What Are the Top Ten Cheapest States to Live In?

Following the economic downturn that began in 2008, many people responded to layoffs, reduced career opportunities or home foreclosures by considering relocation to another state. While there are many other factors to consider -- job market, quality of life and crime statistics among them -- the cost of living and housing are essential factors. The 10 cheapest states to live in differ depending on how you live your life and how you spend your income.


According to real estate website Trulia, the 10 cheapest states by lowest average home listing price in April 2011 are, in order, Ohio, Iowa, Indiana, Michigan, Nebraska, North Dakota, Mississippi, Kansas, West Virginia and Oklahoma. Of course, great variety can exist within states in terms of housing cost. New York City has very high housing costs but Buffalo, New York, has much lower costs. Similarly, Michigan as a whole has low average home prices, but the Ann Arbor market is among the highest in the nation.

Price of Gas

Many people have to commute by car each day, and the price of gas can have a huge effect on their cost of living. According to gas price tracker Gas Buddy, the 10 cheapest states in order for gasoline in April 2011 were Wyoming, Colorado, Montana, South Carolina, Utah, Mississippi, Tennessee, Arizona, Louisiana and Arkansas. The overall price of gas fluctuates depending on market prices, but state differences are usually the result of taxes or other government influence on pricing.

State Income Tax

In addition to federal income taxes, many states impose an additional state income tax on their residents. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. However, these states must find other ways to raise revenue and may have higher sales tax, property tax, gas tax or other taxes, so the overall tax burden can be higher than some states with an income tax.

Health Insurance

The cost of health insurance depends on much more than your state of residence. Age, lifestyle, existing health, employment status and other factors all affect how much you end up paying for health insurance. The states with the lowest average premiums for employer-based health insurance are (in order, based on 2009 stats) Hawaii, Oregon, Washington state, Wyoming, Arkansas, Idaho, Montana, Utah, California and Oklahoma.

Other Factors

Determining the cheapest state for your lifestyle depends on how you spend your money. Also consider cost of food, cost of higher education, cost of air travel from the closest major airport and particular state taxes and fees that apply to your lifestyle.