Cheapest States to Live in 2025 – Your Guide to Low‑Cost Living

Looking for a place where your money stretches further? You’re not alone. More people are swapping pricey metros for states that let them keep more cash in their pockets. Below, we break down what makes a state cheap and which five states top the list this year.

How to Choose a Cheap State

First, decide what cheap means for you. Some folks focus on housing costs, others on taxes, and a few care about everyday bills like groceries and gas. Keep these three factors in mind:

• Housing price. Median home price or average rent gives the biggest impact on your budget.
• Tax burden. State income tax, property tax, and sales tax can add up quickly.
• Cost of essentials. Food, transport, health care, and utilities vary a lot from state to state.

Once you rank the factors, use a simple spreadsheet to compare the numbers. Plug in the median home price, average rent, tax rates, and a basket of everyday costs. The state with the lowest total score is likely your best bet.

Top 5 Cheapest States in 2025

Based on the latest data, these five states consistently rank lowest for overall cost of living:

1. Mississippi – Housing is the cheapest in the nation, and both income and sales taxes are low.
2. Arkansas – Low median home prices, moderate taxes, and affordable groceries keep expenses down.
3. West Virginia – Flat income tax and cheap rent make it a solid choice for retirees.
4. Oklahoma – Low property taxes and inexpensive utilities balance out a modest income tax.
5. Kentucky – Affordable housing and low insurance costs help stretch every dollar.

If you’re flexible about climate and job market, any of these states can give you a real boost in buying power. For example, a $300,000 home in Mississippi buys you about 30% more square footage than the same price in California.

Don’t forget to check local job opportunities. Some cheap states have growing sectors like manufacturing, healthcare, or tech hubs in smaller cities. Remote work also opens doors—you can earn a high salary while living in a low‑cost area.

Lastly, think about quality of life. Low cost shouldn’t mean you sacrifice safety, schools, or recreation. Look up crime rates, school rankings, and outdoor options before you move.

Ready to start your hunt? Use the checklist above, narrow down to a few favorite states, and then explore specific towns that match your lifestyle. The right cheap state can give you a bigger house, a nicer car, or just more peace of mind.