Cheapest State to Live In: Where Your Dollar Goes Farthest

If you want to keep more cash in your pocket, picking the right state can completely flip your finances. Almost every year, one state keeps landing at the top of the 'cheapest to live' lists: Mississippi. Not what you expected? Hear me out—it consistently has the lowest cost of living index in the country, sometimes scoring nearly 15% below the national average.

Want hard numbers? Average rent for a one-bedroom in Jackson barely hits $800. Groceries, gas, and basic services all run cheaper than you’ll find up north or out west. Even my own Luna—cat food and care cost less in Mississippi than in bigger cities. Every dollar stretches a little further here, especially on housing.

Bills like property taxes, utilities, and health care come in lower, too. That means you don’t just save on rent—you see it every time you check your bank account. But, as you’ll see next, it’s not just about the sticker price. There are plenty more details to figure out to make sure it’s the right move for you.

• The Surprising Winner: Which State Tops the Cheap List?
• What Makes It So Affordable?
• City Life vs Small Towns: Where’s the Real Bargain?
• Housing Hacks: Renting and Buying for Less
• Hidden Costs You Should Know
• Tips for Relocating Without Regrets

The Surprising Winner: Which State Tops the Cheap List?

If you’ve been thinking Texas, Kentucky, or Oklahoma, think again. Mississippi takes the crown as the cheapest state to live in. This isn’t just a fluke—year after year, major sources like the U.S. Bureau of Economic Analysis and CNBC’s annual studies put Mississippi at the front of the pack for low living costs.

So, what pushes Mississippi to the top? It’s the only state where the overall cost of living index regularly dips about 15% below the U.S. average. That means your paycheck goes much further than in just about any other state. Everything from rent and household bills to groceries and gas costs less. The median home price sits close to $170,000 for 2025—compare that to a place like Colorado, where you’re lucky to get anything under $440,000.

Mississippi’s unemployment rate sits a shade lower than a lot of the other Southern states, sitting at about 3.2%. The state also has some of the lowest property taxes and utility rates in America—which really matters once you start paying the bills every month.

Fun fact: the city of Hattiesburg often lands on national lists for “best cheap cities to live in.” Folks there regularly report rent for a two-bedroom apartment for less than $950. Even buying lunch in town usually costs a couple bucks less than what you’d pay in Atlanta or Dallas. It adds up surprisingly fast.

Of course, this isn’t to say life in Mississippi is all rainbows. The state has lower average incomes than some others, and you definitely won’t find tech jobs around every corner. But pure cost of living? Mississippi’s got it locked down for anyone needing to make every dollar count.

What Makes It So Affordable?

When you look at why Mississippi is repeatedly called the cheapest state to live in, you see it's not just hype—it’s the numbers talking. Mississippi’s housing market has some of the lowest median home prices in the country, usually hovering around $170,000. Low property taxes and less competition for rentals keep costs manageable, even in bigger cities.

The state’s lower-than-average wages mean businesses have to keep prices friendly, from groceries to mechanic shops. A pack of milk and bread at the store costs less, gas hovers well below $4 a gallon, and a night out for barbecue rarely burns a hole in your wallet.

"Mississippi residents pay 12% less for goods and services compared to the national average," says a 2024 CNBC analysis on cost of living in America.

Utilities are no joke here—thanks to mild winters, heating bills won’t spike like they do up north. Health care and school fees sit on the lower end too.

Take a look at some real numbers for basic monthly expenses:

On top of all this, Mississippi hasn’t seen the wild rent spikes or housing shortages you hear about in places like Texas or Florida. Of course, having some of the shortest commutes in the U.S. also saves you time and money on gas and car repairs.

If you’re moving with family—or pets like Luna—day-to-day stuff simply costs less, so you never feel squeezed just getting by. This basket of lower expenses is what makes life here easier on anyone’s budget.

City Life vs Small Towns: Where’s the Real Bargain?

In Mississippi, your dollar gets you a totally different life depending on whether you pick a city or aim for a small town. Most folks immediately think city life means higher prices everywhere. That’s true in the fancier parts of Jackson, but it’s not the full story. Even in the capital, costs are impressively low if you know which neighborhoods to look at. In fact, the cheapest state isn’t just affordable in small towns.

Take a look at these typical monthly rent prices (spring 2025):

Living in Jackson, you get the convenience of public transit, bigger hospitals, and more stuff to do on weekends. But if you drive an hour out to a place like Yazoo City, you’ll pay a lot less for nearly everything—rent, groceries, even water bills. Smaller towns don't just hand you savings on housing. Insurance rates, food costs, and even a haircut will run you less.

If you need some perspective, the U.S. Bureau of Economic Analysis says urban Mississippi rents are still under half of what folks pay in coastal big cities like Boston or Seattle. With that in mind, you could even afford a two-bedroom in many Mississippi towns for what a closet-sized studio goes for in LA.

“People looking for affordable living don’t have to worry about missing out on amenities if they stick with Mississippi’s smaller cities. The savings are real—and you still get plenty of comforts,” says Brandi Smith, a regional housing analyst at Southern Economics Group.

So which should you pick? Here are some questions to nail down your fit:

• Do you mind driving further for big stores or work?
• Does having lots of restaurants or events close by matter to you?
• Are fast internet or newer schools must-haves?
• Is a slower pace of life a big plus?

The takeaway: you’ll see major deals in both city life and smaller towns, but if you’re ultra price-sensitive, those little places away from the main highways are where the real bargains hide. Just make sure you’ll be comfortable with the trade-offs before signing any lease.

Housing Hacks: Renting and Buying for Less

Let’s get down to what you really care about: getting a roof over your head without emptying your wallet. In Mississippi, it’s not just talk—the numbers are super friendly for both renters and buyers. For example, the median home price in 2025 is hovering around $168,000. Compare that with the U.S. average of about $392,000. That means you can realistically buy a solid house here for less than half what it’d cost almost anywhere else.

If you’re renting, things look just as good. Mississippi’s average rent for a one-bedroom apartment hangs out near $800 per month, with smaller towns like Tupelo or Meridian often under $700. That’s a huge chunk less compared to similar places in most states.

There are some things you can do to slash costs even further. Here’s a quick starter list:

• Look for apartments or homes managed by local owners—big management companies sometimes charge higher fees.
• Check out listings in smaller towns or just outside city limits for even lower prices.
• Ask locals or join Mississippi housing Facebook groups for leads that aren’t posted everywhere.
• If you’re buying, FHA loans are popular here and often need as little as 3.5% down.
• Home inspections are cheap (usually under $400), so don’t skip that step—it might save you thousands.

Here’s a quick comparison to show just how much cheaper things are:

Don’t just take my word for it. According to Emily Stewart, a housing analyst for U.S. News & World Report,

"Mississippi remains one of the most affordable places to both rent and own property in 2025. Residents spend less of their income on housing compared to anywhere else in the nation."

So if you want to live in the cheapest state and still have money left over for takeout, pet toys, or a rainy day, it’s hard to beat what Mississippi has to offer. Just be smart and dig up those local leads—sometimes the really good deals never make it to the big rental websites.

Hidden Costs You Should Know

Living in the cheapest state sounds good, but you’ve got to watch for costs that sneak up on you. Sure, Mississippi’s rent and groceries are cheap, but there’s more to it than just big savings at the register. Let’s break down where your budget might take an unexpected hit.

First up: health care. Even though average health insurance premiums in Mississippi are around $455/month for a middle-aged adult, the quality of care and access to specialists can be lower, especially in rural areas. This means you might travel farther for appointments or pay more for certain medications than expected.

Then there’s insurance—both car and home. Mississippi sees a lot of storms and flooding. Home insurance here is about $2,150 per year on average, one of the highest in the U.S. Car insurance, at around $1,780 yearly, isn’t the cheapest either. So, while your house might cost less, protecting it comes with a price tag.

Utilities deserve a mention. Sure, winter heating is mild, but those humid, long summers mean cranking the AC. The average electric bill can run over $140/month, compared to the national average of about $122. If you’re used to cooler climates, the first summer can be a shock—both physically and on your wallet.

Tornadoes and hurricanes aren’t a joke here, so look into disaster prep. You might have to pay extra for flood insurance, which clocks in around $900 a year for at-risk homes. Internet speed and access aren’t great in every town either. In small communities, you could pay more for slower connections, and that’s a dealbreaker if you work from home.

If you’re moving kids, check out school ratings since some rural districts don’t have as many resources. And if you love dining out or want loads of entertainment options, you might not find as many choices as in larger states, so you could end up driving more—adding to your gas bills.

So, living in the cheapest state works if you plan for these extra costs. Run the numbers before you move—what looks cheap up front sometimes isn’t the full story.

Tips for Relocating Without Regrets

Thinking about packing up and heading to the cheapest state isn’t just about cheap rent—it’s about making sure you actually like where you land. Before signing a lease or buying a one-way ticket, here’s how to keep surprises from slapping you in the face.

• Visit First: Don’t just trust internet lists. Spend a few days in the area you want to move to. Walk the neighborhoods, eat at a local diner, hit up a grocery store. Get a real feel for the pace and people.
• Crunch the Numbers: It’s not just rent—think about utilities, food, gas, and random stuff. Mississippi’s average utility bill is about $142 per month, compared to $177 nationally. That $35 difference adds up over a year.
• Check Healthcare & Services: Some places have fewer hospitals or longer wait times to see a doctor. Make sure your go-to pharmacies and clinics are nearby.
• Work Situation: If you’re bringing your job or working remote, nice. If not, check what kinds of jobs are actually available. Wages in Mississippi can be lower than the national average, so plan accordingly.
• Weather Reality Check: Mississippi summers are no joke—expect humidity and lots of heat. If you’re coming from somewhere cool, don’t underestimate this.
• Know the Moving Costs: Even a “cheap” move can bite. According to U-Haul’s 2024 stats, moving a 2-bedroom apartment from Chicago to Jackson costs around $1,400 in summer. Always pad your budget.

Here’s a quick peek at average monthly costs in Mississippi versus the U.S. average (all numbers from 2024):

One last tip—don’t rush. Find local online groups or Facebook pages to ask current residents what to expect, and if you have pets (like my Luna), check pet policies at your new place ahead of time. Relocating can be awesome when you’re prepared, but it’s way less fun winging it and getting stuck with something you didn’t expect.