Thursday, April 14, 2011

The Cheapest State to Live In

In previous posts we've examined some of the Best Sates to Live in but in todays down economy many people are considering a move and looking for the cheapest states to live in for strictly financial reasons. Like everything we discuss and share here on the blog there are no simple and straight forward answers or solutions. Everyone is different and everyone's circumstances are different. If you are looking for the cheapest places to live but you also need a job than lower wages could negate any positive impact from a lower cost of living. Similarly if you're retired why live in a place that has high employment and a high cost of living to go along with it? As you know we are big proponents of the Retire Abroad movement. When you're retired you've paid your dues and served your country by being productive for the past forty, fifty, sixty years. Now it's your turn to relax and enjoy life. But once again I digress!

Factors Affecting Cost of Living

As we've discussed ad nauseam there are numerous factors that will influence the cost of living in any area you choose to live.
  • Housing is probably the most obvious, and can still vary depending on if you rent or buy. So, it important to consider both. For example some parts of the country the market demand for rentals has not kept pace with the price of real estate. In some places one can rent for half of what it might cost to own.
  • Taxes are another thing many people overlook. It's important to add up both state income taxes and the local property taxes. In combination these too have a significant impact on your cost of living.
  • Daily Expenses - The price of daily use items like gas and food will also vary from state to state.
  • Employment - Employers in any given state or area will have an impact on cost of living too. In Seattle, for example, one of the biggest employers is Microsoft. People there are well paid and the market is more than happy to rise to meet and greet that disposable income. Thus Seattle ranks as one of the most expensive cities to live in. The reality is the majority of people living in Seattle do not work for Microsoft but, the high salaries there tend to inflate the overall cost of living.

The Cheapest States to Live in

Let's first take a look at the cheapest states and then narrow it down to find THE Cheapest. Generally speaking the most affordable and least expensive states to live in the U.S. tend to be in the Midwest or South. As one would expect Alaska, Hawaii, New England, and the entire West Coast from California to Washington are the most expensive states to live in America so finding the best place to live in California won't help you much.
Research that was done by the Missouri Economic Research and Info Ctr. says the 10 most affordable states are:
  1. Oklahoma
  2. Texas
  3. Tennessee
  4. Arkansas
  5. Nebraska
  6. South Dakota
  7. Missouri
  8. Kansas
  9. Georgia
  10. Mississippi
Now it's important to take into consideration the time lag between data collection and the publishing of results. Also, data can sometimes be accumulated over an extended period of time. When the economy and the world at large is stable these data bases work just fine but when we experience major shifts and changes that are sudden that data can be blown out the window in a second. A good example of this is Japan who just a few months ago was acknowledged as one of the Best Places to Live in the World. But today following the devastating Earthquake,Tsunami and nuclear crisis, Japan is likely not on anyone's radar as the 'best place to live'. The same could be said for parts of the United States. Prior to our own economic melt down the midwest and Motor City in particular where nice stable places to live and be gainfully employed in the auto industry. Today not so much. A year or so ago I wrote about the Detroit having the cheapest house in America. And when you read that list above you may want to add anywhere in the "Rustbelt" to that list of cheap places to live in America. Upstate New York including Buffalo and Rochester, Ohio, Michigan and some parts of Indiana could certainly make the list.
Oklahoma and Kansas are cheap in terms of housing and those they are decent places to live. One cold easily say they are better looking places to live as those 'Rustbelt' states look pretty rough most of the time. The downside to OK and KS is the fact they can be pretty 'ho hum' boring. The deep south sates are also cheap but wages are very low for many which leads to a lot of poverty.

The Cheapest State to Live in?

After reading this you are hopefully in agreement that picking the cheapest state to live in is still a very subjective matter - it's all in the number and the numbers you use can result in pretty much whatever you want. Just looking at figures Oklahoma is the cheapest with low housing costs, low insurance and low tax. If you're retired or have a virtual business then it may be a great state to live in. But if you're needing to combine your relocation with a new job you might want to think twice - the low local wages may just wipe out any gains you make from reducing your cost of living.

Editors note: This post about the Cheapest States to live in obviously appeared in April 2011. Be sure to check out our latest (November 2011) exploration of the Best States to Live in. We created a new series of articles exploring the country region by region, up and down and side to side to uncover the best states and what makes them great.


J.A. said...

Not one of the states listed would be on my top 10 choices. Too bad.

JadeDragoness77 said...

Arkansas is a beautiful state. Its just way too hot during the summer. I would like to live in the far north east or west states, like Washington or Maine.

MAMAT4T said...

Agree with J.A. I am doing research to see where to live, I want a change and every state that is beautiful or seems interesting is expensive. Sucks! i was hoping one of those states would be interesting but nope.

MAMAT4T said...

Agree with J.A. I want to start planning a move for when I finish school but all the beautiful and interesting places are "expensive". Sucks! I was hoping a decent choice would be on this list. I think anyone has a right to a beautiful scenery,, not just the rich.

UZI9MMAUTO said...

I want to get OUT of my state of connecticut to a more resourceful dependent area of the country. Somewhere where you $5 gets you something and s smile means something other than what are you up to? Above all where police know their place and dont rule like nazis.
Sounds like several places to some but what about NOT record high heat? Now- that's a place i'd like to move to.

PanamaMark said...

I hear you! Unfortunately it seems that is becoming more and more difficult to find in any State. That's why so many people are leaving the country. Did you known people moving abroad and renouncing their citizenship is at an all time high? It's sad.

Luv2Trvl said...

Recommend from experience Austin, TX and Chattanooga, TN which borders the state lines of TN and GA. As far as the heat goes this year, the first 6 months of 2012 has been a record breaker in many states of US and above average in other cities so this is an example of an exception.

Luv2Trvl said...

Check out Austin, TX (clean and beautiful, festivals and friendly people) and Chattanooga, TN which surrounding areas on border of GA & TN as well as the Summer Olympics in 1990's. As far as hot weather, here again is an exception to the rule, the 1st six months of 2012 has broken record or some cities above normal.

Sashman1972 said...

Did anyone proofread the page before it was posted? Unreal.

PanamaMark said...

Hey Sashman, It's just a Blog for people to comment and help each other finding and discussing cheap places to live. The intent isn't to win a Pulitzer Prize. So, lighten up - participate in a constructive way and leave something helpful.

btw - I re-read the post and although it's not the Queen's English or grammar there is plenty of good info here.

The Hungry Llama said...

South Dakota is beautiful and more interesting than people give it credit for! :D

Amy Thompson said...

Nebraska is great! I love it and its cheep! And so fun and its not too hot for me i lovd it!!!

Connor Purcell said...

Missouri is pretty awesome too...Lee's Summit (just outside of Kansas City)is great...They have a REALLY good school district. We might not have the best sports teams but everyone is awesome here in Missouri :)

debnose said...

Hmmm...Nebraska? Oklahoma? Missouri? Tennessee? Do these places need some sort of business or something? What about the beautiful New England states, they're not as expensive as New York and California? Even Florida is cheap! Where are you sending us? When you say cheap, you forget to mention the employment pay rate as well. Cheap for retirees with good pensions from a high-money making profession and state, but not for the working middle class. What is considered as cheap for the rich may be expensive for the poor. I'm in search for a small bungalow to live in, just for my little old self...don't any of these more popular and beautiful states have any 'poor sections'?

Britney Atkins said...

I am trying to find a good college and I cheap great state I can live in. Can some one help me