10 Cheapest States to Live In (2026)
The cheapest states combine a low cost of living with reasonable tax burdens. We rank states by an overall affordability score that weighs cost of living (50%), total tax burden (30%), and housing costs (20%).
| Rank | State | Cost of Living Index | Tax Burden | Median Home | Median Income |
|---|---|---|---|---|---|
| 1 | Mississippi | 83.3 | 8.3% | $145,000 | $48,610 |
| 2 | Oklahoma | 86.0 | 7.6% | $167,000 | $55,826 |
| 3 | Kansas | 86.5 | 8.6% | $177,000 | $64,521 |
| 4 | Arkansas | 86.9 | 8.6% | $153,000 | $52,528 |
| 5 | West Virginia | 84.1 | 9.1% | $128,000 | $50,884 |
| 6 | Alabama | 87.8 | 7.8% | $172,000 | $54,943 |
| 7 | Missouri | 88.1 | 7.9% | $185,000 | $59,196 |
| 8 | Indiana | 89.0 | 8.5% | $187,000 | $61,944 |
| 9 | Tennessee | 89.5 | 6.3% | $233,000 | $59,695 |
| 10 | Iowa | 89.7 | 8.4% | $175,000 | $65,573 |
Cost of Living Index: 100 = national average. Tax Burden = state + local taxes as % of income. Sources: Missouri Economic Research & Information Center, Tax Foundation, US Census Bureau.
10 Lowest Tax Burden States
If minimizing taxes is your priority, these states offer the lightest combined tax load (income + property + sales tax as a percentage of income):
| Rank | State | Tax Burden | Income Tax | Property Tax | Sales Tax |
|---|---|---|---|---|---|
| 1 | Alaska | 4.6% | 0% | 1.04% | 0% (local only) |
| 2 | Wyoming | 6.1% | 0% | 0.56% | 4.0% |
| 3 | Tennessee | 6.3% | 0% | 0.62% | 7.0% |
| 4 | South Dakota | 6.4% | 0% | 1.14% | 4.5% |
| 5 | Florida | 6.6% | 0% | 0.86% | 6.0% |
| 6 | New Hampshire | 6.7% | 0% | 1.93% | 0% |
| 7 | Nevada | 7.1% | 0% | 0.53% | 6.85% |
| 8 | Texas | 7.2% | 0% | 1.60% | 6.25% |
| 9 | Oklahoma | 7.6% | 0.25%-4.75% | 0.87% | 4.5% |
| 10 | Alabama | 7.8% | 2%-5% | 0.39% | 4.0% |
Most Expensive States to Live In
For comparison, here are the 10 most expensive states by cost of living index:
| Rank | State | Cost of Living Index | Tax Burden | Median Home |
|---|---|---|---|---|
| 1 | Hawaii | 192.9 | 10.2% | $835,000 |
| 2 | California | 142.2 | 9.7% | $725,000 |
| 3 | Massachusetts | 135.0 | 10.3% | $565,000 |
| 4 | New York | 134.5 | 12.5% | $405,000 |
| 5 | Oregon | 130.1 | 9.1% | $438,000 |
| 6 | Washington | 118.2 | 8.3% | $515,000 |
| 7 | Maryland | 118.0 | 10.2% | $380,000 |
| 8 | New Jersey | 117.5 | 12.2% | $430,000 |
| 9 | Connecticut | 115.5 | 12.6% | $355,000 |
| 10 | Alaska | 114.8 | 4.6% | $310,000 |
Tax-Friendly vs. Cheap: Understanding the Difference
A state can be tax-friendly without being cheap, and vice versa. For example:
- Alaska has the lowest tax burden (4.6%) but a high cost of living (114.8) due to remote geography and expensive goods
- Mississippi has the lowest cost of living (83.3) but a moderate tax burden (8.3%) with a 5% income tax
- Texas has no income tax but high property taxes (1.60%) that offset the savings for homeowners
- New Hampshire has no income or sales tax but the 5th highest property taxes in the nation (1.93%)
The ideal balance depends on your situation. High earners benefit most from no-income-tax states. Homeowners should prioritize low property tax states. Retirees on fixed incomes should look at states that exempt retirement income (see our retirement tax guide).
Key Factors Driving Cost of Living
Housing
Housing is the single largest factor in cost of living differences. Median home prices range from $128,000 (West Virginia) to $835,000 (Hawaii). Rental costs follow similar patterns. In Mississippi, average rent for a 2-bedroom apartment is about $850/month versus $2,800 in California and $3,200 in Hawaii.
Taxes
State and local taxes can consume 4.6% to 12.6% of your income depending on where you live. The three main components are:
- Income tax: 0% to 13.3% (full comparison)
- Property tax: 0.27% to 2.13% (full comparison)
- Sales tax: 0% to 9.55% combined (full comparison)
Groceries and Essentials
Food prices vary by 15-30% between the cheapest and most expensive states. States like Mississippi, Texas, and Oklahoma have consistently low grocery costs, while Hawaii, Alaska, and California are the most expensive for food.
Healthcare
Healthcare costs can vary dramatically. Mississippi has some of the lowest healthcare costs but also lower quality rankings. Massachusetts and Minnesota have excellent healthcare systems but higher costs. Medicare coverage is federal and uniform, but supplemental insurance (Medigap) premiums vary by state.
Best States by Life Stage
Best for Young Professionals
Texas, Tennessee, and Florida offer no income tax with strong job markets. Colorado and Washington have high salaries that offset their costs.
Best for Families
Indiana, Iowa, and Missouri combine affordable housing with good school systems and low taxes. Utah has excellent family-friendly infrastructure despite a moderate tax burden.
Best for Retirees
Florida, Wyoming, and Pennsylvania combine low retirement tax burdens with services designed for retirees. See our retirement tax by state guide for detailed analysis.
Use our state comparison tool to compare any two states on income tax, property tax, sales tax, and more.
Frequently Asked Questions
Mississippi consistently ranks as the cheapest state to live in based on cost of living index, at 83.3 (17% below average). West Virginia, Arkansas, Oklahoma, and Kansas also rank among the cheapest.
Alaska has the lowest overall tax burden at approximately 4.6% of income, thanks to no income tax and no sales tax. Wyoming (6.1%), Tennessee (6.3%), South Dakota (6.4%), and Florida (6.6%) also have very low total tax burdens.
Not necessarily. States with no income tax often make up the difference with higher property taxes or sales taxes. The best approach is to compare the total tax burden based on your specific income, spending, and property value.
Hawaii has the highest cost of living (192.9), followed by California (142.2), Massachusetts (135.0), New York (134.5), and Oregon (130.1).