Stretch Your Dollar: The Cheapest Cost of Living in the US
The US is a vast country with distinct differences between regions, states, and cities, and that includes differences in the cost of living. We’ll explain what cost of living is, why the cost of living is so impactful, and where the cheapest place to live in the US is located.
Cost of living explained
The cost of living is the amount of money you need to pay for basic expenses like housing, utilities, groceries, healthcare, and taxes in a particular place and period of time.
The cost of living has been in the news a lot recently because of inflation. Inflation is a decrease in the purchasing power of our money as reflected in an increase in the cost of goods and services. Essentially, high inflation makes our lives more expensive, and inflation is currently at its highest levels in forty years.
The impact of cost of living
A dollar is a dollar, but there are places where a dollar can buy more, thanks to a low cost of living. Of course, in many cases, areas with a lower cost of living will also have lower wages. But because of the pandemic, remote work has become much more normalized and available, making it possible to have the best of both worlds; a big city salary with a small town cost of living!
For most people, necessary expenses make up the most significant portion of our budget, with housing our largest expense. We can cut out or cut down on expenses like dining out, subscription services, and clothing, but we have no choice but to spend money on the expenses that are included when calculating an area’s cost of living.
Living in an area with a low cost of living can make it much easier to reach your financial goals, like paying off debt, saving for a home, and saving for retirement.
Most affordable places to live in the United States
Because there are so many differences between areas in a country as large as the US, there are many different numbers when it comes to the cost of living. But we can start with some averages. The average monthly cost of living for a single person in the US is $3,189 per month; for a family of four, it’s $7,095 per month.
Of the top 25 places in the US with the lowest cost of living, 15 of them are in the Midwest, and seven are in Texas:
Fort Wayne, Indiana
Wichita Falls, Texas
Brownsville, Texas
Southbend, Indiana
Dayton, Ohio
Toledo, Ohio
Evansville, Indiana
Buffalo, New York
Beaumont, Texas
Akron, Ohio
Erie, Pennsylvania
Topeka, Kansas
Cleveland, Ohio
Amarillo, Texas
Abilene, Texas
Montgomery, Alabama
Wichita, Kansas
Cedar Rapids, Iowa
McAllen, Texas
Birmingham, Alabama
Pittsburg, Pennsylvania
Kansas City, Kansas
Lansing, Michigan
Odessa, Texas
Jackson, Mississippi
For comparison, let's look at San Jose, California, which is currently the most expensive place to live in the US. The average rent for a one-bedroom apartment in San Jose is $2,576 per month, while in Fort Wayne, it’s just $749.
If you were earning $50,000 in San Jose, you would only need to earn $18,744 in Fort Wayne to have the same standard of living. Overall, Fort Wayne is 62.5% less expensive than San Jose. These numbers come from a cost of living comparison calculator. You can use it to compare the cost of living between cities, and it’s a valuable tool for anyone considering a move.
