Have you ever wondered why certain regions of the United States are so much more costly than others? It is critical to understand the differences in the cost of living from one state to the next to determine where your money will go furthest if you decide to migrate.
Given the rising cost of living, inflation is seen as one of the most important issues in the United States, according to recent publications. They rise in highly sensitive sectors such as food, transportation, and housing, demonstrating that inflation's consequences are never-ending.
Read on to see how different governments handle their key expenses when global costs rise. The purpose is to provide a better picture of the cost-of-living situation, which can be rather diversified.
Total Cost of Living by State
10. Oregon
Total Yearly Cost of Living: $46,193
Oregon's high cost is primarily due to its breathtaking natural beauty. High housing and transportation prices make it one of the most expensive states.
9. Connecticut
Total Yearly Cost of Living: $46,912
Because of its closeness to New York City, Connecticut's housing and healthcare expenses are among the top ten.
8. Washington
Total Yearly Cost of Living: $47,231
Washington's flourishing tech economy adds to the state's high living costs, especially in areas such as Seattle.
7. Maryland
Total Yearly Cost of Living: $48,235
Maryland's high cost of living is due in part to its proximity to Washington, D.C., as well as high taxes.
6. Alaska
Total Yearly Cost of Living: $48,670
Alaska's remote location raises the cost of goods and services, including food and transportation.
5. New Jersey
Total Yearly Cost of Living: $49,511
New Jersey faces high housing and property taxes, largely due to its proximity to New York City.
4. New York
Total Yearly Cost of Living: $49,623
New York is famous for its high living costs, especially in NYC where housing, food, and transportation are expensive.
3. California
Total Yearly Cost of Living: $53,171
California's pleasant environment and thriving employment market, particularly in tech areas such as Silicon Valley, raise expenses.
2. Massachusetts
Total Yearly Cost of Living: $53,860
Massachusetts, home to top universities and hospitals, has high living costs, especially in Boston.
1. Hawaii
Total Yearly Cost of Living: $55,491
Hawaii tops the list, with its idyllic location but high living costs owing to housing constraints and hefty income taxes.
Understanding the Gap Between Income and Expenses
Average Salary by State
Understanding the average pay in a state is important when determining if a region meets your financial goals for personal and professional development.
- According to Bureau of Labor Statistics statistics, the average wage in all 50 states is $62,026.
- Massachusetts has the highest average yearly wage in the US, at $80,330, which depicts the money required to handle the state's high rent and housing costs.
- Mississippi, on the other hand, ranks last, with the lowest average wage of $47,570, representing a significant $32,761 gap from Massachusetts.
This reveals the wide range of income levels throughout states, providing valuable information for those considering different areas to live and work, emphasizing the relevance of pay considerations in making educated decisions about where to settle and advance professionally.
Source: Forbes Advisor
States With the Highest Transportation Costs
According to the Forbes Advisor 2023, data from the Council for Community & Economic Research (C2ER) is used to compare transportation expenses between states. Key findings included the following outstanding statistics:
- Hawaii is the most costly state for transportation, with an average yearly cost of $7,458.
- In contrast, Rhode Island appeared as the most cost-effective state for transportation, with an average yearly cost of $4,421, allowing households to save a whopping $3,037.
- Notably, despite being the smallest state in terms of surface area, Rhode Island has an average one-way travel time of less than 25 minutes.
- Despite its tiny size, Hawaii has the highest transportation expenditures, due to the state's remote location, high petrol prices, and hefty automobile registration fees.
- An average commute time in Hawaii stands at slightly over 27 minutes.
Source: Forbes Advisor
States With the Highest Costs for Rent
When selecting a rental property, it is important to confirm that the landlord is registered with a rent-reporting agency. These services record your regular rent payments to major credit agencies such as Equifax, Experian, and TransUnion.
Having your on-time rent payments reported will improve your credit score, thus easing future rental applications. Additionally, this approach can improve your credit score, allowing you to qualify for reduced interest rates when transitioning into homeownership.
- Hawaii has the highest rental expenses of any state, at $2,423 per month.
- North Dakota scored last, earning the distinction of the most affordable state for rentals, with an average monthly cost of $869. It is rated 30th in terms of average pay, at $55,800.
Source: Forbes Advisor
States With the Most Expensive Food Prices
Despite the large changes in food costs, Forbes Advisor evaluated food expenses by using the 2023 C2ER cost-of-living index data to determine the average food expenditure for each state.
- Key findings revealed that Alaska is the state with the highest food prices, averaging $5,970 annually.
- In contrast, Oklahoma appears as the most cost-effective state for food expenses. Oklahomans spend $2,287 less than Alaskans, for a total annual expenditure of $3,683.
- These disparities in food costs reflect the significant variances in the cost of living between states
Source: Forbes Advisor
Also Read | List of US States by Home Price Growth Rate 2024
Life in the Priciest State
Many people dream of living in Hawaii, but it is not without its problems. It is the most expensive state due to high housing costs, which are mostly caused by restricted land and housing supply. Taxes and freight charges pile up rapidly.
Imagine spending more than $2,000 for a one-bedroom apartment. Grocery and utility prices are also much higher than on the mainland. Despite these prices, Hawaii provides a distinct lifestyle. The natural beauty and outdoor activities are unrivaled, but inhabitants must budget wisely.
Tips for Managing Expenses in Hawaii:
- Budget Wisely: Track your spending and prioritize essential expenses.
- Seek Discounts: Look for local deals and discounts.
- Embrace a Simple Lifestyle: Enjoy free or low-cost outdoor activities.
Regional Comparisons
Coastal regions are usually more costly as compared to the hinterlands. States on the West Coast such as California, Washington, and Oregon have higher costs as the regions enjoy good weather and have technology centers.
Commonly it can be observed that living in urban centers costs more than in rural ones. For example, New York City costs are substantially higher compared to rural settings in the upstate regions of New York. These distinctions are due to – the demand for housing, services, and local taxes.
Basic costs of life are important for budgeting and choice of the place of living. Although certain states give teachers a better salary, expenses eating away at the talent’s paycheck may leave them with less to spend.
Information Source: Forbes Advisor
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