Cheapest States To Live In 2025

It's not about how much money you make but how much you can keep.

This simple truth rings particularly true when it comes to choosing a place to live.

Finding an affordable home isn't just about lower rent or cheaper housing costs—it's about managing your expenses while still enjoying a high quality of life.

In 2025, the cost of living in the U.S. will fluctuate due to inflation and other factors, but certain states will be out as affordable places to live without sacrificing comfort or amenities.

For example, did you know that the cost of living in West Virginia is 15% lower than the national average?

The state's housing prices are extremely budget-friendly, with the median home price sitting at just $256,800.

Compare that to California, where the median home price exceeds $700,000, and it’s clear why many people are seeking a change.

Additionally, Mississippi, one of the cheapest states to live in in 2025, has an annual cost of living of around $32,336—significantly lower than the national average.

If you're considering relocating for a more affordable lifestyle, knowing which states offer the best low-cost living can save you thousands each year.

As we get into the best states for affordable living 2025, we'll explore the cheapest states to retire in 2025, low-cost-of-living states 2025, and affordable places to live in 2025.

We will give you all the details you need to make an informed decision for your future.

West Virginia

West Virginia stands out as the most affordable state in the U.S.

With a cost of living index of 84.3, it's significantly below the national average.

Housing is particularly inexpensive, with a median home price of $256,800.

Utilities and transportation costs are also below the national average, which makes it an attractive option for those seeking affordability.

Mississippi

Mississippi offers a low cost of living, with residents spending an average of $32,336 annually on essential expenses.

Housing costs are notably affordable, with a median home price of $157,800.

However, it's important to consider that Mississippi faces challenges such as higher poverty rates and educational disparities.

Arkansas

Arkansas provides a reasonable cost of living, with a median home price of $256,800.

Housing and tax rates are favorable, contributing to its affordability.

However, residents may face higher gasoline and energy costs, which can impact monthly budgets.

Oklahoma

Oklahoma boasts a cost of living index of 85.3, with groceries, utilities, and transportation all below the national average.

The median home price is $245,000, making housing affordable.

However, healthcare costs are higher than average, which is an important consideration for potential residents. 

Alabama

Alabama offers a low cost of living, with a median home price of $282,300.

Housing costs are below the national average, and utilities and transportation are reasonably priced.

However, the state faces challenges such as high poverty rates and educational disparities.

Kansas

Kansas provides a reasonable cost of living, with a median home price of $278,600.

Housing is affordable, and groceries and utilities are slightly below the national average.

The state offers a blend of urban and rural living, with larger cities like Kansas City providing cultural attractions and job opportunities.

Indiana

Indiana offers a cost of living index of 90.3, with affordable housing and a median home price of $264,400.

Groceries, utilities, and transportation are reasonably priced.

The state provides a mix of urban and rural living, with cities like Indianapolis offering cultural attractions and job opportunities.

Iowa

Iowa provides a cost of living index of 89.1, with affordable housing and a median home price of $237,300.

Groceries and utilities are below the national average, while healthcare and transportation are on par.

Known for its strong sense of community and excellent public schools, Iowa also has a low poverty rate.

Missouri

Missouri offers a cost of living index of 88.6, with a housing index of 77 and a median home price of $256,300.

Groceries and utilities are close to the national average, while transportation costs are slightly lower.

The state offers a blend of urban and rural living, with larger cities like St. Louis and Kansas City providing cultural attractions and job opportunities.

Georgia

Georgia offers a cost of living index of 88.8, with a median home price of $245,900.

Housing costs are 25% lower than the national average, making it an affordable place to live.

The state also benefits from low taxes, and non-taxable social security income makes it one of the most tax-friendly states for retirees.

How to Choose the Best State for You

Personal preferences will play a significant role in deciding on the best states for the low cost of living in 2025.

Consider:

Lifestyle Priorities

Are you looking for a quiet, rural lifestyle, or do you prefer an urban environment with lots of activities?

Cities like Kansas City (Missouri) offer affordability with an urban lifestyle, while rural areas in Arkansas may provide peace and quiet at a much lower cost.

Family Considerations

If you’re moving with family, consider factors like public schools, child-friendly communities, and the availability of family-focused activities.

States like Indiana are known for their family-friendly environments and low costs.

Retirement Options

If you are nearing retirement, you may want to focus on the cheapest states to retire in 2025.

States like West Virginia or Mississippi are budget-friendly but always weigh in on the availability of amenities, healthcare, and retirement incentives.

Factors Influencing Cost of Living

When evaluating the cost of living in these states, it's essential to consider various factors:

Housing Costs: This includes mortgage payments or rent.

For instance, West Virginia's median home price is $256,800, making it more affordable compared to states like California, where the median home price is significantly higher.

Utilities: Monthly expenses for electricity, heating, cooling, water, and garbage.

States like Louisiana have lower energy costs, with heating expenses at 11.50 cents per kilowatt-hour.

Transportation: Costs related to owning and operating a vehicle, including gas prices and maintenance.

Mississippi, for example, has low transportation costs, contributing to its overall affordability.

Healthcare: Medical expenses, including insurance premiums, doctor visits, and hospital stays.

Oklahoma, while affordable in other areas, has higher healthcare costs compared to some other states.

Groceries: Food prices can vary significantly between states.

For example, Arkansas has affordable grocery prices, contributing to its overall low cost of living.

Considerations Beyond Cost

While affordability is a significant factor, other aspects should also be considered when choosing a state to live in.

After all, living in a cheaper state doesn't mean much if it lacks the necessary amenities or lifestyle you desire.

Here are some things to keep in mind:

Quality of Life: States like Iowa and Indiana have great quality of life, with excellent schools, healthcare systems, and low crime rates. However, states with low costs of living may sometimes lack cultural attractions or big-city amenities.

Employment Opportunities: Some of the cheapest states to retire in 2025, like West Virginia, may have fewer job prospects or slower economic growth. On the other hand, larger cities in affordable states like Georgia or Missouri provide better job opportunities.

Healthcare Access: If you're considering affordable places to live in 2025, check the state’s healthcare options.

Taxes: Different states have different tax structures, which can impact your overall living costs. For example, Alabama has lower property taxes, but Oklahoma offers tax incentives for retirees.

Cost of Living - How These States Offer Big Savings in 2025

When you're looking at the cheapest states to live in 2025, it is compulsory to understand the cost of living in these states.

It's not just about rent or housing costs—multiple factors contribute to monthly spending.

Let’s break down the main aspects of the cost of living so you can get the full picture of why these states are such great options for saving money in 2025.

Housing Costs

Let’s start with the big one: housing.

For most people, housing is the largest monthly expense.

Housing costs are much lower than the national average in affordable states like West Virginia, Mississippi, and Arkansas.

For instance, the median home price in West Virginia is just $256,800—about 35% less than the national average.

This means you could save a lot in these states if you're looking to buy a home.

Here’s a quick comparison of median home prices across some of the most affordable states in 2025:

Groceries and Food Costs

Another major part of the cost of living is groceries.

States like Mississippi and West Virginia consistently report lower grocery costs than places like California or New York.

For example, the average monthly grocery bill for a single person in West Virginia is about $280, while in states like California, it could easily be $400 or more.

Utilities

Utilities, including electricity, heating, cooling, water, and garbage, can sometimes be an overlooked cost.

However, it’s a major factor in your overall monthly expenses.

States like Louisiana and West Virginia are known for having relatively low utility costs compared to other areas in the U.S.

In states like West Virginia, you’ll pay around $140 a month for utilities. On the other hand, states like California could see utility bills over $200 per month due to extreme weather and high energy demands.

Transportation Costs

Gas prices, car insurance, and maintenance fees can add up quickly.

Fortunately, many of the affordable states to live in 2025 have lower transportation costs.

For example, Mississippi and West Virginia have cheaper gas prices, and public transportation is less expensive in most smaller cities compared to larger metropolitan areas.

Healthcare Costs

Healthcare can be one of the most unpredictable expenses in your budget.

Affordable states to retire in 2025, like West Virginia and Mississippi, tend to have lower healthcare premiums and medical expenses compared to more expensive states like California or New York.

On average, the monthly healthcare cost for a single person in West Virginia is about $350, which is much lower than the national average.

Taxes

Some of the best states for affordable living in 2025, like Mississippi, Alabama, and West Virginia, have lower state income taxes, which can significantly reduce your yearly tax burden.

For instance, Mississippi has one of the lowest property tax rates in the country at just 0.80%. Alabama also offers lower-than-average property taxes and exemptions for certain retirement income.