.S. of A. (literally), and its cost of living is 11.6% below the national average (not in the literal middle, but pretty close). Now, let’s compare housing prices, salaries and unemployment rates in Kansas to the rest of the country:

^{*Median monthly rent is based on a two-bedroom apartment.}

Kansas is sometimes called the breadbasket of the U.S. because it grows so much wheat. Unfortunately, gluten and I don’t get along—but if you have a passion for farming (or sourdough starters), consider Kansas.

At 10.2% below the average cost of living, Iowa is another one of the most affordable states. And the capital, Des Moines, is among the cheapest capital cities in the U.S. at 16.8% below average. Wherever you go in the state, you’ll likely find affordable housing (and lots of corn). Let’s take a look:

^{*Median monthly rent is based on a two-bedroom apartment.}

8. Arkansas and Tennessee

Tied for eighth place are Arkansas and Tennessee—two states that each have their own brand of Southern style. Both states are 9.9% below the national average.

Arkansas, the home of Walmart, has amazing natural hot springs, caves and forests. You can live on the plains or in the mountains, and you can find real diamonds in Arkansas at Crater of Diamonds State Park. Plus, the Northwest Arkansas (NWA) region is a growing hotbed for new jobs, tech startups and cutting-edge culture.

^{*Median monthly rent is based on a two-bedroom apartment.}

Over in Tennessee, Nashville is the most expensive city (shocker), but living there still costs 1.5% less than average. Want to find someplace cheaper? Head over to Knoxville, where the cost of living is 14% lower than average. Let’s look at a few other figures and how they compare to the whole country:

^{*Median monthly rent is based on a two-bedroom apartment.}

Once you arrive, you can enjoy the Great Smoky Mountains, country music and legendary Memphis barbecue. And I’d be remiss if I didn’t tell you that Tennessee is also home to us here at Ramsey Solutions—come see us!

9. Indiana

Indiana’s cost of living is 9.3% less than the U.S. average. And little Richmond, Indiana, has a cost of living 19% below average. But what about housing? And what’s up with the job market? Take a look:

^{*Median monthly rent is based on a two-bedroom apartment.}

Beyond the numbers, Indiana has some great selling points. It’s surprisingly beautiful, and it has everything from sand dunes up north to forests and limestone caves in the south. This state also produces lots of popcorn—so bring your movie collection along.

10. North Dakota and Texas

Looks like we’ve got ourselves another tie. North Dakota and Texas might be on opposite sides of the continental U.S., but both are 8.9% below the national average. So whether you want to live the cowboy life where the buffalo roam or among the Texas longhorns, you can save some money.

If you love the outdoors, North Dakota has a lot to offer: the beautiful badlands of Theodore Roosevelt National Park, the weird and wild scrap metal sculptures of the 32-mile Enchanted Highway, animal watching at the most wildlife refuges of any state, and fertile farmlands as far as the eye can see. North Dakota has the lowest unemployment rate on our list. The Peace Garden State is a major player in the oil industry and has seen a boom in population in the last decade because of it.

^{*Median monthly rent is based on a two-bedroom apartment.}

Speaking of booming, Texas has also been gaining both people and industry for years thanks to low taxes and light regulation (getting more businesses with business-friendly policies—who knew?).

As the saying goes, everything is bigger in Texas—and Texans go big when it comes to fun.  The state has 11 pro sports teams (including the Dallas Cowboys, Texas Rangers and San Antonion Spurs), plus seven Six Flags amusement and water parks and lots of historic sites, like the Alamo (there’s no basement, by the way—I’ve checked). Austin, the state capital, keeps things weird with its own crazy mishmash of Texas swagger and urban street culture.

Let’s see how Texas stacks up next to the U.S. for housing, income and unemployment:

^{*Median monthly rent is based on a two-bedroom apartment.}

Unlike our previous tie, it looks like Texas and North Dakota are pretty evenly matched except for the unemployment rate, which in the Lone Star State is the same as the national average.

11. Kentucky

Kentucky is the home of horse racing, fried chicken and bourbon—sometimes enjoyed simultaneously! And its cost of living is also 8.5% below the national average (which would make anyone raise a glass!). Let’s see how the Bluegrass State measures up to the country overall.

^{*Median monthly rent is based on a two-bedroom apartment.}

As I said before, Kentucky is where horse racing is king (it’s literally called the sport of kings . . . see what I did there?). The Kentucky Derby takes place every year at the historic Churchill Downs racetrack. But if watching a bunch of horses running around isn't your thing, you've got lots of other options—like exploring the longest cave system in the world at Mammoth Cave National Park, listening to live bluegrass music, or watching some University of Kentucky basketball.

12. Nebraska

Nebraska’s cost of living is 8.2% below the national average—not too shabby. Those vast fields of corn and cows (Nebraska is a big corn and beef producer) could lead you to a great life. Let’s see how the numbers add up:

^{*Median monthly rent is based on a two-bedroom apartment.}

By the way, there’s more to Nebraska than just cornfields (though there are a lot of those—it’s the Cornhusker State, folks). Think the College World Series, Chimney Rock (hello, Oregon Trail fans), small towns and communities, and plenty of wide-open spaces to breathe. If you’re looking for that laid-back Midwest life, Nebraska might just be calling your name.

The first step is to get a great real estate agent on your side, and that’s where our RamseyTrusted^® agents come into play. They’re top-performing agents who live and work near you—or where you want to move. Wherever you’re looking to move, they’ll take care of you.