The 5 Cheapest States to Live in America Right Now

The cost of living continues to climb in the United States. Americans find it harder and harder to make ends meet, with many even attempting to find new jobs to pay their bills.

According to a survey by Bankrate.com, about 56% of Americans admitted they were looking for a new job in 2022. Yet for some, the answer to their financial woes has been even more dramatic. Packing up, and moving states.

In just 2022 alone, 26 states experienced a massive influx of people, with 25 states experience those migrating out of the state, according to date from the U.S. Census Bureau.

So what do these Americans know that perhaps we don't?

Cost of Living Index

If you're an American considering moving to another state, there is a lot to consider before packing up your things. The cost of living is one way to measure which state could be the best suited for you. When it comes down to the cost of living, this would take into account everything that you will eventually need to plan for and purchase once you're in your new state.

According to the World Population Review, the cost of living is the basic amount needed by individuals to cover the basic expenses of life. This would include food, shelter, transportation and healthcare. Yet these costs can vary widely depending on where you live. Furthermore, cost of living doesn't include other payments, such as which states charge taxes, and which don't.

So when we consider the top states to move to and look at the cost of living, we first need a baseline. This would be the average cost of living across the United States, with a baseline set at 100. Therefore, states that would have a lower cost of living would be under 100, with those above the national average coming in higher than 100 on the cost of living index.

Focusing on housing

Now it might be affordable to live somewhere when it comes to paying taxes, buying groceries, and even driving to work. But this can all change once you look at how much it costs to rent or buy a home. 

This can be the biggest factor when Americans decide to buy a home, and the cost of purchasing one is only rising. According to the Federal Reserve Bank of St. Louis, the first quarter of 2023 found home prices hit an average of $516,600. So again, if you're hoping to live somewhere on the cheap, you're going to want to find a state with homes coming in below this amount.

Then there's making money!

Not only are you going to look to decrease costs by moving states, you also need to make money. That's why another factor to consider before moving, is what states offer a good salary, and what are the opportunities like in these new states? Again, you'll want to look at the average national salary to see if you can make a bit higher. According to ZipRecruiter (ZIP), the national average salary currently sits at $42,968, or $21 per hour. Yet 25% of Americans make under $28,000 per year, with only 10% making above $62,500, based on the website's data.

So now that we know how much we'll want to make, how little we want to spend, and how much a home might cost, what are the top five cheapest states for Americans to consider right now?

The Big 5

Now comes the fun part. After running through the cost of living index, average home cost, and average salary for Americans, as well as the average state-wide income tax, we can come up with a list of the top five states Americans may want to consider moving to in 2023. 

Of course not every state entered the top five positions cleanly. Here we had to average out the best bang for your buck. So while one place may have been more affordable, it could be that there are higher taxes, for example. With all that taken into consideration, here is what we found as the top five.

Using data collected from the World Population Review, Redfin (RDFN), ZipRecruiter, and the Tax Foundation, we can therefore see which states averaged out to be the cheapest places to live! Now granted, you'll notice that each of these states have salaries that fall below the national average. However, take into consideration that the average home cost is far below the national average by about half! Further, that the cost of living is well below the average, with income tax rates all around 5%. All considered, these are certainly the cheapest - if not the best - states for Americans to live in for 2023.