Introduction
The cost of living refers to the amount of money that a person needs to maintain a certain standard of living. It includes expenses such as food, housing, utilities, transportation, healthcare, and other necessities. The cost of living varies greatly depending on the location, lifestyle, and income level of an individual. Measuring the cost of living involves calculating the prices of goods and services in a specific area and comparing them to a base year. This process helps to determine the inflation rate, which affects the purchasing power of consumers.
The concept of the cost of living emerged in the 19th century as a way to measure the economic wellbeing of individuals and communities. The industrial revolution brought about significant changes in the way people lived and worked, leading to a greater need for accurate measures of economic activity. In the 1930s, the United States government began using the cost of living index to adjust social security payments, which led to a greater understanding of the relationship between inflation and the cost of living. Today, many countries use various methods to measure the cost of living, including the consumer price index, which tracks the prices of a basket of goods and services over time.
The cost of living has significant implications for individuals, businesses, and governments. Rising costs can lead to financial hardship for those on fixed incomes, while businesses may struggle to compete in an environment where prices are high. Governments use the cost of living to determine minimum wage rates, taxation, and social programs, among other things. Overall, understanding the cost of living is an essential part of financial planning and decision-making for individuals and organizations alike.
Cost of Living Index by State
# | State | Cost of Living Index | Average Living Wage | Minimum Wage | Median Household Income |
---|---|---|---|---|---|
1 | Hawaii | 184 | $21.99 | $10.1 | $82,199 |
2 | District of Columbia | 152.2 | $23.13 | $10.5 | $90,640 |
3 | Massachusetts | 149.7 | $21.88 | $14.25 | $86,566 |
4 | California | 137.6 | $21.82 | $14 | $81,575 |
5 | New York | 134.5 | $21.99 | $13.2 | $72,920 |
6 | Alaska | 126.6 | $16.72 | $10.34 | $81,133 |
7 | Maryland | 124 | $19.74 | $12.5 | $97,332 |
8 | Oregon | 121.2 | $19.51 | $13.5 | $81,855 |
9 | Connecticut | 116.8 | $19 | $14 | $80,958 |
10 | New Hampshire | 116.1 | $17.32 | $7.25 | $88,841 |
11 | Vermont | 115.9 | $17.81 | $12.55 | $76,079 |
12 | Maine | 115.3 | $17.88 | $12.75 | $71,139 |
13 | Washington | 114.2 | $18.54 | $14.49 | $87,648 |
14 | Rhode Island | 112.9 | $17.8 | $12.25 | $74,982 |
15 | New Jersey | 112.4 | $20.57 | $13 | $88,559 |
16 | Arizona | 105.8 | $17.43 | $12.8 | $70,821 |
17 | Delaware | 105.6 | $17.74 | $15.2 | $68,687 |
18 | Montana | 104.8 | $16.32 | $9.2 | $64,999 |
19 | Colorado | 104.6 | $19.16 | $12.56 | $84,954 |
20 | Nevada | 103.2 | $16.24 | $10.5 | $64,340 |
21 | Florida | 102.8 | $17.24 | $10 | $59,734 |
22 | Utah | 102.8 | $16.98 | $7.25 | $87,649 |
23 | Virginia | 102.8 | $19.4 | $11 | $80,268 |
24 | Idaho | 99.6 | $16.16 | $7.25 | $76,918 |
25 | Pennsylvania | 98.2 | $16.67 | $7.25 | $72,627 |
26 | Minnesota | 97.5 | $17.74 | $10.33 | $80,441 |
27 | North Dakota | 97.1 | $15.37 | $7.25 | $68,882 |
28 | North Carolina | 95.7 | $17.14 | $7.25 | $62,891 |
29 | Wisconsin | 95.5 | $16.4 | $7.25 | $69,943 |
30 | Kentucky | 94.9 | $15.46 | $7.25 | $55,629 |
31 | South Dakota | 94.5 | $14.85 | $9.95 | $73,893 |
32 | South Carolina | 94.3 | $17.47 | $7.25 | $62,542 |
33 | New Mexico | 94 | $16.25 | $11.5 | $53,463 |
34 | Louisiana | 93.6 | $16.15 | $7.25 | $57,206 |
35 | Illinois | 92.6 | $18.16 | $12 | $79,253 |
36 | Texas | 92.5 | $16.41 | $7.25 | $67,404 |
37 | Wyoming | 92.5 | $15.25 | $7.25 | $71,052 |
38 | Michigan | 92.2 | $16.36 | $9.87 | $64,488 |
39 | Nebraska | 91.9 | $16.6 | $9 | $78,109 |
40 | Ohio | 91.9 | $15.61 | $9.3 | $62,689 |
41 | Arkansas | 90.6 | $15.55 | $11 | $50,784 |
42 | Tennessee | 90.2 | $15.45 | $7.25 | $62,166 |
43 | West Virginia | 90 | $15.45 | $8.75 | $46,836 |
44 | Indiana | 89.9 | $15.79 | $7.25 | $70,190 |
45 | Iowa | 89.2 | $16.18 | $7.25 | $72,429 |
46 | Missouri | 89.1 | $16.29 | $11.15 | $63,594 |
47 | Georgia | 88.6 | $17.64 | $7.25 | $61,497 |
48 | Alabama | 88.1 | $15.91 | $7.25 | $56,929 |
49 | Kansas | 87.5 | $16.38 | $7.25 | $75,979 |
50 | Oklahoma | 85.8 | $15.75 | $7.25 | $60,096 |
51 | Mississippi | 85 | $15.66 | $7.25 | $46,637 |
Cost of Living Index
The cost of living index is a measurement that calculates the amount of money needed to cover the basic necessities of life in a particular location. It takes into account the prices of goods and services that an average person might consume, such as housing, food, transportation, healthcare, and entertainment. The cost of living index is often used by individuals, businesses, and governments to assess the cost of living in different regions or countries. The index is generally expressed as a numerical value, with higher values indicating a higher cost of living.
The cost of living index is useful for comparing the standard of living in different locations. For example, if the cost of living index for New York City is higher than that of Chicago, it suggests that it is more expensive to live in New York City. This can be useful for people who are considering relocating, as it allows them to make informed decisions about where to live based on their financial situation. The cost of living index can also help businesses determine where to set up shop, as it gives them an idea of the cost of labor and other expenses in different areas.
One limitation of the cost of living index is that it may not accurately reflect the cost of living for everyone in a particular location. This is because different people have different lifestyles and consumption habits. For example, a family with children may have higher expenses related to education and childcare than a single person. Similarly, someone who prefers to eat out at restaurants frequently may have higher food expenses than someone who cooks at home. Despite this limitation, the cost of living index remains a valuable tool for assessing the general cost of living in different locations and making informed financial decisions.
US Cost of Living Index
The average cost of living index in the US varies significantly by location. This index measures the expenses that an individual or family is likely to incur in different states or cities. The index includes costs such as housing, transportation, food, healthcare, and taxes. According to the latest data, the highest cost of living can be found in cities such as San Francisco, New York, and Los Angeles. In contrast, cities like Oklahoma, Arkansas, and Kentucky have lower cost of living indexes.
Housing is one of the major expenses that contribute to the cost of living index. Renting or owning a home in cities with high demand and limited supply, such as San Francisco or New York, can be incredibly expensive. On the other hand, living in the suburbs or smaller cities is usually more affordable. The cost of transportation also affects the index. Cities with good public transportation systems, such as New York or Boston, can offer lower transportation costs. Additionally, food and healthcare expenses can vary greatly depending on location, lifestyle, and income.
Overall, the average cost of living index in the US is influenced by a wide range of factors. However, it’s important to remember that the index is just an estimate and may not reflect everyone’s personal situation. Some individuals may have lower or higher expenses depending on their needs, preferences, and budget. Understanding the cost of living index can be helpful for those who are considering relocating or planning a budget for their daily expenses.
Cost of Living by State
The cost of living index by state varies greatly across the United States, as seen in the table provided. Hawaii has the highest cost of living index, at 184, while Mississippi has the lowest cost of living index, at 85. This indicates that the cost of living in Hawaii is nearly twice as high as it is in Mississippi. The cost of living index is calculated by comparing the prices of goods and services in each state to the national average, and taking into account factors such as housing, food, transportation, and healthcare. The higher the cost of living index, the more expensive it is to live in that state.
Some of the states with the highest cost of living index are also some of the most densely populated and popular for tourism, such as Hawaii, California, New York, and Massachusetts. These states typically have higher housing costs, as well as higher prices for goods and services due to high demand. In contrast, some of the states with the lowest cost of living index are more rural and less populated, such as Mississippi, Kansas, and Oklahoma. These states may have lower housing costs, as well as lower prices for goods and services due to lower demand.
Highest Cost of Living in the US
Hawaii is the state with the highest cost of living in the US, with a cost of living index of 184. This index is a measurement of the price of goods and services in comparison to other regions in the country, with 100 being the national average. This high rating can be attributed to several factors, such as the cost of imported goods due to the state’s isolation, high housing costs, and a reliance on tourism.
Lowest Cost of Living in the US
Mississippi is known to have the lowest cost of living in the United States, with a cost of living index of 85. This means that the state is more affordable than other states in terms of the basic necessities of life, including housing, food, healthcare, transportation, and other expenses. For residents of Mississippi, the lower cost of living translates to more disposable income, making it an attractive place to live for those who want to stretch their budget. Moreover, the state’s economy is also growing, with many businesses and industries taking advantage of the low costs and friendly business environment.
Cost of Living Index by State
Alabama
Ranked in the US
#48
Average Living Wage
$15.91
Ranked in the US
#40
$7.25
Ranked in the US
#32
$56,929
Ranked in the US
#46
Alaska
126.6
Ranked in the US
#6
Average Living Wage
$16.72
Ranked in the US
#26
$10.34
Ranked in the US
#22
$81,133
Ranked in the US
#12
Arizona
105.8
Ranked in the US
#16
Average Living Wage
$17.43
Ranked in the US
#21
$12.8
Ranked in the US
#9
$70,821
Ranked in the US
#28
Arkansas
Ranked in the US
#41
Average Living Wage
$15.55
Ranked in the US
#45
$11
Ranked in the US
#18
$50,784
Ranked in the US
#49
California
137.6
Ranked in the US
#4
Average Living Wage
$21.82
Ranked in the US
#5
$14
Ranked in the US
#4
$81,575
Ranked in the US
#11
California has the fourth highest cost of living index in the country with a cost of living index of 137.6. The high cost of living index is well above the national average and is due to California's expansive economy, which includes many expensive coastal cities such as San Francisco and Los Angeles. Rent prices are particularly high in these metropolitan areas, making them some of the most costly rental markets in the nation. Moreover, food costs are also higher than average due to California's diverse agricultural production and its status as a major export hub for produce and other food items. Lastly, transportation costs are relatively high due to regulatory taxes on gasoline that make filling up more expensive than in other parts of the country. All these factors combined contribute to California's high cost of living index.
Colorado
104.6
Ranked in the US
#19
Average Living Wage
$19.16
Ranked in the US
#10
$12.56
Ranked in the US
#11
$84,954
Ranked in the US
#8
Connecticut
116.8
Ranked in the US
#9
Average Living Wage
$19
Ranked in the US
#11
$14
Ranked in the US
#5
$80,958
Ranked in the US
#13
Delaware
105.6
Ranked in the US
#17
Average Living Wage
$17.74
Ranked in the US
#17
$15.2
Ranked in the US
#1
$68,687
Ranked in the US
#32
District of Columbia
152.2
Ranked in the US
#2
Average Living Wage
$23.13
Ranked in the US
#1
$10.5
Ranked in the US
#20
$90,640
Ranked in the US
#2
Florida
102.8
Ranked in the US
#21
Average Living Wage
$17.24
Ranked in the US
#23
$10
Ranked in the US
#25
$59,734
Ranked in the US
#44
Florida has the twenty-first highest cost of living index in the nation with a cost of living index of 102.8. Florida's cost of living index is slightly higher than the national average, meaning goods and services in the state cost about 2.8% more than the national average. The most expensive areas for goods and services in Florida are Miami-Dade County, where goods and services are even higher than the state's average; followed by West Palm Beach-Boca Raton. On the other hand, areas like Jacksonville, Orlando, and Tampa have prices that match or even dip below the national average.
Georgia
Ranked in the US
#47
Average Living Wage
$17.64
Ranked in the US
#19
$7.25
Ranked in the US
#33
$61,497
Ranked in the US
#42
Hawaii
Ranked in the US
#1
Average Living Wage
$21.99
Ranked in the US
#2
$10.1
Ranked in the US
#24
$82,199
Ranked in the US
#9
Hawaii has the highest cost of living index in the United States with a cost of living index of 184. Hawaii's cost of living index is well above the national average, which means that many people find it difficult to afford living there. The high cost of living in Hawaii is largely due to the taxes associated with property and other purchases, as well as the significant amount of freight costs associated with shipping goods from the mainland. Additionally, due to its tropical climate and geographical location, Hawaii often experiences issues with food insecurity. The result is higher prices for basic foods such as produce and dairy products. Despite its high cost of living index, Hawaii remains a popular destination for travelers due to its stunning landscape and rich cultural heritage.
Idaho
Ranked in the US
#24
Average Living Wage
$16.16
Ranked in the US
#38
$7.25
Ranked in the US
#34
$76,918
Ranked in the US
#18
Illinois
Ranked in the US
#35
Average Living Wage
$18.16
Ranked in the US
#13
$12
Ranked in the US
#15
$79,253
Ranked in the US
#16
Indiana
Ranked in the US
#44
Average Living Wage
$15.79
Ranked in the US
#41
$7.25
Ranked in the US
#35
$70,190
Ranked in the US
#29
Iowa
Ranked in the US
#45
Average Living Wage
$16.18
Ranked in the US
#37
$7.25
Ranked in the US
#36
$72,429
Ranked in the US
#25
Kansas
Ranked in the US
#49
Average Living Wage
$16.38
Ranked in the US
#31
$7.25
Ranked in the US
#37
$75,979
Ranked in the US
#20
Kentucky
Ranked in the US
#30
Average Living Wage
$15.46
Ranked in the US
#46
$7.25
Ranked in the US
#38
$55,629
Ranked in the US
#47
Louisiana
Ranked in the US
#34
Average Living Wage
$16.15
Ranked in the US
#39
$7.25
Ranked in the US
#39
$57,206
Ranked in the US
#45
Maine
115.3
Ranked in the US
#12
Average Living Wage
$17.88
Ranked in the US
#14
$12.75
Ranked in the US
#10
$71,139
Ranked in the US
#26
Maryland
Ranked in the US
#7
Average Living Wage
$19.74
Ranked in the US
#7
$12.5
Ranked in the US
#13
$97,332
Ranked in the US
#1
Massachusetts
149.7
Ranked in the US
#3
Average Living Wage
$21.88
Ranked in the US
#4
$14.25
Ranked in the US
#3
$86,566
Ranked in the US
#7
Michigan
Ranked in the US
#38
Average Living Wage
$16.36
Ranked in the US
#32
$9.87
Ranked in the US
#27
$64,488
Ranked in the US
#35
Minnesota
Ranked in the US
#26
Average Living Wage
$17.74
Ranked in the US
#18
$10.33
Ranked in the US
#23
$80,441
Ranked in the US
#14
Mississippi
Ranked in the US
#51
Average Living Wage
$15.66
Ranked in the US
#43
$7.25
Ranked in the US
#40
$46,637
Ranked in the US
#51
Missouri
Ranked in the US
#46
Average Living Wage
$16.29
Ranked in the US
#34
$11.15
Ranked in the US
#17
$63,594
Ranked in the US
#37
Montana
104.8
Ranked in the US
#18
Average Living Wage
$16.32
Ranked in the US
#33
$9.2
Ranked in the US
#29
$64,999
Ranked in the US
#34
Nebraska
Ranked in the US
#39
Average Living Wage
$16.6
Ranked in the US
#28
Ranked in the US
#30
$78,109
Ranked in the US
#17
Nevada
103.2
Ranked in the US
#20
Average Living Wage
$16.24
Ranked in the US
#36
$10.5
Ranked in the US
#21
$64,340
Ranked in the US
#36
New Hampshire
116.1
Ranked in the US
#10
Average Living Wage
$17.32
Ranked in the US
#22
$7.25
Ranked in the US
#41
$88,841
Ranked in the US
#3
New Jersey
112.4
Ranked in the US
#15
Average Living Wage
$20.57
Ranked in the US
#6
$13
Ranked in the US
#8
$88,559
Ranked in the US
#4
New Mexico
Ranked in the US
#33
Average Living Wage
$16.25
Ranked in the US
#35
$11.5
Ranked in the US
#16
$53,463
Ranked in the US
#48
New York
134.5
Ranked in the US
#5
Average Living Wage
$21.99
Ranked in the US
#3
$13.2
Ranked in the US
#7
$72,920
Ranked in the US
#23
New York has the fifth highest cost of living index in the country with a cost of living index of 134.5. The high cost of living in New York is driven by factors such as housing costs, which are some of the highest in the nation, as well as transportation and food costs which are significantly higher than in other states. Taxes are another major factor when it comes to New York's cost of living index; these taxes include state income tax, sales tax, and property tax. Moreover, wages for many professions, including healthcare and finance professionals, tend to be higher in New York City than elsewhere in the country. This contributes to increasing costs all around for both businesses and individuals who live there.
North Carolina
Ranked in the US
#28
Average Living Wage
$17.14
Ranked in the US
#24
$7.25
Ranked in the US
#42
$62,891
Ranked in the US
#38
North Dakota
Ranked in the US
#27
Average Living Wage
$15.37
Ranked in the US
#49
$7.25
Ranked in the US
#43
$68,882
Ranked in the US
#31
Ohio
Ranked in the US
#40
Average Living Wage
$15.61
Ranked in the US
#44
$9.3
Ranked in the US
#28
$62,689
Ranked in the US
#39
Oklahoma
Ranked in the US
#50
Average Living Wage
$15.75
Ranked in the US
#42
$7.25
Ranked in the US
#44
$60,096
Ranked in the US
#43
Oregon
121.2
Ranked in the US
#8
Average Living Wage
$19.51
Ranked in the US
#8
$13.5
Ranked in the US
#6
$81,855
Ranked in the US
#10
Oregon has the eighth highest cost of living index in the country with a cost of living index of 121.2. The cost of living in Oregon is primarily driven by housing costs, with home prices higher than the national average. In addition, transportation, utilities, and groceries are also more expensive compared to other states. Overall, the cost of living index for Oregon is considered high when compared to the other states in America and can be a factor for people considering travel or relocation to the state.
Pennsylvania
Ranked in the US
#25
Average Living Wage
$16.67
Ranked in the US
#27
$7.25
Ranked in the US
#45
$72,627
Ranked in the US
#24
Rhode Island
112.9
Ranked in the US
#14
Average Living Wage
$17.8
Ranked in the US
#16
$12.25
Ranked in the US
#14
$74,982
Ranked in the US
#21
South Carolina
Ranked in the US
#32
Average Living Wage
$17.47
Ranked in the US
#20
$7.25
Ranked in the US
#46
$62,542
Ranked in the US
#40
South Dakota
Ranked in the US
#31
Average Living Wage
$14.85
Ranked in the US
#51
$9.95
Ranked in the US
#26
$73,893
Ranked in the US
#22
Tennessee
Ranked in the US
#42
Average Living Wage
$15.45
Ranked in the US
#47
$7.25
Ranked in the US
#47
$62,166
Ranked in the US
#41
Texas
Ranked in the US
#36
Average Living Wage
$16.41
Ranked in the US
#29
$7.25
Ranked in the US
#48
$67,404
Ranked in the US
#33
Texas has the thirty-sixth highest cost of living index in the country with a cost of living index of 92.5. Texas' cost of living index is lower than the national average, making it an attractive place to live for those who want to save money while still enjoying a comfortable lifestyle. In comparison to states with a higher cost of living index, Texas offers significantly lower costs for everyday necessities. Additionally, certain metropolitan cities within Texas, such as El Paso and Amarillo, boast even lower costs due to local economic factors like geographical location and job availability. As such, many people in Texas benefit from relatively affordable prices on basic goods and services compared to those found in other parts of the country.
Utah
102.8
Ranked in the US
#22
Average Living Wage
$16.98
Ranked in the US
#25
$7.25
Ranked in the US
#49
$87,649
Ranked in the US
#5
Vermont
115.9
Ranked in the US
#11
Average Living Wage
$17.81
Ranked in the US
#15
$12.55
Ranked in the US
#12
$76,079
Ranked in the US
#19
Virginia
102.8
Ranked in the US
#23
Average Living Wage
$19.4
Ranked in the US
#9
$11
Ranked in the US
#19
$80,268
Ranked in the US
#15
Washington
114.2
Ranked in the US
#13
Average Living Wage
$18.54
Ranked in the US
#12
$14.49
Ranked in the US
#2
$87,648
Ranked in the US
#6
West Virginia
Ranked in the US
#43
Average Living Wage
$15.45
Ranked in the US
#48
$8.75
Ranked in the US
#31
$46,836
Ranked in the US
#50
Wisconsin
Ranked in the US
#29
Average Living Wage
$16.4
Ranked in the US
#30
$7.25
Ranked in the US
#50
$69,943
Ranked in the US
#30
Wyoming
Ranked in the US
#37
Average Living Wage
$15.25
Ranked in the US
#50
$7.25
Ranked in the US
#51
$71,052
Ranked in the US
#27
Wyoming has the thirty-seventh highest cost of living index in the country with a cost of living index of 92.5. Wyoming's cost of living index is slightly lower than the national average. The country offers many advantages such as access to public transportation, a wide range of entertainment options, and numerous outdoor activities for those looking for some fresh air. Additionally, the cost of housing in Wyoming is relatively lower than that of other states in the country. With its low taxes and relatively low cost of living index, Wyoming is an attractive place to live for those looking for an area with a more affordable cost of living.
FAQs
Which state has the lowest cost of living in the US ?
The state with the lowest cost of living in the US is Mississippi, with a cost of living index of 85.
Which state has the highest cost of living in the US ?
The state with the highest cost of living in the US is Hawaii, with a cost of living index of 184.
What are the states with the lowest cost of living index ?
The 10 states with the lowest cost of living index are :
1. Hawaii – 184
2. Massachusetts – 149.7
3. California – 137.6
4. New York – 134.5
5. Alaska – 126.6
6. Maryland – 124
7. Oregon – 121.2
8. Connecticut – 116.8
9. New Hampshire – 116.1
10. Vermont – 115.9