If you are on a budget or trying to save, changing where you live can be a huge factor in your ability to spend less and save more. Throughout the United States, there are different areas that are much more affordable to live in than others. A lot of this has to do with the cost of living. For example, if you live in California, your cost of living is going to be much higher than if you live in a state like Indiana. This is because of several factors including housing, desirability, accessibility, and much more.
Living in a big city like New York or Los Angeles can be a wonderful experience, but it is also not worth filing for bankruptcy years down the line because you were living above your means. If you are looking to move to a city that has a low cost of living in order to live efficiently on a budget, there are lots of options.
What Is the Cost of Living?
In simple terms, the cost of living is the amount of money it takes to cover basic living expenses in a certain place. These expenses usually include housing, groceries, healthcare, and transportation but can include other factors. To get the cost of living these things are added up to find the average cost of living for an area, then it can be compared to that of other places so people can make informed decisions about where they want to live. However, where you want to live and where you can afford to live sometimes do not line up.
The cost of living is a very helpful tool for determining where you can afford to live. There are other factors that contribute to whether or not you could actually move there and live comfortably. One of the most important is the average salary in that area. More often than not, areas that have a low cost of living also do not have very high salaries. Many less expensive states are this way because they have higher rates of poverty and unemployment.
Additionally, housing availability is an important factor in deciding whether or not you should make the move somewhere else. You’ll want to look at what housing is available to buy or rent in the area, and factor the prices into your monthly budget. One quick way to research this is to compare what $150,000 and $300,000 will buy you in one place versus another. In some states, you can get a single-family home for the same price as a studio apartment in a big city.
However, there is a reason that a big city apartment costs the same as a midwestern country home, and it is the real estate golden ticket: location. Location plays a huge role in the cost of living in an area because of supply and demand. People tend to want to live in big cities because of the atmosphere and accessibility, but also because jobs are easier to find where there are a lot of people and businesses. That home in the midwest may be a fraction of what you would pay in New York City, but you are going to be further away from stores, friends, work, and more.
Top 5 Cheapest States to Live in for 2022
Here are the top five cheapest states to live in in the United States.
Mississippi is the cheapest state to live in within the United States with a cost of living index of 83.3. This southern state has the lowest average housing cost at 33.7 percent lower than the national average as well as the lowest average transportation costs in the country. However, Mississippi also has the highest poverty rate in the country and poor quality of education and healthcare systems.
The next cheapest state to live in is Kansas, with a cost of living index of 86.5. The housing in Kansas is 27.4 percent lower than the national average, and they have a low unemployment rate. However, Kansas has frequent tornadoes and extreme droughts, so buying a home here comes at somewhat of a risk.
Alabama is a great state for people on a budget, with a cost of living index of 87.9. Their housing cost is 29.9% lower than the national average, and they have low transportation and healthcare costs. Alabama is close to the coast and has great weather, but they have a below-average quality healthcare system.
Coming in at the fourth cheapest state to live in we have Oklahoma. Oklahoma’s cost of living index is tied with Alabama’s at 87.9, and its healthcare and grocery costs are 5.5 percent below the national average. Unfortunately like Kansas, Oklahoma experiences frequent tornadoes. They also have a struggling education system and dispute the healthcare system being cheaper, it is of lesser quality than in other states.
Finally, Georgia is the fifth most affordable state to live in, with a cost of living index that is not much higher than Alabama and Oklahoma at 88.8. The housing cost in Georgia is 25.6 percent below the national average and their utility costs are 9.5 percent lower than the rest of the country. Georgia is also commonly known as a fun state to live in, with close proximity to diverse urban centers like Savannah and Atlanta.
Jenn Walker is a freelance writer, blogger, dog-enthusiast, and avid beach goer operating out of Southern New Jersey.