20 Cheapest States to Live in the US

Whether you are on your way to college, straight out of it, or are settled somewhere already but considering moving elsewhere, we will help you make a budget-friendly choice. If you have a family then you must be well aware of the fact that family life can be expensive. Living in a more affordable state would help you provide more for your family and direct funds to more important things, like saving up for your kid’s college. If you are not there yet and are trying to make it on your own, well in that case too, living in a more affordable state can help you a great deal. You can have more money at your disposal, and we all know the importance of having a few extra dollars here and there. Our list of the 20 cheapest states to live in the US is also suitable for senior citizens, in case you are looking to retire somewhere tax-friendly for you.

The latest Cost of Living Data Series research conducted by the Missouri Economic Research and Information Center, or MERIC, collects data related to costs and expenses data from all states in the US. The latest installment for the Cost of Living Data Series came out for the first quarter of 2021. The cost of living index for a state is calculated based on 6 main indices which include utilities, groceries, housing, transportation, health, and miscellaneous expenses. The results of the Cost of Living Data Series research, for the first quarter of 2021, are not much different from the ones from previous years. They prove the Midwestern and Southern parts of the US have states that offer the cheapest living. The most expensive states were Hawaii, Alaska, California, and the states in the Northeast, and the West Coast. We made the Cost of Living Data Series the foundation for populating our list and built it on top of it.

According to Zillow,  The average value of a house in the United States borders $304,000 as of August 2021. United States home values have gone up 16.7% over the past year and Zillow predicts they will rise 12.1% in the next year. Zillow defined the range of the price of a typical single-family home from $113,626 to $683,470, depending on the state. The states with the most expensive homes mostly belong to the West, while the states with the cheapest homes mostly belong to the South. According to the Average Cost of College & Tuition report, The average cost of college in the US for a student is $35,720 per year. The cost has shown a threefold increase over the past 2 decades, reporting an annual growth rate of 6.8%. The average cost of in-state tuition is $9,580 and out-of-state tuition averages around $27,437.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores throughout the United States, so you can have access to the goods and services they provide no matter what state you are living in.

Our Methodology

You can find several lists on Insider Monkey, like the 17 Cheapest States to Live in the US for Families or the 16 Cheapest States to Live in the US for Seniors. To make sure our list of the 20 cheapest states to live in the US is well rounded and suitable for every possible reader, we consulted the Cost of Living Data Series, Smart Asset, a report by 24/7 Wall Street, a report by The Commonwealth Fund, and the Average Cost of College & Tuition report. We based our rankings on the following metrics cost of living index, median home price, average healthcare cost, average college tuition, and tax friendliness. We listed these metrics in their order of importance, giving the highest priority to the overall cost of living index, and the lowest priority to tax friendliness. A cost-of-living index is a theoretical price index that measures the relative cost of living over time in different regions. It measures differences in the price of goods and services and allows for substitutions with other items as prices vary. MERIC derives the cost of living index for each state by averaging the indices of participating cities and metropolitan areas in that state. Smart Asset To find the most tax-friendly states, Smart Asset analyzed how the tax policies of each city would impact a theoretical retiree with an annual income of $50,000. Their analysis assumes a retiree receiving $15,000 from Social Security benefits, $10,000 from a private pension, $10,000 in wages, and $15,000 from retirement savings accounts like a 401(k) or IRA. We also mentioned the median cost of child-care for infants and four-year-old children in each state, and we got these from here.

So without further ado, let’s take a look at the 20 cheapest states to live in the US.

20 Cheapest States to Live in the US

20. Kentucky

Cost Of Living Index: 94.5

Median Home Price: $160,589

Average Healthcare Cost: $7,136

Average College Tuition: $10,994

Tax Friendliness: Friendly

Living in Kentucky is easy on the pocket. You can own a house for about $161,000 and on average, in-state college tuition costs border $11,000. Out-of-pocket healthcare expenses amount to $7,136 on average. Kentucky also has some of the lowest child care costs in the United States. Infant care for a single child costs an average of $595 per month, and care for a four-year-old is costs around $535.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Kentucky, so you can have access to the goods and services they provide even upon moving to the state.

19. Illinois

Cost Of Living Index: 94.4

Median Home Price: $219,806

Average Healthcare Cost: $6,516

Average College Tuition: $14,687

Tax Friendliness: Friendly

Moving on, we have Illinois which is most famous for Chicago, the third most populous city in America. Illinois offers some of the best places to earn a college education, the University of Chicago being one of them. The average cost for college tuition in the state is $14,687, the highest on our list. Out-of-pocket healthcare expenses for an adult amount to $6,516, which is quite affordable in comparison to other states on our list. Housing and childcare, however, are relatively expensive in the state. The median home price amounts to $219,806 and infant care an average of $1,150 per month, a four-year-old child’s care costs around $864 per month.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Illinois, so you can have access to the goods and services they provide even upon moving to the state.

18. South Carolina

Cost Of Living Index: 94.2

Median Home Price: $206,647

Average Healthcare Cost: $7,137

Average College Tuition: $13,403

Tax Friendliness: Friendly

South Carolina is one of the 20 cheapest states to live in the US.  South Carolina has a lower cost of living than most states in the US and shows off some beautiful beaches that are warm all year round. You can get a house in the state for about $206,000. On average, annual college tuition costs around $13,403, the second-highest on our list. Out-of-pocket healthcare costs average at $7,137 for adults. South Carolina has some of the lowest child care costs by state. Child care centers charge an average of $584 per month for infant care and $500 per month for four-year-old children.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in South Carolina, so you can have access to the goods and services they provide even upon moving to the state.

17. Nebraska

Cost Of Living Index: 93.9

Median Home Price: $192,584

Average Healthcare Cost: $7,897

Average College Tuition: $8,721

Tax Friendliness: Not Friendly

Nebraska is one of the 20 cheapest states to live in the US, and it is the only not tax-friendly state on our list. The good things about Nebraska are its relatively low cost of in-state college tuition, healthcare, and affordable housing. The Cost of Living Data Series calculated Nebraska’s housing index which came out at 86.6 and its utility index which came out at 88.9. However, Nebraska has one of the highest child-care costs on our list of the 20 cheapest states to live in the US, parents pay an average of $1,048 per month for infant care and $952 per month for a four-year-old child.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Nebraska, so you can have access to the goods and services they provide even upon moving to the state.

16. Louisiana

Cost Of Living Index: 93.2

Median Home Price: $178,987

Average Healthcare Cost: $7,251

Average College Tuition: $9,639

Tax Friendliness: Friendly

Next up, we have Louisiana which is a tax-friendly state and also offers affordable healthcare facilities. Fun fact, Louisiana is named after the French King Louis XIV. Louisiana is famous for its cultural richness, creative and scrumptious food, music, and the Mardi Gras festival. You can also find fishing, state parks, and wartime exhibits in the state. Cities like New Orleans, Lafayette, and Baton Rouge offer good schools and healthcare systems. The average cost of college tuition for an in-state student per year is $9,639, and potential out-of-pocket costs for healthcare are as low as $7,251. For infant care, parents have to pay an average of $644 per month in Lousiana. For a four-year-old, the cost drops to $576 per month.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Louisiana, so you can have access to the goods and services they provide even upon moving to the state.

15. West Virginia

Cost Of Living Index: 93.1

Median Home Price: $113,626

Average Healthcare Cost: $6,053

Average College Tuition: $8,256

Tax Friendliness: Friendly

West Virginia offers the cheapest housing on our list of the 20 cheapest states to live in the US, you can get a home for $113,626. The out-of-pocket healthcare costs in this state are relatively low too, they cover a single individual for about $6,000. The average cost of college for an in-state student is $8,256 per year. You must be thinking why is West Virginia so far up on our list. The Cost of Living Data Series gave West Virginia an overall index of 93.1 which is because of its transportation and grocery indices, 104.8 and 97.9 respectively. Monthly child care in West Virginia costs around an average of $728 per month for infant care and $637 per month for a four-year-old’s care.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in West Virginia, so you can have access to the goods and services they provide even upon moving to the state.

14. Texas

Cost Of Living Index: 92.3

Median Home Price: $224,466

Average Healthcare Cost: $8,239

Average College Tuition: $8,938

Tax Friendliness: Friendly

Living in Texas is cheaper than it is on average across the US. However, when it comes to housing Texas is among the most expensive states on our list of the 20 cheapest states to live in the US. A house typically costs around $224,466 in Texas. Out-of-pocket healthcare costs are just a tad above $8,000 and costs for college tuition go up to $9,000. When it comes to tax-friendliness, Texas is tax-friendly and is a good option for senior citizens. Texas is a financially thriving state, that offers great outdoors, lots of high-paid jobs, and modest prices. The Cost of Living Data Series gave Texas a grocery index of 91.2, and a transportation index of 90.9, both suggesting costs below average. Houston and Austin offer the best quality public schools and the highest median income. Child care centers in Texas charge an average rate of $777 per month for infant care. For a four-year-old child, child care centers charge an average of $589 across the state.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Texas, so you can have access to the goods and services they provide even upon moving to the state.

13. Michigan

Cost Of Living Index: 91.9

Median Home Price: $192,093

Average Healthcare Cost: $5,453 

Average College Tuition: $13,275

Tax Friendliness: Friendly

Michigan is one of the most expensive states it comes to an in-state college education. However, Michigan offers the cheapest healthcare with potential out-of-pocket healthcare costs not topping $5,500 on average. Michigan also offers relatively cheaper housing, the Cost of Living Data Series gave Michigan a housing index of 80.2 and you can get a decent house in the state for about $192,000. Child care in Michigan is relatively expensive by state. Infant care in a child care facility averages around $900 every month, and for a four-year-old the cost averages around $740 per month.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Michigan, so you can have access to the goods and services they provide even upon moving to the state.

12. Ohio

Cost Of Living Index: 91.6

Median Home Price: $168,226

Average Healthcare Cost: $6,563

Average College Tuition: $10,370

Tax Friendliness: Moderately Friendly

If you like being one with nature, you should definitely consider Ohio. The state is home to breathtaking natural sites, especially around Lake Eire, Ohio River, and Cuyahoga Valley. You can own a house in Ohio for $168,000 on average, and the state also offers cheap healthcare, with out-of-pocket healthcare spending amounting to $6,563 on average. Ohio’s monthly child care is an average of $808 per month for an infant and $658 per month for care for a four-year-old child. Ohio is one of the 20 cheapest states to live in the US.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Ohio, so you can have access to the goods and services they provide even upon moving to the state.

11. New Mexico

Cost Of Living Index: 90.9

Median Home Price: $229,947

Average Healthcare Cost: $6,652

Average College Tuition: $7,109

Tax Friendliness: Moderately Friendly

Moving on to the top 10, we have New Mexico ranking at number 11 on the 20 cheapest states to live in the US. New Mexico is moderately tax-friendly, offers cheap and affordable healthcare averaging around $6,652, and also relatively cheaper average annual college tuition costs amounting to $7,109. Infant care costs an average of $718 per month in New Mexico, and care for a four-year-old child costs an average of $634 per month. The median home price in New Mexico is close to $230,000, the highest on our list, but still having an overall cost of living index of 90.9 moved it up.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in New Mexico, so you can have access to the goods and services they provide even upon moving to the state.

10. Missouri

Cost Of Living Index: 90.4

Median Home Price: $180,253

Average Healthcare Cost: $7,127

Average College Tuition: $8,811

Tax Friendliness: Moderately Friendly

Up next we have Missouri on the 20 cheapest states to live in the US, where college tuition averages around $8,811 and out-of-pocket healthcare costs average around $7,127. Child-care however, costs a little higher than it does in most other states, at an average of $837 per month for infants and $584 per month for four-year-olds. Missouri had the 9th lowest cost of living in the United States for the first quarter of 2021 according to the Cost of Living Data Series, but it is ranked at number 10 on the 20 cheapest states to live in the US because of its higher housing costs. Iowa and Missouri had the same overall cost of living index, but since we gave second priority to the median home price, Iowa beat Missouri.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Missouri, so you can have access to the goods and services they provide even upon moving to the state.

9. Iowa

Cost Of Living Index: 90.4

Median Home Price: $158,930

Average Healthcare Cost: $6,646

Average College Tuition: $10,265

Tax Friendliness: Moderately Friendly

Iowa lets you enjoy all four seasons, and it has a lower cost of living than most other states. Iowa also offers quality education thanks to some top-of-the-line colleges like Iowa State University and the University of Iowa. The average price for a house in the state is $158,930. Healthcare comes cheaply here, out-of-pocket healthcare costs average around $6,646. Monthly child-care costs average at $865 per month for infants, and for four-year-olds, the cost approaches $719 per month.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Iowa, so you can have access to the goods and services they provide even upon moving to the state.

8. Indiana

Cost Of Living Index: 89.8

Median Home Price: $172,769

Average Healthcare Cost: $7,462

Average College Tuition: $9,502

Tax Friendliness: Moderately Friendly

Indiana is 0ne of the 20 cheapest states to live in the US and is also relatively tax-friendly. You can own a house in the state for about $170,000. Out-of-pocket healthcare costs average around $7,462 and in-state college tuition averages around $9,502. The state has an overall cost of living index of 89.8 but is relatively expensive when it comes to child-care. The average monthly cost for center-based infant care is approximately $1,051. For a four-year-old child, the costs averages around $800 per month.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Indiana, so you can have access to the goods and services they provide even upon moving to the state.

7. Georgia

Cost Of Living Index: 89.7

Median Home Price: $223,945

Average Healthcare Cost: $7,812

Average College Tuition: $7,539

Tax Friendliness: Very Friendly

Georgia is the most tax-friendly state on our list of the 20 cheapest states to live in the US. The state features big metropolitan areas, mountains, forests, beaches, and tasty homegrown organic produce. Georgia offers relatively cheap annual college tuition costs that average around $7,500. Out-of-pocket healthcare expenses average out at $7,812. Housing is where Georgia does not shine that well. The median home price in Georgia is $223,945, among the highest on our list.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Georgia, so you can have access to the goods and services they provide even upon moving to the state.

6. Arkansas

Cost Of Living Index: 88.8

Median Home Price: $142,070

Average Healthcare Cost: $6,742

Average College Tuition: $8,643

Tax Friendliness: Friendly

From the Ozarks to the Mississippi River, Arkansas offers incredible landscape diversity, and that too for not too much money. You can buy a house in the state for about $142,000 on average. Out-of-pocket healthcare expenses amount to $6,742 for an adult, and tuition costs for college average out at $8,643 annually. The state also offers one of the most affordable child-care facilities, with the average cost for infant care amounting to $574 per month, and for four-year-olds an average cost of $457 per month. The state’s overall cost of living index is calculated to be 88.8, meriting its 6th position on the 20 cheapest states to live in the US.

Companies like Walmart Inc. (NYSE: WMT), Costco Wholesale Corporation (NASDAQ: COST), The Home Depot, Inc. (NYSE: HD), Kohl’s Corporation (NYSE: KSS), Target Corporation (NYSE: TGT), and The ODP Corporation (NASDAQ: ODP) own and operate multiple stores in Arkansas, so you can have access to the goods and services they provide even upon moving to the state.

5. Tennessee

Cost Of Living Index: 88.5

Median Home Price: $207,727

Average Healthcare Cost: $7,900

Average College Tuition: $10,083

Tax Friendliness: Friendly

Moving on, we have Tennessee among the cheapest states to live in the US. You can own a house for about $207,000 in the state. Out-of-pocket healthcare costs amount to $7,900 on average for an adult, and child-care centers in Tennessee charge $728 per month for infant care and $622 per month to provide routine care for a four-year-old child. The state is also home to two highly rated universities, Tennessee Tech and East Tennessee State University. The average cost of college tuition in Tennessee borders $10,000.