Are you considering a move to the USA in 2024? Understanding the cost of living is essential for planning a smooth transition.
From housing and utilities to groceries and transportation, getting a grasp of the expenses can help you make informed decisions.
Let’s delve into the key aspects of the cost of living in the USA 2024 to help you prepare for your new adventure.
What is cost of living?
The cost of living refers to the amount of money needed by an individual to maintain their standard of living.
It includes expenses such as housing, food, transportation, clothing, taxes, entertainment, equipment, and education.
Cost of living indexes allow for the comparison of basic expenses across different regions, including cities, states, and countries.
Major cities like New York City generally have a higher cost of living than smaller cities like Albany, with higher wages typically offered to offset these higher costs, such as rent.
Cost of living information can be used to assess the affordability of living and doing business in a particular area.
Why the cost of living matters to your business
The cost of living is important to workers, which means it is likely important to your employees as well. But why should your business be concerned about it? Let’s outline a few significant reasons why the cost of living is important to your business’s bottom line.
The cost of living affects:
- Office space expenses
- Business budgets
- Salary expectations
- Product and service prices
- Owner’s draw or salary
- Raise determinations (e.g., cost of living adjustment)
If you don’t consider your state’s cost of living, you might struggle to create accurate budgets, set reasonable employee salaries, and establish a fair pricing model that customers are willing to pay for.
Businesses that don’t take the time to research all potential expenses may find themselves facing negative cash flow.
Moreover, understanding a state’s cost of living can help you decide where to launch your business. The cost of labor is an important factor in determining the best states to start a business.
U.S. cost of living by state comparison
Cost of living data can vary by state based on factors analyzed and study conductors. For our state cost of living comparison, we used the following critical information:
- Annual mean wage for all occupations (BLS)
- Average monthly rent (Forbes)
- Value of $100 (GoBankingRates)
The mean wages represent the average annual earnings of employees in the state as of May 2023. To calculate the monthly wage, you can divide the annual mean wage by 12.
The average monthly rent reflects the typical cost of apartment rent in the state, as compiled by Forbes in August 2023.
The value of $100 indicates the purchasing power of 100 dollars in the state. If the value of a dollar falls below $100, it means it doesn’t stretch as far in that state. This data was collected in February 2024.
Cost of living chart
As you review this cost of living chart, bear in mind that states with a higher average wage, higher monthly rent, and lower purchasing power of the dollar generally have a higher cost of living.
| State | Annual Mean Wage (All Occupations) | Average Monthly Rent | Value of $100 |
|---|---|---|---|
| Alabama | $53,400 | $1,064 | $112.20 |
| Alaska | $69,880 | Not provided | $98.00 |
| Arizona | $63,040 | $1,491 | $100.10 |
| Arkansas | $51,250 | $1,025 | $113.40 |
| California | $76,960 | $1,958 | $87.50 |
| Colorado | $71,960 | $1,635 | $97.70 |
| Connecticut | $73,740 | $1,644 | $93.60 |
| Delaware | $65,990 | $1,621 | $102.00 |
| Florida | $60,210 | $1,687 | $97.90 |
| Georgia | $61,250 | $1,365 | $104.20 |
| Hawaii | $65,030 | $2,418 | $89.20 |
| Idaho | $55,640 | $1,170 | $108.20 |
| Illinois | $67,130 | $1,303 | $98.70 |
| Indiana | $56,420 | $1,111 | $108.20 |
| Iowa | $56,400 | $974 | $111.60 |
| Kansas | $56,270 | $1,113 | $110.00 |
| Kentucky | $54,030 | $999 | $110.60 |
| Louisiana | $53,440 | $1,052 | $109.40 |
| Maine | $60,000 | $1,207 | $99.20 |
| Maryland | $73,620 | $1,741 | $95.00 |
| Massachusetts | $80,330 | $1,811 | $90.60 |
| Michigan | $60,600 | $1,109 | $106.60 |
| Minnesota | $66,700 | $1,114 | $102.30 |
| Mississippi | $47,570 | $1,102 | $112.70 |
| Missouri | $57,580 | $1,050 | $108.90 |
| Montana | $55,920 | $1,091 | $109.70 |
| Nebraska | $58,080 | $1,087 | $110.20 |
| Nevada | $58,900 | $1,461 | $103.60 |
| New Hampshire | $66,110 | $1,682 | $92.40 |
| New Jersey | $73,980 | $1,850 | $91.20 |
| New Mexico | $57,520 | $1,295 | $109.00 |
| New York | $78,620 | $1,765 | $92.40 |
| North Carolina | $59,730 | $1,272 | $105.80 |
| North Dakota | $59,050 | $880 | $111.30 |
| Ohio | $59,890 | $1,073 | $108.50 |
| Oklahoma | $53,450 | $1,081 | $111.20 |
| Oregon | $66,710 | $1,368 | $93.40 |
| Pennsylvania | $61,920 | $1,193 | $103.80 |
| Rhode Island | $66,610 | $1,565 | $95.30 |
| South Carolina | $54,250 | $1,319 | $106.40 |
| South Dakota | $53,230 | $977 | $112.20 |
| Tennessee | $56,030 | $1,180 | $108.20 |
| Texas | $61,240 | $1,318 | $102.50 |
| Utah | $61,070 | $1,378 | $105.50 |
| Vermont | $62,780 | Not provided | $98.90 |
| Virginia | $70,050 | $1,594 | $97.90 |
| Washington | $78,130 | $1,567 | $90.20 |
| West Virginia | $52,200 | $992 | $110.80 |
| Wisconsin | $59,500 | $1,098 | $107.70 |
| Wyoming | $57,930 | $1,124 | $108.10 |
Cost of living per state: Lowest to highest list
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“If you are looking for information on the states with the lowest and highest cost of living, we have everything you need. Check out the ranking of states based on cost of living, from the most affordable to the most expensive. This data is from a resource provided by U.S. News.“
- Mississippi
- Alabama
- Arkansas
- Kentucky
- West Virginia
- Iowa
- Oklahoma
- South Dakota
- Louisiana
- New Mexico
- Kansas
- North Dakota
- Missouri
- Tennessee
- Indiana
- Ohio
- Nebraska
- Wyoming
- Montana
- Wisconsin
- South Carolina
- Idaho
- North Carolina
- Michigan
- Georgia
- Maine
- Pennsylvania
- Utah
- Minnesota
- Delaware
- Vermont
- Arizona
- Texas
- Nevada
- Illinois
- New Hampshire
- Rhode Island
- Florida
- Virginia
- Alaska
- Oregon
- Connecticut
- Colorado
- Maryland
- Massachusetts
- Washington
- New York
- New Jersey
- Hawaii
- California
Cost of living calculators
Are you wondering if there are any tools available to help you calculate the cost of living in one state compared to another? If so, you’re in luck! There are several tools you can use for this purpose.
Here’s a list of websites that have a cost of living calculator:
You can utilize cost of living calculators to compare the purchasing power of a dollar in two different cities. These tools enable users to input details such as income, current city, and desired city.
For instance, someone earning $50,000 annually in Cleveland, Ohio would need to earn $123,635 in New York City (Manhattan), New York to maintain the same standard of living.
It’s important to note that cost of living calculators may have a limited selection of cities. Additionally, the Bureau of Labor Statistics provides a comprehensive consumer price index (CPI) that outlines average prices for essentials like food, housing, transportation, and clothing.
Once you establish your business, it’s essential to have a reliable method for managing your accounting books. With Patriot’s accounting software, you can effortlessly input balances, receive and record payments, send payment reminders, and more. Start your free trial now!
