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You might have picked where to live based on the job market or school district — or even the weather. But what about the local cost of living?

How much you spend on major expenses like housing, groceries, and insurance all affect your cost of living – and prices for goods and services can vary widely by location. And that means a state’s cost of living can be the difference between being financially comfortable or struggling to keep your head above water.

To compare the cost of living across the states, Insure.com ranked each using the Cost of Living Index published for the first quarter of 2022 by the Council for Community and Economic Research. We used the index, which tracks regional differences in the cost of consumer goods and services, to evaluate several factors such as housing, groceries, transportation, utilities, and health care. We also included the cost of auto and home insurance. Items were weighted by Insure.com by what we deemed most necessary.

Our base cost of living is represented by 100; in this case, 100 represents the national average. Locations are then indexed against this number. For example, a state with a cost of living of 110 would be 10% higher than the national average.

Based on our cost-of-living assessment, Hawaii is the most expensive state at 188.29 while Mississippi is the least expensive at 83.89.

So, if you are considering moving, or simply want to know how your state stacks up, read on for more information about the cost of living by state.

Key Takeways

  • Cost of living refers to the amount of money you need to cover basic living expenses in a certain location.
  • Reviewing the cost of living index can help you determine how expensive it is to live in one area or another and may impact your location decision.
  • Mississippi has the lowest cost of living while Hawaii has the highest cost of living.
  • Our cost of living calculator can help you evaluate how much it’ll cost you to live in your new potential destination.

What is cost of living?

cost of living by state

Cost of living refers to the amount of money you need to cover basic living expenses in a certain location. That can include the average cost of rent/mortgage payments, utilities, food and groceries, healthcare, insurance, transportation and other goods and services.

Cost of living can tell you how expensive it is to live in one area versus another. Usually, a cost of living index is used to compare this information.

Average cost of living by state

Curious how the different states compare when it comes to cost of living? Check out our graph below.

State Average cost of living index Compared to national average
Hawaii188.29%88.29%
Washington D.C.156.87%56.87%
New York148.30%48.30%
California146.12%46.12%
Alaska126.07%26.07%
Maryland125.24%25.24%
Oregon124.02%24.02%
Massachusetts121.61%21.61%
New Hampshire119.91%19.91%
Washington119.11%19.11%
Virginia118.56%18.56%
Connecticut114.97%14.97%
Vermont114.53%14.53%
Maine112.86%12.86%
Rhode Island111.84%11.84%
New Jersey110.49%10.49%
Florida108.33%8.33%
Colorado107.43%7.43%
Delaware105.55%5.55%
Arizona104.31%4.31%
Utah103.52%3.52%
Idaho102.37%2.37%
Nevada102.18%2.18%
Pennsylvania100.28%0.28%
Montana99.88%-0.11%
West Virginia99.25%-0.74%
Louisiana98.93%-1.06%
Minnesota98.18%-1.81%
North Dakota97.61%-2.38%
Michigan97.35%-2.64%
Wisconsin96.81%-3.18%
Texas94.98%-5.01%
Kentucky94.25%-5.74%
Georgia94.08%-5.91%
North Carolina93.56%-6.43%
New Mexico93.44%-6.55%
Wyoming93.37%-6.62%
South Dakota93.16%-6.83%
South Carolina92.82%-7.17%
Missouri92.52%-7.47%
Illinois92.21%-7.78%
Nebraska91.60%-8.39%
Tennessee91.42%-8.57%
Ohio90.47%-9.52%
Indiana89.97%-10.02%
Arkansas89.70%-10.29%
Kansas89.60%-10.39%
Alabama89.59%-10.40%
Oklahoma89.39%-10.60%
Iowa88.96%-11.03%
Mississippi83.89%-16.10%

Hawaii has a cost-of-living index of 188.29, indicating that it is 88.29% more expensive to live there than the national average. Mississippi ranks lowest on the index with an index value of 83.89, suggesting a 16.1% savings over the national average when compared to its productivity levels and standard of living.

A state like California or Hawaii has much higher rates than areas like Utah and Idaho. However, the cost of living varies by region within a state, too. Rural areas usually have a lower cost of living than suburban and urban areas. Even metro areas within the same state vary.

One example is Texas. Cities like Houston, Dallas, El Paso, San Antonio, Austin, Amarillo, and Beaumont are all proudly Texan, but the cost to live in each varies.

The more congested Northeast isn’t immune to the substantial cost of living shifts either.

New York has the New York City area, Long Island and Westchester County, which all have high costs. However, The Empire State also includes more affordable areas like Albany, Rochester, Utica and Buffalo.

So, don’t write off an entire state if it has an overall high cost of living. Instead, dig deeper into the numbers to gauge specific regional costs.

Cheapest states to live in

According to our data, the Midwest and Southern U.S. are the cheapest states to live in. Here are the 10 states with the lowest cost of living and how they compare to the national average:

  • Mississippi (-16.10%)
  • Iowa (-11.03%)
  • Oklahoma (-10.60%)
  • Alabama (-10.40%)
  • Kansas (-10.39%)
  • Arkansas (-10.29%)
  • Indiana (-10.02)
  • Ohio (-9.52%)
  • Tennessee (-8.57%)
  • Nebraska (-8.39%)

StateAverage cost of living indexCompared to national average
Mississippi83.89%-16.10%
Iowa88.96%-11.03%
Oklahoma89.39%-10.60%
Alabama89.59%-10.40%
Kansas89.60%-10.39%
Arkansas89.70%-10.29%
Indiana89.97%-10.02%
Ohio90.47%-9.52%
Tennessee91.42%-8.57%
Nebraska91.60%-8.39%

Most expensive states to live in the U.S.

As far as the most expensive states (we also include Washington, D.C.) to live in, they tend to fall along the two coasts. Here are the 10 most expensive states to live in and how their cost of living compares to the national average:

  • Hawaii (+88.29%)
  • District of Columbia (+56.87%)
  • New York (+48.30%)
  • California (+46.12%)
  • Alaska (+26.07%)
  • Maryland (+25.24%)
  • Oregon (+24.02%)
  • Massachusetts (+21.61%)
  • New Hampshire (+19.91%)
  • Washington (+19.11%)

StateAverage cost of living indexCompared to national average
Hawaii188.29%88.29%
Washington D.C.156.87%56.87%
New York148.30%48.30%
California146.12%46.12%
Alaska126.07%26.07%
Maryland125.24%25.24%
Oregon124.02%24.02%
Massachusetts121.61%21.61%
New Hampshire119.91%19.91%
Washington119.11%19.11%

Why cost of living matters

A state’s cost of living has a major impact on your ability to save money and build your wealth. If you live in an area with a high cost of living and don’t have the income to support it, you could end up living paycheck to paycheck.

On the other hand, a lower cost of living means expenses are relatively low, so you may have more room in your budget to save, invest, or spend on items you need – or want.

However, keep in mind that wages often mirror the cost of living. If you live in an expensive area such as San Francisco or Washington, D.C., your salary will likely be higher to account for that.

If you live in Kalamazoo, Michigan, or Jackson, Mississippi, your expenses will be much lower – but so might your salary.

What is a cost of living adjustment (COLA)?

When looking at the cost of living, many people often wonder about a term they often hear: cost of living adjustment. In order to account for inflation and ensure that Americans who rely on certain government benefits can afford to live, a cost of living adjustment (COLA) is sometimes made to Social Security and Supplemental Security Income (SSI).

Established in 1972, the adjustment is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by the Bureau of Labor Statistics.

The COLA for 2022 was 5.9%.

Cost of living calculator

Whether you’re moving for a job or relocating in retirement, our cost of living calculator can help you evaluate how much it’ll cost you to live in your new destination.

For instance, compare costs related to major budget categories like housing, groceries, utilities, transportation, health care, other goods and services and home and auto insurance. You can compare any two factors side-by-side.

Our cost of living calculator also provides the salary you’ll need to maintain your current standard of living. Knowing what you’ll need to earn to maintain your lifestyle gives you critical information to see if moving to that area is worth it.

Cost of living index comparison tool

Please enter valid city/zip
Please enter valid city/zip
$
Please enter salary Value must be less than 10 digit
x
New York, NY Boise, ID
$22,325
Cost of living in Boise, ID, after-tax
Cost of Living
55.35% lower
in Boise, ID, than New York, NY
66% lower
in Boise, ID, than New York, NY
54% lower
in Boise, ID, than New York, NY

Compare cost of living: Boise, ID, vs New York, NY

Cost in
Boise, ID
------- vs -------
Cost in
New York, NY
Housing
-74%
Groceries
-33%
Utilities
-21%
Transportation
-5%
Healthcare
-5%
Misc. Goods & Services
-20%
Auto Insurance
  • New York, NY: $5,199
  • Boise, ID: $1,775
  • % Change: 66% lower
Home Insurance
  • New York, NY: $3,063
  • Boise, ID:
    $1,414
  • % Change: 54% lower
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How to use cost of living comparison calculator

To use the tool, enter the Zip code to get the most accurate result. Cities can have multiple Zip codes, so by entering the city name, you'll get the average for all Zip codes in that city. We may not have cost-of-living data for some non-metropolitan areas. In those cases, we provide the cost-of-living information for the nearest Zip code with available information.
  • The cost of living index lets you compare one area’s costs with another.
  • Enter where you live and the information about another community. Provide your income and calculate the cost of living.
  • Our tool shows what you’ll need to earn to maintain the same standard of living. The tool also highlights the cost differences for each category: housing, groceries, utilities, transportation, health care, auto insurance, and home insurance.
  • The cost of living tool additionally includes how much you’d save on home and auto insurance.
  • Enter your information below and compare the cost of living between two places.

Methodology

A cost of living index evaluates several factors, which are weighted in terms of importance. Below are the eight main expense categories we used to gauge cost of living, from most to least important:

  • Miscellaneous goods and services (30%)
  • Housing (29%)
  • Groceries (13%)
  • Transportation (9%)
  • Utilities (9%)
  • Health care (4%)
  • Auto insurance (2%)
  • Home insurance (2%)

We then ranked the states by those results. The base cost of living is always represented by 100; in this case, 100 represents the national average. Locations are then indexed against this number. For example, a state with a 110 on the cost of living index would be 10% higher than the national average.

Frequently asked questions

What is the cheapest state to live in?

Mississippi is the cheapest state in terms of cost of living. Mississippi costs are lower than the state average in every category except for home insurance costs. Home insurers base rates on risk. Weather-related claims, such as hurricanes, fires and break-ins lead to higher costs.

What is the best state to live in financially?

Just because it’s cheap to live in a certain state doesn’t necessarily mean it’s the best place to live for your finances. You’ll also want to consider factors like the unemployment rate, average wages, tax rates, and more.

That means states with more expensive costs of living could still be financially comfortable if there’s a strong job market, high salaries, low taxes, etc. And these factors can shift over time, meaning the best state to live in financially isn’t always the same.

If you’re thinking about moving for financial reasons, you can use the cost of living calculator to see how different states will impact your bottom line. Then do some research to find out the health of the local economy.

How much has the cost of living increased?

The cost of living has increased at its fastest pace in decades. As of June 2022, the Consumer Price Index increased 9.1% from a year ago. Prices for gasoline (59.9%), new cars (11.4%) and food (10.4%) were some of the biggest contributors.

author image
Casey Bond
Contributing Researcher

 
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Casey Bond is a seasoned writer and editor who has covered personal finance for more than a decade. Previously, she reported on money, home and living for HuffPost. She has held editorial management roles at Student Loan Hero and GOBankingRates. Her work has appeared in Forbes, Money.com, Yahoo! Finance, U.S. News & World Report, and more. In 2019, she won a NEFE Excellence in Personal Finance Reporting Award. She is also a Certified Personal Finance Counselor.

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