Cost of living comparison by state

How much you spend on major expenses such as housing, groceries and insurance all impact your cost of living – and prices for goods and services can vary widely by location.

That means a state’s cost of living can make the difference between being financially comfortable or living paycheck to paycheck.

To compare the cost of living in different states, Insure.com ranked each of the 50 states and Washington, D.C. using data from the Center for Regional Competitiveness, a management organization that oversees the Council for Community and Economic Research. 

The data track regional differences in the cost of consumer goods and services, allowing Insure.com to evaluate factors such as:

• Housing
• Groceries
• Transportation
• Utilities
• Home and auto insurance
• The cost of home and auto insurance
• Health care

Our base cost of living is represented by a reading of 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.

The average household spends $61,334 a year on expenses, according to the most recent numbers from World Population Review. More than one-third of that amount — 34.9% — goes toward housing and related costs.

Based on our cost-of-living assessment, Hawaii is the most expensive state at 181.85 while Oklahoma is the least expensive at 88.76.

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.

What is cost of living? 

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
• Health care
• Home and auto insurance
• Transportation 
• Other goods and services

Cost of living can tell you how expensive it is to live in one area versus another.

Average cost of living by state

Hawaii has a cost-of-living index of 181.85, making it 82% more expensive than the national average.

Here is the cost of living index for all 50 states in the U.S. plus Washington, D.C.

Oklahoma ranks lowest, with an index value of 88.76. That is a 11% savings over the national average.

States such as California and Hawaii have much higher costs of living than places like Iowa and Oklahoma. 

The cost of living varies within each state, too. Rural areas usually have a lower cost of living than suburban and urban areas. Even one metro area within a state can have a very different cost of living than another metro in the same state.

For example, Houston, Dallas, El Paso, San Antonio, Austin, Amarillo, and Beaumont are all proudly Texan. However, the cost of living in each varies.

The more congested Northeast isn’t immune to the substantial cost of living variations, 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 such as Albany, Rochester, Utica and Buffalo.

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

Cost of living comparison calculator

Whether you’re moving to start a job or relocating in retirement, Insure.com’s cost of living calculator can help you evaluate how much it will cost you to live in your new destination.

For instance, compare costs related to major budget categories such as:

• Housing
• Groceries
• Utilities
• Health care
• Other goods and services
• Home and auto insurance

You can also compare any two factors side-by-side.

Our cost of living calculator provides information about 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 that can help you decide whether moving to that area is worth it.

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How we gather cost of living information for you

In compiling our list of the places with the highest cost of living, we looked at the average price of goods in more than 250 metro areas for the first three quarters of 2024.

This included average prices for 254 urban areas where data was available for at least two pricing periods. In a separate section, it included data for 276 urban areas where data was available for at least one pricing period. 

When urban areas had less than three pricing periods, we estimated prices so that we could have a complete set of observations. That means the annual average index includes actual and estimated prices. 

We took the average annual price for each item and calculated the index based on the most recent Consumer Expenditure Survey weights from the U.S. Bureau of Labor Statistics. 

Cheapest states to live in 

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

Most expensive states to live in 

As far as the most expensive states 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:

Why cost of living matters 

A state’s cost of living significantly impacts your ability to save money and build wealth. If you live in an area with a high cost of living and don’t have a strong 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 might 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 fact.

Your expenses and salary will likely be lower if you live in places like Kalamazoo, Michigan, or Charleston, West Virginia. 

What is a cost of living adjustment (COLA)? 

An annual In order to ensure that retiree incomes keep up with inflation, an annual cost of living adjustment (COLA) is typically applied to both Social Security and Supplemental Security Income (SSI) benefits to ensure that retiree incomes keep up with inflation.

The first COLA occurred in 1975. 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 U.S. Bureau of Labor Statistics.

Social Security and SSI benefits have increased by 3.2% in 2024.

How to use the cost of living comparison calculator 

To use the cost of living comparison tool, take the ZIP code of where you now live and the ZIP code of the place you are considering moving and type those numbers into the tool. Also, type in your current income. Then, hit the “Re-Calculate” button. 

The calculator will instantly compare the two locations based on: 

• Cost of living
• Auto insurance cost
• Home insurance cost

You will also get comparisons for other expenses, such as housing, groceries, utilities, transportation, health care, and miscellaneous goods and services.

How the cost of living impacts your home and auto insurance rates

Many factors influence how much you pay for insurance. For instance, living in an area prone to natural disasters typically leads to higher homeowners insurance premiums. Similarly, owning a high-value car that’s costly to repair or replace can increase your auto insurance costs.

The cost of living in your area also plays a role. In some cases, a higher cost of living can actually lower your insurance rates. That’s because more expensive homes are often located in safer neighborhoods with lower crime rates, reducing the risk of theft or burglary—and potentially lowering both home and auto insurance premiums.

However, that’s not always the case. Some costly properties, like waterfront homes, are more exposed to risks such as hurricane damage. In those situations, the higher risk can lead to higher insurance rates.

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 the cost of living, from most to least important:

• Miscellaneous goods and services (29%)
• Housing (28%)
• Groceries (16%)
• Transportation (9%)
• Utilities (9%)
• Health care (5%)
• 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.

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