The cost of living by state varies greatly across the U.S. If your income is not tied to a specific location and you're willing and able to move, with some planning you could pay less in living costs, keeping more of your income to invest. The grass isn't always greener on the other side of the state line, though. States with a higher cost of living are generally more expensive because they have desirable qualities that make more people want to live there.

Read on to learn more.

Cost of living by state

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Source: Tax Foundation.

The Tax Foundation calculated the value of $100 in each state by using data from the Bureau of Economic Analysis on regional price parities. The $100 level is based on the national average; each states' data is then relative to that level. There are large variations in the cost of living across America. By state, your dollars go the furthest in Mississippi, where the relative value of $100 was pegged at $114.74. Meanwhile, your Benjamins are spread the thinnest in Hawaii, with a relative value of $84.60, partly because Hawaii is so far from the continental U.S.

See where your state stacks up in terms of the purchasing power of $100.

Real value of $100 by category of spending compared to national average

 

All items

Rents

Services

Goods

District of Columbia

$84.60

$63.61

$89.29

$93.46

Hawaii

$85.32

$62.89

$95.97

$93.02

New York

$86.66

$74.13

$88.34

$92.51

New Jersey

$87.64

$73.10

$86.58

$98.62

California

$88.57

$67.84

$94.70

$96.99

Maryland

$89.85

$79.94

$90.09

$96.71

Connecticut

$91.41

$84.10

$91.32

$95.33

Massachusetts

$93.28

$82.37

$90.17

$102.04

Alaska

$93.37

$70.37

$100.40

$97.09

New Hampshire

$94.16

$81.04

$93.20

$101.94

Virginia

$96.90

$87.26

$99.21

$99.80

Washington

$96.90

$90.09

$100.10

$96.99

Delaware

$97.75

$101.11

$95.79

$97.75

Colorado

$98.43

$93.90

$101.21

$98.33

Vermont

$99.11

$85.76

$102.99

$101.42

Illinois

$99.40

$99.50

$100.30

$98.62

Florida

$101.21

$95.42

$104.28

$101.73

Oregon

$101.21

$100.91

$100.70

$101.73

Pennsylvania

$101.32

$111.36

$97.94

$100.00

Rhode Island

$101.32

$98.43

$102.77

$101.63

Maine

$101.73

$100.50

$102.56

$101.42

Nevada

$101.83

$101.21

$101.11

$102.67

Arizona

$101.94

$106.84

$102.04

$99.40

Minnesota

$102.56

$104.49

$102.88

$101.52

Utah

$103.31

$108.58

$101.63

$102.35

Texas

$103.63

$111.98

$101.01

$102.15

Wyoming

$103.73

$110.38

$104.28

$101.01

New Mexico

$105.49

$120.19

$101.94

$102.15

Michigan

$105.93

$121.36

$102.88

$102.35

Montana

$106.16

$124.53

$104.60

$100.81

Idaho

$106.84

$126.90

$103.41

$101.32

Wisconsin

$107.64

$114.16

$108.58

$104.49

Georgia

$108.70

$125.31

$106.61

$102.99

North Carolina

$109.17

$126.42

$107.41

$103.41

Louisiana

$109.41

$129.20

$107.30

$103.20

Indiana

$109.77

$131.93

$106.50

$103.52

South Carolina

$110.25

$131.06

$107.18

$103.20

Tennessee

$110.25

$132.45

$107.41

$103.52

North Dakota

$110.62

$126.10

$109.77

$106.95

Nebraska

$110.99

$131.23

$108.81

$105.82

Kansas

$111.23

$133.33

$109.05

$105.60

Oklahoma

$111.23

$142.25

$107.76

$103.95

Iowa

$111.73

$133.69

$109.53

$106.72

Ohio

$112.11

$135.32

$108.81

$105.15

Kentucky

$112.61

$146.84

$108.11

$104.93

West Virginia

$112.87

$157.98

$106.84

$104.49

South Dakota

$113.38

$141.24

$110.13

$107.30

Alabama

$113.51

$155.52

$107.41

$103.41

Missouri

$113.51

$134.95

$110.50

$107.76

Arkansas

$114.16

$158.73

$108.23

$104.60

Mississippi

$115.74

$161.03

$108.70

$105.15

Source: Bureau of Economic Analysis, Regional Price Parity. Author's calculations.

The above data doesn't tell the full story, however. First, there's a big difference between cost and value. For instance, while I pay a high cost of living to live in New York City, the quality of life that I get in the city makes it well worth it. This does not show up in the pricing data, but it does show up elsewhere. New York City has the highest cost of living of any city in the lower 48, yet it's ranked in the top quartile by happiness among U.S. cities, according to the Gallup-Healthways Well-Being Index. And while Mississippi has the lowest cost of living in the U.S., it is ranked the third-lowest by happiness. Another example of a trade-off: If Washington, D.C. were a state, then it would have the highest cost of living in the country. Yet many D.C. residents feel it's worth the cost, as the D.C. metropolitan area is ranked the third-happiest city in the U.S.

Second, a large portion of the differences in price parity is based on the cost of rent or the comparable mortgage payments. Notice in the chart above that housing costs have the highest variance. If you already fully own your own home, the real value of $100 will not shift anywhere near as much as in the examples above. For example, if you are simply buying goods in New York, your $100 will be worth $92.51 relative to the national average, whereas in Missouri your $100 will buy you $107.70 worth of goods compared to the national average.

Bottom line
The cost of living by state and your personal situation are important things to consider when looking at things like a new job in a new state. While a salary in a different state may be higher than your current salary, the cost of living can translate to dramatic differences in how far that salary goes, as well as your overall well-being.

No matter what your cost of living is or what state you live in, there is only one road to achieving financial freedom: saving and investing wisely. For over 20 years, The Motley Fool has focused on showing investors the way to financial freedom.

Dan Dzombak can be found on Twitter @DanDzombak, on his Facebook page DanDzombak, or on his blog where he writes about investing, happiness, life, and success.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.