As inflation quickly rises, perhaps at a faster rate than your income, finding an affordable place to live is important. What makes a state affordable? Is finding the cheapest state to live in a good thing? Let’s explore some of the most affordable states to live in as of 2022.
How are the cheapest states to live in calculated?
There are specific ways that the cheapest states to live in are calculated every year. The Council for Community and Economic Research gives each state a score based on how far the dollar will go, with 60 categories like the cost of housing, food, energy, etc.
Top 10 most affordable states to live in
According to the council, here are the top 10 least expensive states to live in as of 2022.
|State||Cost of Living Index Score||Median Household Income||Average Home Price 2021|
What does cost of living mean and how does it work?
The Council for Community and Economic Research adapted an index where 100 is considered the average cost of living. If a state has a cost of living index that is less than 100, then it is considered to be more affordable than the average.
3 factors to consider with the cost of living index score
The cost of living index score includes several factors to help determine a final score.
Cost of living
The cost of living by state refers to everyday items and basic living expenses. This means groceries, water, utilities, transportation, and clothes, among other things.
Cost of living varies from state to state because the prices of these necessities are higher or lower depending on where you live. Luxury items or high brands are not part of the standard when considering the cost of living.
Average household income
The average household income is the total amount of money collected in a household before taxes. Any member of the household above the age of 15 that brings in income is considered.
Housing and property costs
Housing and property costs vary significantly from state to state and can play a major role in the cost of living. This cost includes the average amount it would cost to rent an apartment or purchase a home, homeowner association fees, and even household maintenance.
Make your money stretch further
Now that more employers are allowing us to work at home, you might be able to move to a less-expensive state and make your income stretch further. Some companies, however, do have a policy of adjusting employee pay lower if they move to less-expensive regions. Check with your human resources department as part of the process of thinking about moving.
Which state has the lowest cost of living?
Mississippi has the lowest cost of living as of 2021.
What state has the cheapest rent?
Arkansas has the lowest housing costs in America as of 2021.
What is the cheapest warm state to live in?
Both Georgia and Alabama offer warm temperatures at low costs of living.