Top 3 Cheapest States to Live in: Affordable Places with Low Cost of Living

Everyone’s looking for a break these days, right? Rent is sky-high, groceries take up more of your paycheck than you want to admit, and don’t even get started on health insurance. But what if I told you, right now, there are places in the U.S. where you can live pretty comfortably without winning the lottery or eating ramen every night? I’m not talking about making wild changes or cramming into a shoebox apartment, either. Some states just make your dollar go further. Let’s get real about the top three cheapest states to live in – where life feels less like a hamster wheel, and more like, well, actual living.

Why Cost of Living Varies so Much State to State

One thing folks always ask me is: "How can it be that, just by crossing a state line, suddenly everything gets cheaper?" It almost sounds like a prank, but this is how America works. Cost of living isn’t just about what you pay for rent. There’s a whole mix: housing, food, healthcare, taxes, utilities, and even those dumb little fees that pop up on your bills.

Check this out: in a place like California, the median rent for a one-bedroom is over $2,200. Move east to somewhere like Mississippi, and you might snag something similar for $800 or less. Why? It boils down to land prices, demand (everybody wants LA sunshine, right?), and the supply of jobs. Don’t forget about state taxes, either. Some states rake in higher income or sales taxes, and they pass that cost on to everybody. There’s also weather to think about. Colder states generally cost more to heat, but states with long, hot summers spike your air conditioning bills.

But it’s not just about bills and what groceries cost. Transportation matters, too (are you chained to your car or can you actually bike somewhere?). The flip side is wages: states with lower living costs often pay less, so striking a balance is key. Think about this: food in the South is about 7% cheaper on average compared to the West Coast, according to the U.S. Bureau of Economic Analysis. Now, that might not sound huge, but over a year, those groceries add up.

One more thing: healthcare. This bites people hard. Some states have better programs, or just plain cheaper options. If you’re planning a move, always check health insurance options for that state – do a quick search, or talk to a local agent online before you move. No one wants a surprise medical bill after a move.

What Makes a State Affordable?

Pretend you’re building a new life from scratch. Besides your job, what matters most? Shelter, food, and sanity. An affordable state isn’t just cheap on paper; it’s a place where you can actually build a good life. So how do you really measure affordability?

The big one is housing. That’s usually half your paycheck or more, right? States with low median home prices or cheaper average rents win big here. For example, recent 2025 data shows the median home price in West Virginia is under $170,000, while the national average is around $405,000. Utilities come next – electric, water, gas. Lower prices on these essentials mean more left in your pocket each month. Then there’s food costs. Most folks spend about 12% of their income on food, according to the USDA, but in the cheapest states, you’re looking at closer to 9%.

Don’t forget about taxes. Some states have no state income tax, but tax you heavy at the store. Others keep both low. Mississippi, for example, has dirt-cheap property taxes – the average homeowner spends less than $800 a year, compared to over $8,100 in New Jersey. And even little things like car insurance or gas prices can make a big impact every month.

I have to mention quality of life, too. A state might be cheap, but that doesn’t matter if you’re bored out of your mind, or if you spend hours just getting the basics. The sweet spot? Low costs and a community where you feel safe and happy. I’ve moved enough times with Eliza to know that community can make or break your experience.

The 3 Cheapest States to Live in for 2025

Let’s get right to it. Based on the pile of data out there – everything from the U.S. Census, to Zillow, to all those nerdy cost of living calculators – the three cheapest states to live in, hands-down, are Mississippi, Oklahoma, and Kansas for 2025. Numbers don’t lie, right?

First up, Mississippi. This state is always at the top (or bottom, depending on how you look at it) of every affordability list. It’s not just cheap rent – groceries, utilities, and healthcare also come in below the national average. Even car insurance here is about 25% less than the average in other states. The tradeoff? Wages are also lower, so remote work or outside income helps a lot. But hey, if you’re able to telecommute, Mississippi gives you serious bang for your buck. It also has a warm climate and a slower pace of life, which a lot of people crave these days.

Next is Oklahoma. What makes Oklahoma stand out is the combo of low housing costs and manageable taxes. Some towns, like Tulsa and Norman, are actually getting popular with remote workers looking for city life without crazy rent. Property taxes are wallet-friendly, and the state even offers some tax incentives if you’re moving in for work. One cool tip: check the weather before you move. Tornadoes are a real thing here, so think about insurance or find homes with storm shelters. If you’re into the outdoors, though, there are parks and hiking trails everywhere.

Then, there’s Kansas. People always sleep on Kansas – they picture brown fields and not a lot happening. But dig a little deeper, and you’ll find charming college towns, good eats, and homes that won’t break the bank. Wichita, for example, has lower rent than almost any similar-sized U.S. city. Gas prices and groceries stick well below the national average, too. Yes, it’s windy. But you kind of get used to that. Plus, being in the heart of the country means nothing is ever too far if you get that travel itch. Check out the art scenes in Lawrence or Topeka, or those quirky sunflower festivals every summer.

Curious how the rest stack up? States like Arkansas, West Virginia, and Missouri are close behind, but Mississippi, Oklahoma, and Kansas win when you factor in every main cost – houses, food, utilities, taxes – and balance it with real world livability.

Tips for Saving Even More in a Low-Cost State

So, you’ve found your spot and packed up the U-Haul. How do you make your new affordable life really pay off? First, even in cheap states, it pays to hunt for deals. Use Facebook Marketplace or Craigslist for furniture – you’ll be amazed what shows up after local college semesters end or after graduation.

Sign up for rewards cards at supermarkets like Kroger or WinCo. Some of these places double coupons or run weekly produce specials. If you go early in the week, you get the freshest pick for less. Speaking of food, check out local farmer’s markets. In states like Kansas and Oklahoma, these are goldmines for fresh, affordable veggies and eggs – perfect if your budget is tight but you still care about quality.

Utility bills can surprise you if you don’t pay attention. In Mississippi, for example, summer air conditioning can ruin your electric bill. Fix this by using blackout curtains or running fans more than AC. In Oklahoma and Kansas, winters aren’t as brutal as the upper Midwest, but weatherproofing your windows saves cash. Some utility companies offer rebates if you install efficient appliances. Worth checking out, right?

Don’t sleep on public transportation, especially in larger Oklahoma towns. It’s often overlooked, but can save you a bundle on gas, insurance, and parking. And if you’re up for it, biking is a thing in Lawrence, Norman, and smaller cities around Kansas. Eliza always says the best way to spot new spots to eat or hang out is by walking or biking – you see way more than zooming by in the car.

Healthcare will eat your savings fast if you’re not careful. Each state’s Medicaid rules and private insurance rates are a little different, so check before you set up shop. A lot of towns run low-cost health clinics, especially if you’re a student or have kids.

Finally, get involved in the community. Smaller, cheaper towns tend to be friendly once you make the first move. You’ll find free events, potlucks, or even neighbors trading homegrown food. This not only stretches your dollars, but makes life there actually enjoyable. Because what’s the point of moving somewhere cheap if you don’t actually feel at home?