How Much Money Could You Save by Moving to a More Affordable State?

Published on Sept. 13, 2022

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KEY POINTS

The Cost of Living Index calculates the average cost of living for each state.
States on the East and West Coasts are the states with the highest cost of living.
To figure out how much you would save, you can estimate your savings by calculating the difference between your current state and the state you would like to move to.

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Here is how you can calculate your savings when moving to another state.

The U.S. is a big country. With over 50 states to choose from, you have plenty of options if you are looking to move to a cheaper state. The cost of living varies depending on which state you decide to live in. How do you calculate the amount of money you would save if you moved to another state?

Cost of Living Index

The Cost of Living Index from the Missouri Economic Research and Information Center calculates the average cost of living for each state, city, and region. The national average is set at 100. States with a score below 100 are more affordable than the national average. States with a score above 100 are more expensive than the national average.

For example, if a state has a score of 130, then it is 30% more expensive to live there compared to the national average. On the flip side, if a state has a score of 85, then it is 15% cheaper to live there than the national average. The index calculates the cost of housing, groceries, utilities, transportation, health, and miscellaneous expenses.

Currently, the state with the highest cost of living is Hawaii at 189.9. Mississippi comes in at the lowest with 84.9. Here are the states with the highest and lowest cost of living.

States with the highest cost of living

States on the East and West coasts have the highest cost of living.

Rank	State	Index	Grocery	Housing	Utilities	Transportation	Health	Misc.
1	Hawaii	189.9	150.3	312.8	141.3	123.1	120.2	129.0
2	Massachusetts	147.9	112.8	204.7	122.9	119.3	117.9	129.6
3	California	139.8	116.4	193.2	125.0	129.9	109.8	109.9
4	New York	136.8	112.1	191.5	99.5	111.6	105.5	117.9
5	Alaska	126.7	135.0	120.3	148.4	115.5	152.9	120.1
6	Maryland	125.1	112.1	162.7	106.2	102.3	88.1	111.5
7	Oregon	120.6	107.1	144.3	106.0	132.6	102.2	108.5
8	New Jersey	118.6	103.1	141.9	112.4	109.2	96.5	111.3
9	Maine	116.9	101.8	126.6	99.8	123.1	100.8	122.2
10	Vermont	116.7	107.8	130.1	120.7	118.6	110.1	107.2

Source: meric.mo.gov

States with the lowest cost of living

States in the South and Midwest have the lowest cost of living.

Rank	State	Index	Grocery	Housing	Utilities	Transportation	Health	Misc.
1	Mississippi	84.9	92.6	68.5	89.7	93.3	99.6	91.5
2	Oklahoma	85.7	93.3	71.0	95.2	90.6	95.5	90.7
3	Kansas	86.4	92.0	71.7	98.1	97.1	102.7	89.1
4	Alabama	87.5	97.8	69.9	100.7	90.0	89.6	94.2
5	Georgia	87.8	93.6	75.4	91.0	88.3	95.2	95.0
6	West Virginia	88.5	98.7	67.8	94.5	111.0	100.6	94.5
7	Missouri	88.6	95.9	79.5	95.3	90.2	91.7	90.6
8	Indiana	88.9	93.3	77.3	103.1	91.3	95.6	91.9
9	Iowa	89.0	101.0	72.0	94.0	96.4	99.4	94.5
10	Tennessee	89.5	94.2	80.0	94.0	90.8	89.9	94.8

Source: meric.mo.gov

To help calculate how much you would save, you can estimate your savings by comparing the index of the state you live in with the state you would like to move to. For example, buying a house in Hawaii is three times more expensive than the national average, but transportation costs are less expensive than California and Oregon.

Let's take a look at a side-by-side comparison. If you live in California and are looking to move to Georgia, here is the difference.

Cost of Living Index	California	Georgia	Difference
Overall	139.8	87.8	(139.8 – 87.8) / 139.8 = 37.2% less
Grocery	116.4	93.6	19.6% less
Housing	193.2	75.4	61% less
Utilities	125	91	27.2% less
Transportation	129.9	88.3	32% less
Health	109.8	95.2	13.3% less
Misc.	109.9	95	13.6% less

Source: meric.mo.gov

These numbers are averages, and there is also greater disparity based on metro areas in particular states. But using the Cost of Living Index numbers can help you estimate your savings if you move to a more affordable state.

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Our Research Expert

David Chang, ChFC®, CLU®

David S. Chang, ChFC®, CLU® is an award-winning entrepreneur and financial planner with over two decades of experience in the personal finance space. He is a graduate of West Point and a Lieutenant Colonel in the Army National Guard. He has an MBA from the UCLA Anderson School of Management.

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