Cost of living by state

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Your cost of living is determined by everyday expenses like housing, groceries, transportation, and insurance, and those costs can vary dramatically depending on where you live. Even with the same income, moving to a higher- or lower-cost area can significantly impact your budget, savings, and overall financial comfort.

From expensive states like Hawaii and California to more affordable options like Mississippi and Oklahoma, understanding these differences can help you make smarter decisions about where to live and how far your money will go.

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. It reflects how expensive it is to live in one area compared to another and plays a key role in determining your overall financial comfort.

That can include the average cost of:

• Rent or mortgage payments
• Utilities
• Food and groceries
• Health care
• Home and auto insurance
• Transportation
• Other goods and services

These costs can vary significantly by state, city, and even neighborhood, which is why the same income may go much further in some places than others.

What is the cost of living index?

The cost of living index measures how expensive a location is compared to the national average, which is set at 100. A score above 100 means an area is more expensive than average, while a score below 100 means it’s more affordable. For example, Hawaii’s index of 165 makes it about 65% pricier than the national average, while Oklahoma’s 87.5 makes it roughly 13% cheaper.

A married couple with children spends about $105,684 per year on living expenses, with housing and other essentials taking the largest share.

What is the average cost of living in each state?

The average cost of living varies by more than 80 percentage points across U.S. states. Hawaii is the most expensive state, with a cost-of-living index of 65% higher than the national average. Mississippi is the most affordable at 14% below the national average.

The five most expensive states (and D.C.) to live in are:

1. Hawaii — 65% above average
2. Massachusetts — 49% above average
3. California — 40% above average
4. Washington, D.C. — 38% above average
5. Alaska — 26% above average

The five most affordable states are:

1. Mississippi — 14% below average
2. Kansas — 13% below average
3. Oklahoma — 13% below average
4. Alabama — 12% below average
5. Nebraska — 10% below average

The full state-by-state breakdown is below.

What are the top 10 cheapest states to live in?

Mississippi is the cheapest state to live in, with a cost-of-living index that is 14% below the national average. Kansas and Oklahoma tie for second, both roughly 13% cheaper than average, followed by Alabama and Nebraska.

Living costs vary widely across the U.S., but the most affordable states tend to have lower housing prices, taxes, and everyday expenses. 

The 10 most affordable states to live in are:

What are the 10 most expensive states to live in? 

Hawaii is the most expensive state to live in, with a cost-of-living index that is 65% higher than the national average. Massachusetts ranks second at 49% above average, followed by California, Washington, D.C., and Alaska.

Some states come with a much higher price tag, largely driven by expensive housing, higher taxes, and increased everyday costs. 

The 10 most expensive states (and D.C.) to live in are:

What factors make up the cost of living?

The cost of living is made up of key everyday expenses like housing, groceries, healthcare, utilities, and transportation, which together determine how expensive it is to live in a specific area. Housing typically has the biggest impact, but all categories contribute to overall costs.

The main factors include:

• Housing: Rent or mortgage payments, property taxes, and availability
• Groceries: Food and everyday household items
• Healthcare: Insurance premiums, doctor visits, and medical services
• Utilities: Electricity, water, internet, and heating
• Transportation: Gas, public transit, car payments, and maintenance
• Miscellaneous expenses: Services, entertainment, and other daily costs

To compare costs across states, each category is measured against a national average of 100. Scores above 100 indicate higher-than-average costs, while scores below 100 indicate more affordable living.

How do everyday costs vary from state to state?

Everyday costs like housing, groceries, healthcare, and utilities vary widely by state — and housing is by far the biggest swing factor. In California, the average household spends $5,189 a month on housing, more than 2.5 times what the average Texas household pays. Groceries, healthcare, and utilities show smaller gaps, typically varying by 10% to 30% between states.

Here’s a quick look at how these costs compare across some of the most populous states:

Reading between the rows

• Housing drives the biggest differences. The gap between the highest and lowest housing costs ($3,197) is larger than the combined gap across all three other categories.
• Grocery costs stay within a tighter range. The difference between the most and least expensive state on this list is just $240 per month.
• Healthcare is relatively consistent. Monthly healthcare costs vary by only about $70 across these five states.
• Utility costs track with climate. California’s higher utility bills reflect elevated electricity rates, while milder-climate states like Florida and Texas spend less despite heavy air-conditioning use.

Your personal costs will depend on your housing situation, household size, and lifestyle — but the data shows that housing is where state-to-state decisions make the biggest financial impact.

How do you compare the cost of living between cities?

To compare the cost of living between two cities, follow these five steps:

1. List your major monthly expenses. Focus on the big four: housing, groceries, utilities, and transportation. These categories account for the majority of most household budgets and show the biggest swings between cities.
2. Look up local price data for each city. Use public sources like the Bureau of Labor Statistics, the Council for Community and Economic Research (C2ER), or cost-of-living calculators that pull from ZIP-code-level data.
3. Factor in state and local taxes. Income tax, sales tax, and property tax rates vary widely and can significantly affect your take-home pay and overall budget.
4. Compare costs relative to your income. A higher salary in a more expensive city doesn’t always mean more buying power. Divide your salary by each city’s cost-of-living index to see where your money actually goes further.
5. Account for lifestyle differences. Commute length, childcare, healthcare access, and entertainment costs can all shift your real monthly spending.

The fastest way to run this comparison is with a cost of living calculator. Enter your current ZIP code, your target ZIP code, and your salary, and the tool will show a side-by-side breakdown of housing, insurance, taxes, and everyday expenses — so you can quickly see whether a move makes financial sense before committing to it

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New York, NY Idaho, ID

$39,500

Cost of living in Idaho, ID, after-tax

Cost of Living

21% lower

in Idaho, ID, than New York, NY

Auto Insurance

26% lower

in Idaho, ID, than New York, NY

Home Insurance

8% higher

in Idaho, ID, than New York, NY

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

Cost in
Idaho, ID

------- vs -------

Cost in
New York, NY

Housing

-42%

Groceries

-4%

Utilities

-30%

Transportation

-1%

Healthcare

-4%

Misc. Goods & Services

-4%

Auto Insurance

-26%

Home Insurance

+8%

Auto Insurance

• New York, NY: $1,941
• Idaho, ID: $1,428
• % Change: 26% lower

Find Insurance Cost in Idaho, ID

Home Insurance

• New York, NY: $1,817
• Idaho, ID:
  $1,961
• % Change: 8% higher

Find Insurance Cost in Idaho, ID

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L O A D I N G

Why does cost of living matter?

A state’s cost of living plays a big role in how much you can save and grow your wealth. In high-cost areas, a modest income can leave little room for savings or financial growth after covering everyday expenses.

On the other hand, living in a lower-cost area can free up more of your budget. With essentials taking a smaller bite out of your income, you may have more flexibility to save, invest, or spend on things that improve your quality of life.

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 cost of living adjustment (COLA)  helps Social Security and Supplemental Security Income (SSI) benefits keep pace with rising prices, protecting retirees’ and beneficiaries’ purchasing power. The adjustment is tied to inflation and 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.

The first COLA was introduced in 1975 to prevent fixed benefits from losing value over time as the cost of essentials, like food, housing, and healthcare, climbed. For 2026, Social Security and SSI benefits rose by 2.8%, reflecting the inflation experienced the previous year.

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

Your location plays a major role in how much you pay for home and auto insurance, as areas with higher risks or higher property values typically have higher premiums. Factors like natural disasters, repair costs, and local crime rates all influence how insurers price coverage.

Here’s how cost of living affects insurance rates:

• Higher risk areas: Locations prone to hurricanes, wildfires, or floods often have higher home insurance premiums
• Property values: More expensive homes cost more to repair or rebuild, increasing coverage costs
• Vehicle costs: High-value or expensive-to-repair cars can lead to higher auto insurance rates
• Local crime rates: Areas with lower crime may see lower premiums due to reduced risk of theft or damage

At the same time, higher-cost areas do not always mean higher insurance rates. Some expensive neighborhoods have lower crime rates, which can reduce risk, while high-value homes in risky locations can still face significantly higher premiums.

Methodology 

Our 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.

How we measure cost of living

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 2025.

This included average prices for 257 urban areas where data was available for at least two pricing periods. In a separate section, it included data for 283 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. 

Chris Kissell

Contributing Researcher

 

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Specializing in insurance and personal finance, Chris Kissell is a writer and editor whose work has been featured at Forbes, U.S. News & World Report, MSN Money, Fox Business, Yahoo Finance, Bankrate and Money Talks News. He is based in Denver.

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