Oklahoma is the cheapest state to live in, with a cost-of-living index of 84.4, meaning everyday expenses there run about 15.6% below the national average. Mississippi (85.5), Alabama (87.9), West Virginia (88.1), and Kansas (88.9) round out the top five. All ten of the most affordable states sit well below the national baseline of 100, which means your dollar stretches meaningfully further in any of them.
The 10 Most Affordable States
Cost-of-living indexes measure how much a typical basket of goods, housing, utilities, transportation, and healthcare costs in one place compared to the national average. A score of 100 is the baseline. Anything below 100 means life is cheaper than average; anything above means it’s more expensive. Here are the ten states with the lowest scores:
- Oklahoma: 84.4
- Mississippi: 85.5
- Alabama: 87.9
- West Virginia: 88.1
- Kansas: 88.9
- Missouri: 89.0
- Arkansas: 89.3
- Iowa: 90.3
- Tennessee: 90.3
- Indiana: 90.6
The pattern is clear: Southern and Midwestern states dominate the list. These regions share lower population density, cheaper land, and housing markets that never experienced the same runaway price growth as coastal metros. The gap between Oklahoma at 84.4 and a high-cost state can be enormous. If you earn $60,000 a year, living in a state with a 115 index versus Oklahoma’s 84.4 is roughly the equivalent of a $22,000 difference in purchasing power.
Housing Drives the Biggest Savings
Housing is the single largest expense for most households, and it’s the category where cheap states pull furthest ahead. West Virginia has the lowest median monthly rent in the country at $831, followed by Arkansas at $868 and Mississippi at $896. Compare that to coastal markets where median rents commonly exceed $1,500 or $2,000, and you can see why housing alone accounts for much of the cost-of-living gap.
Home prices follow a similar pattern. In these affordable states, median home values tend to sit well below the national median, making homeownership realistic on a moderate income. A household earning $50,000 a year can comfortably afford a mortgage in most parts of Oklahoma or Mississippi, while that same income would barely cover rent in many parts of the Northeast or West Coast. If you’re relocating specifically to buy a home, these states offer the shortest path to ownership.
How Taxes Affect Your Real Costs
A low sticker price on housing and groceries doesn’t tell the full story if the state takes a large bite through taxes. Several of the cheapest states also rank well on tax competitiveness, but the relationship isn’t automatic.
Tennessee, which ties for eighth on the cost-of-living list, has no state income tax. That’s a significant advantage if you earn a salary or draw retirement income. Indiana levies all the major tax types (income, sales, and property) but keeps rates modest enough to land in the top ten for tax competitiveness nationally. Kansas and Missouri both charge income tax, which can eat into the savings you gain from cheaper housing.
If minimizing your total tax burden is a priority alongside low living costs, Tennessee and Indiana offer the best overlap between affordability and favorable tax policy on this list. States like Wyoming, South Dakota, and Florida rank among the very best for taxes (with no income tax and, in some cases, no corporate income tax), but their overall cost of living isn’t as low as the Southern and Midwestern states that top the affordability list.
Groceries, Gas, and Utilities
Day-to-day expenses like food and energy vary less dramatically between states than housing does, but the differences still add up over a year. As a general rule, the same affordable states that offer cheap housing also tend to have below-average grocery and utility costs. Lower commercial rents mean lower overhead for stores, and energy costs in the South and Midwest benefit from access to natural gas and lower electricity rates compared to the West Coast or New England.
To put this in perspective, electricity in the West region averages about $0.224 per kilowatt-hour, and regular gasoline runs close to $4.92 per gallon. In the South and Midwest, both figures tend to be noticeably lower. A household that drives two cars and heats or cools a home year-round can easily save $150 to $300 per month on energy and fuel alone by living in a low-cost state. Groceries show smaller variation, but staples like ground beef, milk, and bread still cost less in regions with lower overall price levels.
What the Index Doesn’t Tell You
A cost-of-living index is a useful starting point, but it measures averages across an entire state. Within any state, costs can swing wildly depending on whether you live in a metro area or a rural town. Oklahoma City and Tulsa are more expensive than small towns in western Oklahoma, just as Nashville pushes Tennessee’s average higher than what you’d find in smaller communities.
The index also doesn’t account for wages. Mississippi may be the second-cheapest state, but its median household income is among the lowest in the country. The real question isn’t just “how cheap is it to live here?” but “how much money will I have left over after paying for everything?” If you’re bringing a remote-work salary from a higher-cost market, these affordable states can feel like a windfall. If you’re job-hunting locally, research the typical pay for your field in that area before making a move.
Healthcare access, school quality, job market depth, and climate are all factors that a single number can’t capture. A state with rock-bottom housing costs but limited healthcare facilities or a thin job market in your industry could end up costing you more in the long run through longer commutes, out-of-pocket medical expenses, or stalled career growth.
Making the Move Work Financially
If you’re seriously considering a relocation to one of these states, start by comparing your current monthly budget line by line against what those same expenses would look like in your target city or town. Online cost-of-living calculators let you plug in two locations and see the difference broken out by housing, food, transportation, and healthcare.
Factor in the cost of the move itself. A long-distance move with professional movers typically runs $2,000 to $5,000 depending on distance and the size of your household. If you’re renting, you’ll need a security deposit and first month’s rent. If you’re buying, closing costs in most states range from 2% to 5% of the home’s purchase price.
Finally, check your income picture before you commit. If your employer will let you keep your current salary while working remotely, relocating to a state with an index in the mid-80s is one of the fastest ways to effectively give yourself a raise without changing jobs. If you need local employment, compare the salary data for your occupation in that state against the cost savings. The math works out well for many people, but it’s worth running the numbers with your specific situation rather than relying on state-level averages alone.