Skip to Content

What Is The Cheapest US State To Live In?

Some states are cheaper to live in than others. But just which state will get you the most for your money? In this post, we’ll compare some of the major living costs and take a look at which state is the cheapest in each case. You may even be tempted to relocate to another state afterwards when you see how much you could be saving!

Rent/home ownership

Rent/mortgage is without a doubt the biggest living cost for many of us. Most experts recommend that you don’t spend more than 35% of your annual income on this expense, however few of us actually stick to this. In fact, many of us end up spending nearly 50% of our income on rent or mortgage payments. 

The average renter in the US pays $1,249 per month. The average home price is meanwhile $348,079 as of 2022, with the average homeowner paying $1,100 in monthly mortgage payments.

In which state, can you find the cheapest property prices? West Virginia is currently the cheapest. The median home value on Zillow is currently $130,625 – more than $200,000 below the national average. This is also the cheapest state for renters, with tenants paying an average of $800 per month (almost 36% less than the national average). Runners up when it comes to cheap rent include Indiana, Iowa and Arkansas. 

California is meanwhile the most expensive state to rent, with the monthly average rent costing $1,901 – almost 58% more than the average rent in West Virginia. It isn’t the most expensive state to buy in though, as Hawaii tends to be marginally more expensive (although California home prices are still much higher than the average at over $500,000). 


Energy bills are currently the highest they’ve ever been. This has spurred many people to look into new ways of saving money on energy. Something that many people don’t realise is that energy bills can be based a lot on location. In fact, you could end up spending 3 times more per kWh in some states than others. 

Recent stats show that the average American pays $117 on their monthly electric bills. The most expensive state is Hawaii, where households spend a shocking $162 per month. The lowest meanwhile is Utah, where the average electricity bill is just $80.

It’s worth noting that these averages are based on average usage as well as cost per kWh. Washington actually has the cheapest cost per kWh at 9.87 cents. The cost per kWh in Utah is 10.44 cents (Utahns just happen to be more conservative with their electricity). Hawaiians use the least electricity of any state, but still have the highest bills simply because electricity costs a whopping 30.28 cents per kWh. 

As for water bills, Wisconsin pays the least per month – on average just $18. West Virginia has the highest water bills in the country – $91 per month (the rent may be cheap here, but you may not want to leave the tap running too long!). 


Want to spend less on groceries? The state that you live in could also have an impact on how much you pay on food and other essentials each month.

As of 2022, Oklahoma has some of the cheapest grocery bills. Half a gallon of milk costs you $1.50 here, while a dozen eggs cost $1.75.

New York meanwhile has the most expensive grocery bills. Prepare to spend $2.56 here for half a gallon of milk. You can also expect to shell out $6.70 on a carton of a dozen eggs!


Transport is another big monthly expense for many of us. While many of us are walking and cycling more often, we still rely heavily on a car or public transport to get around. 

Driving remains the most expensive way to get around. However, it can be much cheaper in some states than others. Gas prices vary across the country – which can affect car journey costs and bus/taxi fares. Currently, the cheapest state to buy gas is Mississippi, where it costs $3.08 per gallon. In California, the most expensive state, it meanwhile costs $5.76 per gallon (almost $3 more!).

What about buying a car? If you’re looking to purchase a cheap car, a trip to New Hampshire may be your best bet. With its low registration fees and low sales tax, it works out of the cheapest places to buy a vehicle.

New Hampshire is also the cheapest state to insure a car. The average insurance policy here is $940 per year. This is almost $1000 times cheaper than the average insurance policy taken out in New York. 

Public transport fares vary much more within each state. Cities tend to have some of the best public transport and some of the cheapest fares – Washington DC, Boston and San Francisco being some of the cheapest options. There are even free buses in some US cities. 


Your medical bills could also work out cheaper in some states. Stats show that in certain states, the average health insurance bill is a lot less. As health insurance rates are largely personalized, this could be down to people in certain states generally having a healthier lifestyle. However, where you live may still have an impact on your perceived risk factor. 

Georgia came out cheapest when it came to average health insurance rates – the average monthly insurance bill here is $309, which is 42% less than the national average. Close runners up include New Hampshire, Maryland and Minnesota.

Which state has the most expensive health insurance bills? Surprisingly, West Virginia is at the top with the average policyholder paying a whopping $831 per month. West Virginians may have some of the cheapest rent, but it seems a lot of this is made up for in high water bills and healthcare insurance costs. 

What is the cheapest US state to live in?

As you can see above, certain states are cheaper for certain expenses. But just what is the cheapest state to live in overall? 

Comparing all of the living costs, Mississippi is the state that probably takes the crown. It’s not just got the lowest gas prices of any state, but also scores well when it comes to many other expenses. For example, it’s one of the top 10 cheapest places to buy a house. It also scores second when it comes to cheapest groceries. On top of this, health insurance rates are 5.28% below the national average here. You will pay more for electricity bills here than most states, which is its biggest drawback – however, electricity is still a lot cheaper here than Hawaii!

It will likely depend on your lifestyle as to which is the cheapest state for you to live in. For example, if you live a life that demands a lot of electricity usage, you may find that Washington is the best place for you to live due to its very low electricity rates. 

Just remember that wages can also vary from state to state. Mississippi may have a much lower cost of living than California, but you may not earn as much for certain occupations. This is why many people still prefer to live in more expensive states – because this is where all the high paid jobs are.