The surge in inflation over the past year prompted numerous Americans to contemplate relocating to states with more affordable living expenses. June 2022 witnessed a spike in the annual inflation rate, soaring to 9.1%, marking its zenith since the 1980s. In a bid to counter the rampant inflation, the US Federal Reserve swiftly escalated the benchmark interest rates by 450 basis points (bps) from March 2022 onwards. Initially resting between 0% to 0.25% in March of the previous year, the benchmark interest rates now fluctuate within the 4.5% to 4.75% bracket. Analysts at Goldman Sachs and Bank of America anticipate the Federal Reserve's intent to further hike the interest rates, aiming for a range of 5.25% to 5.5% by 2023. This prospective move entails augmenting the benchmark interest rates by 25 bps thrice within this year.
While inflation is showing signs of abating, the CPI report for June displayed a decline, marking the lowest annual rate in over two years. Nonetheless, prices persist stubbornly high across various regions in the country, causing considerable strain on consumers. Certain states bear the brunt of exorbitant living costs, yet others provide a haven from this financial equation.
Mississippi is the cheapest state in the US, boasting a cost of living index of 85, rendering it the most affordable option.
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List of 10 Cheapest States to Live in the US
As per data provided by the U.S. Bureau of Labor Statistics (BLS), the typical American household allocates approximately $5,111 per month to cover living expenses, totalling an annual expenditure of around $61,334. Exploring budget-friendly travel options, several states stand out as economically advantageous destinations. Among the most affordable states to visit are Indiana, West Virginia, Georgia, Iowa, Tennessee, Kansas, South Carolina, Oklahoma, Texas, and Mississippi. Each of these states presents distinctive and cost-effective attractions, making them appealing choices for budget-conscious travellers.
Here is a list of the 10 most economical states to reside in the United States:
1. Mississippi – 83.3
2. Kansas– 86.5
3. Alabama– 87.9
4. Oklahoma– 87.9
5. Georgia – 88.8
6. Tennessee – 89.0
7. Missouri – 89.8
8. Iowa – 89.9
9. West Virginia – 90.5
10. Indiana – 90.6
When assessing the average living costs across diverse states or, in some instances, different cities, this figure is juxtaposed against the national average. For instance, Hawaii holds the distinction of having the highest cost of living, registering a score of 193.3 on the index. This implies that the cost of living in Hawaii is 93.3% higher than the national average. Conversely, if a state scores below 100 on the index, it is deemed to possess a more affordable cost of living than the national average. This compilation draws upon information from Wisevoter and Forbes reports.
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Most Economical States to Live In the US
1. Mississippi
Emerging as the most economical state, Mississippi boasts a cost of living index score of 86. It touts the lowest average housing costs in the country, standing at 33.7% below the national average, with a median single-family home priced around $140,818. However, it's crucial to note that Mississippi also grapples with the highest poverty rate in the nation, affecting 19.5% of its population. Challenges in the economy, education system, and overall quality of life contribute to its placement among the least desirable states to live in.
2. Kansas
With a score of 86.9, Kansas secures the second spot as one of the most affordable states to live in. Housing remains particularly economical, ranking third lowest in the nation, with a median single-family home priced at approximately $176,898. The state boasts a commendable low unemployment rate, a positive indicator of its economic stability.
3. Alabama
Ranked third in terms of overall cost of living with an index score of 87.2, Alabama presents a median home price of $170,184, the second lowest after Mississippi. Transportation and healthcare costs also rank among the lowest nationwide, although the state contends with a significant percentage of its population living below the poverty line. Nonetheless, a low unemployment rate of 2.9% signals favourable economic prospects.
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4. Oklahoma
Occupying the fourth spot with an overall score of 87.9, Oklahoma offers affordability across various categories, including healthcare, groceries, and housing. The median home cost in Oklahoma stands at $151,469, while the state faces a poverty rate of 15.1%, akin to Mississippi's challenges in healthcare and education.
5. Georgia
Georgia secures the fifth position with an overall score of 88.8, owing to considerably lower housing, transportation, and utility costs than the national average. The median cost for a single-family home in Georgia stands at $246,272, with the state often praised for its appeal due to Atlanta's prominence as a business hub.
6. Tennessee
Joining the ranks as the sixth most affordable state, Tennessee scores 89.0 on the cost of living index. Housing prices in the state slightly trail behind its southern neighbour, with a median home price of $230,253. Although facing a relatively high poverty rate of 13.8%, Tennessee attracts residents with its absence of state income tax on earned wages and its rich musical heritage.
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7. Missouri
Positioned as the seventh most economical state with an index score of 89.8, Missouri offers a median single-family home cost of $194,226. The state presents a favourable compromise between Southern and Midwestern living, coupled with a minimum wage of $11.15 and diverse job opportunities.
8. Iowa
Bringing in a touch of Midwestern charm, Iowa clinches the eighth spot as one of the cheapest states to live in, scoring 89.9 on the index. With housing costs significantly below the national average at $167,036 for a single-family home, Iowa boasts a poverty rate lower than the national average, emphasizing its strong economy and education system.
9. West Virginia
Securing ninth place with a 90.5 on the cost of living index, West Virginia stands out for its affordability in home prices, averaging $117,639 for a single-family home. Despite this advantage, concerns about economic growth and the education system have often placed it alongside Mississippi among the less desirable states to live in.
10. Indiana
Rounding out the top ten is Indiana, scoring 90.6 on the index. The state offers housing costs notably below the national average, with the average single-family home priced at $185,805. Indiana features a low unemployment rate of 2.2%, although its overall appeal as a place to live falls in the middle of the spectrum.
Indeed, while the prospect of relocating to one of the most economic states in the nation appears financially savvy, it's crucial to meticulously weigh numerous factors before making such a significant move. Begin by comprehensively assessing the prevailing average wages and employment opportunities within your intended destination. Understanding the job market and income potential is essential to ensure financial stability and security upon relocation. Research thoroughly to gauge whether the employment landscape aligns with your professional aspirations and financial expectations.
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