Cheapest State To Live In

Oklahoma, one of the cheapest states to live inAs a followup to the recent post Cheapest Places To live I thought it would be appropriate to look at little more in depth at the list I published that showed the Cheapest State to Live In to get a better grasp of what makes these states cheap and if they are suitable for someone looking to relocate.

The list created by Missouri Economic Research and Information Center put Oklahoma, Texas and Tennessee as the 3 most affordable states so we’ll take a look at some of the individual factors for these 3 states.

What factors should we be looking at to determine the Cheapest State To live In?

Sadly it’s no easy easy as saying, State A has costs X amount of dollars less to live in than state B. If you have a specialised job then it may be worth your while living in an expensive state where you can get better pay. This could work for things like the cost of health care too, if you have an illness that needs regular treatment. So for the 3 states mentioned I think we need to look at a cross section of things like housing costs, minimum wage, tax and insurance costs. I won’t look at crime in this post but social issues and living standards are also very important for you to look at.

Cost of buying a home has a fantastic and highly in depth study to housing affordability throughout the United States. It is updated yearly and is an absolute must read for anyone considering relocation.

In their last study for 2009 data collected in the 3rd quarter of 2008 suggests that Youngstown, OH-PA, Fort Wayne, IN and Evansville, IN-KY are actually the 3 most affordable places for housing. This contradicts the overall list of Cheapest State To Live In data that we are studying but places from all 3 states do make it to the list.

According to this study anything with a rating of under 3.0 is very affordable. They have not exactly defined very affordable but I think it would be fair to assume this means that a family living on average or slightly below average income could afford to live in housing of these costs.

For Oklahoma, Fort Smith appears at no5 with a rating of 2.1.

For Texas, Kileen appears at no17 with a rating of 2.3

For Tennessee, Clarksville is at no12 with a rathing of 2.2

These towns in all 3 states appear well under the 3.0 affordability threshold suggesting that they are very affordable. Taking a quick look at the cost of buying a 3 bed home all 3 States look like they have nice 3bed properties available for under $175k. I saw some good looking 3bed properties closer to the $100k mark in Fort Smith.

Taxes, Possibly the most important when considering the cheapest state to live In!

Our earnings can really be eaten up by taxes. If you live in a state with high taxes are are only getting a medium wage, or less, then no matter how affordable everything else is you may well struggle.

Tennessee immediately looks promising from a tax perspective as they only charge income tax (the big killer!) on interest and dividends and Texas has NO income tax! This means that some other things may be taxed a bit higher so you can judge a bit better based on an overall tax burden figure.

According to here are the tax burdens for our 3 states (The average for USA is 9.7%):

Oklahoma = 9.8%

Texas = 8.4%

Tennessee = 8.3%

Minimum Wage and Income

The average per capita income for these Tennessee and Oklahoma is around $38k with Texas being a little higher at $42k. But more importantly is minimum wages. According to Wikipedia minimum wages in each of the states were as follows (Federal Minimum $7.25 per hour):

Oklahoma = $7.25

Texas = $7.25

Tennessee = $7.25

I knew this was coming! It figures that cheap taxes and house means one thing…. cheap wages. However the idea is you should be able to survive on the min wage (just about). There are plenty of other states carrying low minimum wages but with much higher housing and tax costs.


I’m British so the idea of paying insurance for medical bills makes me cringe…. but it’s a face of life in USA so it has to be taken into consideration. Also vehicle insurance is important as owning a car is very almost essential in USA (from my experience).

The average cost of Health Insurance per worker for each State according to for August/September 2009 were:

Oklahoma = $11,749 ($12,721 ($3,842 paid by worker, $7,907 paid by employer).

Texas = $12,721 ($4,122 paid by worker, $8,599 paid by employer).

Tennessee = $13,077 ($3,583 paid by worker, $9,494 paid by employer).

The average cost of Combined Premium Auto Insurance for each State according to are:

Oklahoma = $846.5

Texas = $945.5

Tennessee = $787.7

And the winner for cheapest State to live in is…

Ok it’s not exactly easy to choose “the cheapest state to live in” but just looking at straight figures Tennessee seems to come out on top with low housing costs, low insurance and low tax. If you blog or do an online job then this is great. However the low local wage (like the other two states) and th possibility that your industry may not have many jobs there means that it warrants more research.

I have not factored in any other really really important things, like the cost of beer (he he), how much food is and the general standard of living.

So this is where you guys come in? What do you think? Do you live in any of these states and how is it? Anything else to add, or just wanna say hi then please leave a comment.

Thanks for reading,


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Hey, I'm Forest, owner and writer at I used to be a graphic designer but now I travel a fair bit and blog for a living. I love all the standard other stuff such as movies, music and socialising :).

49 thoughts on “Cheapest State To Live In”

  1. I am totally disgusted with living in the state of NY. The cost of homes is out of this world, you pay taxes on everything that exists, even food from the grocery store. I got into a car accident -the guy hit me ,but I had to pay almost $700.- to the villiage plus $750.- over a period of 3 years. The rich get richer while the rest of us fill their pockets.

    1. I have spent a fair amount of time in Neighboring Vermont and can say it’s the same there…. New England is definitely not for people who want to save cash! I have been hearing good things about Texas and will be writing a post based on some readers emails very soon.

  2. My wife and I just moved from Tennessee to Texas because the job market in Tennessee fell apart.

    Tennessee is by far a more cheaper place to live in reguards to two things, Car Insurance and Utilities.

    Everything else, Texas has Tennessee beat with exceptions to seasons, I do miss seasons and snow..

    1. Ha ha, I am in Cairo right now so I know all about missing seasons…. Oh what I would do for a drop of rain right now!!!! Snow….. I’d probably dance naked on top of Cairo Tower if it would bring some snow!!! It’s damn hot here!

      I have met a lot of Texans here who say it’s similar climate.

      Thanks for your comment.

  3. Nice research! I have always thought that the low cost, low income states might be ideal for retired people on fixed income. Even certain counties within states might be an option, especially those who have lost a major industry. is a nice site to be able to check housing prices throughout the country.
    Carol@inthetrenches recently posted..Success Stories Round upMy Profile

    1. Thanks again Carol. Yes fixed income really makes it easier to choose but can also be why some places end up being only old folks! Places like Detroit are becoming very cheap these days which is sad but it could also lead to it’s revival.

  4. Time to quit, leave, drop, everything and live off the land, figure shelter and water, stay warm in the winter, find a colony and LIVE, not pay the government to live. more time with your family, no phones, no tv, no boss screaming at you, raise your garden, shoot and trap your food, not worry about eviction

    1. Hey Bill, well that is the extreme but I can really raise my hat to you if you can do it. I love hearing stories of people who do this!

  5. I agree with Bill, its time and we should have been doing that along time ago. Although most of us are spoiled with all the sweet luxuries of life.
    Does anyone know if any other states have to pay taxes twice a year like we do here in NY (which is a shameful state)? Just couldn’t imagine only paying taxes once a year. Where could I find this info. Hey by the way love your site !!

    1. Wow twice a year, that’s a real pain! I would just try typing states that you pay tax twice a year into Google and I am sure you will find some info.

      Thanks for the compliment on the site, please do come back and comment soon :).

  6. Twice a year? I have never heard of that.That sucks. Doing it once is bad enough. Though if I got a refund both times I wouldn’t complain.

    It is tough finding a place to live that is affordable AND has lots of employment opportunities. I have been finding that the lower the cost of living, the higher the unemployment rate. Unless you have a job where you can work from home and take with you wherever you live, it’s gonna be tough. My second job is from home but it’s only part time. Not enough to sustain me on it’s own.

    1. Sadly that is often the case about low wages and low costs….. Working hard to find decent mobile jobs is always a possible fix for this.

  7. I live in Lockport NY, Our property tax rate is 51.00 per 1,000 of your assessments. IE a 100,000 dollar home your tax bill is 5,100. Our sales tax is at 8.75%. The cities water and sewer bills average 50.00 a mount for homeowners. the job market is a joke. Because taxes are so high no company in there rite mind wants to move here to conduct any business. We are in our thirties and have no hope for the future. The American dream is no longer attainable for the average hard workers.

    1. Hey Joe, that sounds really sad :(. The activity of USA seems to be moving South but these cycles happen over time and the North will shine again eventually. Just maybe not for a while. Have you considered moving?

      1. Yes however unfortunate that we have to leave behind friends and family for a better quality of life. We are looking at the best states and cities that give us the best chance to attain our goals.

        1. Always sad Joe :(. Have to what is best for your life though and the net and easy travel means it’s easier than it used to be.

  8. I have read this posting with great interest. I moved from San Diego, California 8 years ago and relocated to Charleston, South Carolina. Prior to San Diego, I was living in Norfolk, Virginia and before that Orlando, Florida. Out of all the places that I have lived, I have never been happier than I am in Charleston. This is a relatively small city. We have approximately 300,000 total residents in the area. The State Income Tax for the majority of 30+ K crowd is 7%. We have the cheapest taxes on gasoline and we have a fairly great number of skilled jobs available. Now Boeing is in the process of building their new Dream Liner plant which promises to bring an additional 50,000 jobs. I think you all might not go to far off with checking out South Carolina. The weather is hot and humid in the summer, but the spring and the fall are absolutely gorgeous (Generally very mild winters, doesn’t snow here). For all of you who love the outdoors, beachs and animal life, we have everything you could want, except skiing or snow for that matter. After one summer, I am used to the summers. Property tax on my four bedroom, two and half bath brick home on 1/3 acre in a beautiful quiet neighborhood was $975 last year (2009 tax was $948). I purchased my home in 2005 for $225k, it is valued around $200k now. I would never move back to California or Virginia. I am actually saving money for retirement outside of my 401k and IRA’s. Now is the greatest time ever to buy a home here, the interest rates are incredible and the housing prices are down right now, but when Boeing starts operation and the employees all show up, the prices will probably start going up. Everyone says that the school systems are bad here, but that depends on where you live. Besides, you can really afford a high quality private school to send your children to that would give them a huge boost in college. For all of you that live in a high dollar city that gives most of your hard earned taxes to the corrupt politicians and their brother-in-laws or people that are perpetually unemployed, you may want to research Charleston. When my friends flew out from East Los Angeles and saw what I have here on a single income, they are in the process of planning their move. Come down for a visit and check it out. It was a big culture shock (coming from liberal San Diego), but I have grown to love it more than anywhere else I have lived.

    1. Hi Freddy, Charleston sounds like a charming place and the prices seem very reasonable. I think there are many great places outside of the major major cities around the USA and with the emergence of tech based jobs which rely more on computer workstations rather than large factories people will be spreading around a lot more.

      The bowing plant does sound like a great way to give the town extra energy.

      I have always wanted to visit San Diego because it’s supposed to be amazing but have always been warned about the price of everything there!

    2. Freddy, I was just in Charleston in April 2010 for a visit. It was my first time there and I really was impressed. I currently live in Anchorage, AK and love the mountains, but the draw to Charleston for me was the warmer weather and that fact you could actually go into the ocean, LOL. What area of Charleston do you live in, and what are the places to avoid? My wife and I are thinking of buying another place when and if the housing market will allow us to sell our second home up here.

  9. I lived in east TN for awhile and I have close relatives in middle and west TN, so I consider myself somewhat knowledgeable about the state. Home prices are reasonable considering the high priced homes in other states. However, I live in the Atlanta area now and we paid about the same price for our house here than what we sold a comparable home for in TN. In TN our property taxes were low—around $800 compared to $2800 in GA. That’s a big difference, however the schools here are amazing. I was amazed at the difference. Also, the parks here are wonderful. Other county services are great as well and we are surrounded by all kinds of shopping, entertainment, and educational opportunities. The $2000 difference is worth it. My relatives in TN have comparable homes to mine and again, the only difference is the property taxes. Some also have to drive 1 hour for decent shopping. TN has 9% sales tax compared to 6.5% in GA. I feel like you get what you pay for and cheap is not always to best option. TN is a beautiful state though, so please don’t take this as a put-down! I just had to point out some things to think about.

    1. Yes, Eastern Tennessee is a beautiful place. I was out there also in May 2011 travelling around checking the SE out as a possible place to buy another home. I also liked the Atlanta area also, not to mention Charleston, SC. Hope God grants me the wisdom to figure out where I want to buy a place when the housing market gets better.

  10. In todays globle economy, and the rise in technology with computers, there should be more opportunitys for work at home jobs, to bring back the american dream, I often wonder if it truly exist out there, If I could work at home, then my situation would greatly improve, and also if more people are able to work online then maybe, the cost of fuel will go down, and less traffic, and less stress to get around town, and also driving in bad weather to get to work, there must be a better way to survive as the world turns in this jobless existance, Oregon state

    1. Hi John, I work online and must say for the most part I love it. As it becomes the norm though I am worried about all the social interaction between colleagues that is being lost. I miss having work mates at times!

  11. Forest,

    Love your site. Very informative. I have just been feeling like just getting away. Have lived in Indiana all my life and don’t really have a problem with it, but just feel like uprooting my family and trying something different.

    1. Thanks Lana, ha ha sometimes a change of scene and scenery can be a good thing. Good luck!

      Red another commenter was actually looking for info on Indiana (Rockville and Putnam county areas), maybe you can give us some help?

    1. I have been through that area on my way to and from Indianapolis from my home state of Illinois. Supposedly Indianapolis is one of the better cities to move to now, so I would assume the area west of there isn’t bad either. The only thing is, I personally don’t think I could live in the Midwest again since being in Alaska so long. Lana, if you can take a little longer winters, come on up here, but please try to find a job before you do, as it is a long way up here.

  12. I am leaving active duty military service in about 12 months and plan on using the GI Bill to go to college to become a registered nurse. I have been saving up my money for a while now and was hoping someone could lead me in the right direction as to a State where I should look into for both schooling and living in once I get my RN. I used to live in NJ but I don’t want to go back there because it is so expensive there. I was looking at NC because it is where I have been stationed at for the past few years and I like the weather and the schools seem promising. I appreciate any and all help, you can email me

    1. Hey Feliciano, that is awesome and sounds like a good career move. I honestly don’t know where is best for doing such a thing but Texas seems to keep popping up for everything if you can bear the summer heat.

  13. It would be nice to have some kind of state services efficiency rating. That is, what do you get for the taxes? If you pay more but it goes to good schools, you may regard that as a benefit if you have kids. And how good is the state at delivering services for the money collected? For example, what is the high school graduation rate as compared to per pupil expenditure?

    Another consideration is intrinsic costs. For example, heating is probably going to cost more in Alaska. Shipment of goods is going to cost more in Hawaii.

    I have not seen any tabulation showing these kinds of comparisons

    1. Hey Macinac, that kind of data would be great. It would be pretty hard to put together, I am just one man here so I don’t think I have the resources but I am sure a gov agency or even a private company could benefit from making such a thing.

  14. Forget Massachusetts. While not a lot we make 65k live in a fixer up house that we can’t afford to fix up. Add up gas, high heating bills (oil), food and taxes and you have to make a lot of money to do more than just get by. I was looking at houses in OK and for what my fixer upper would cost you can get a beautiful house. If I could get a job and convice my stubborn family I would leave mass asap.

  15. Every state needs taxes to pay for the various government services. However, there are significant differences in =what= they tax. For example, Washington has no income tax, while Oregon has no sales tax. So, if you could figure out who taxes what, and compare that to your own situation, you might find a good deal. (perhaps you could work in Washington and shop in Oregon)

    I know that some states tax interest and dividend income but not wages. (I think that would be New Hampshire and Tennessee.)

    Some places have no taxes on military pensions, although they do tax other kinds of income.

    1. Hey Macinac Harper, yeah it’s incredibly hard to work out exactly how much tax you will pay and different people will work out better off in different states!

  16. So what we need is a big spread sheet or some such that feeds in the various considerations. All the tax information is known, and can be fed in, but =type= of income matters (wages vs pension vs dividend vs social security etc). And then property taxes and sales taxes (and what the sales tax applies to: food? clothing? services?). And prices (gasoline costs more in California and less in Wyoming). And the things you have to do to get around local problems (like maybe private school insome of the lower cost states).

    And THEN we would be in position to make comparisons.

  17. We live in southern Ca and have sold our haome and are looking for a change. We started to look in Tn and are intrigued by the sizes of the properties, taxes and home prices. My only worry is employment. We like the area east of Memphis like Yuma and the surrounding areas. My wife and I have an idea of farming on the local level and we are both experienced in Horticulture. I have a horticulture degree and it seems to me that a local farmer with good produce and the land for raising livestock would be a benefit to the area as well as provide a modest income. Does anyone have an opinion or pros and cons of this idea in this locale? Any info would be great! JIM

    1. I don’t have a knowledge of the area Jimbo but it sounds like a great idea and I wish you the best of luck. If you remember please swing by and let us know how it is going.

  18. I also have been really interested in TN, i’ve driven through there quite a bit and having lived in alaska and florida and now currently in KS, I miss moutains and hills. So far finacially it looks like TN is the best deal for my familys situation but kinda worried about fitting in, i.e. hillbillys lol. My wife and I lived in canisteo, ny and being from the midwest i waved to a passerby just to be friendly and they acted like i was waving a gun! so any info from anybody in TN would be nice. thanks

  19. You’ll love TN. I from NC and I went to college at ETSU, some really nice folks. Every place you go is going to have “roughnecks” but I tell you life dose not get any better than the Southeast USA. I am currently living in WA state and the cost of… everything is through the roof.

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