The state of Minnesota has a moderate cost of living, considering costs of housing, child care, food, health care, transportation and taxes. A family of two adults and one child can maintain a simple lifestyle that meets basic needs on an annual income of about $50,988. Several regions of Minnesota, however, offer an even lower cost of living. The two cheapest are the Southwest and Upper Minnesota Valley regions, according to a 2015 study conducted by the Minnesota Department of Employment and Economic Development.
Southwest Minnesota is a 27-county region with a population of about 512,000 people, according to the DEED. It contains cities of Mankato, Willmer, Hutchinson and Marshall. Unemployment is low. A family of two adults and one child would need about $40,200 annually to meet basic needs, according to DEED. The median wage in this region is about 13 percent higher than this, making this region affordable for most workers. Suitable housing would likely cost $660 a month; child care, $194; food, $770; health care, $400; transportation, $921; taxes, $205; and other costs, $200 a month.
Upper Minnesota Valley
The Upper Minnesota Valley is located along the South Dakota border and consists of Big Stone, Chippewa, Lac qui Parle, Swift and Yellow Medicine counties. The region has 37 cities, more than half of which have populations of less than 500. A family of two adults and one child would need about $40,464 annually to meet basic needs. The median wage earned is about 19 percent higher than this, making this region affordable as well. Suitable housing would likely cost $660 a month; child care, $189; food, $778; health care, $400; transportation, $931; taxes, $213 and other necessities, $201.
Other Low-Cost Regions
Although they don't make the top two, several other regions in Minnesota have relatively low costs of living. The West Central region costs about $42,060 with similar costs to the Southwest and Upper Minnesota Valley on most items; exceptions are housing at $685 and transportation at $997. The South Central region costs about $42,120, with housing at $730. The region of Arrowhead costs about $43,560 annually for the three-person family. Most of the costs in Arrowhead are similar to those in Southwest and the Upper Minnesota Valley, but housing costs, at $764, are higher.