12 Cheapest States to Live in America, According to Dave Ramsey
Not all states are created equal, especially when it comes to your wallet. If you want to stretch your dollar, you’ve got to know where to look, and stop complaining about how unaffordable everything is when smarter options exist.
According to Dave Ramsey’s cost-of-living data, some states make life a whole lot cheaper. These places have much lower costs across essential expenses, meaning your money works harder for you.
So, which states top the list? We’re counting down the 12 most affordable spots according to Ramsey’s findings. Housing, groceries, transportation, healthcare, it all adds up. But in these states, the numbers work in your favor.
If relocating is on your radar, or you’re just curious about where you can live for less, this breakdown has the answers.
Table of Contents
How the Cost of Living Was Measured
To figure out which states are the most affordable, Ramsey’s team analyzed key expenses like housing, groceries, utilities, transportation, healthcare, taxes, and even the little things like haircuts and movie tickets.
The cost of living index, published by the Council for Community and Economic Research (C2ER), provides a detailed comparison against the national average. Every number you’re about to see reflects the most up-to-date data as of January 2025.
Now, let’s count down the 12 states where life costs less, and financial freedom comes faster.
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12. Georgia
Georgia sneaks onto Ramsey’s list of the most affordable states, and for good reason. While home prices are creeping up, the cost of living is still 8.6% below the national average, making it one of the best deals in the Southeast.
The median home value sits at $323,000, which is on the higher side compared to the other states on this list, but property taxes remain relatively low. Renters pay a median of $1,945 per month, so while it’s not the cheapest place to rent, wages help balance it out.
The median household income is $74,632, which means people here have a bit more financial breathing room than in states where wages lag behind living costs.
With Atlanta’s booming job market and plenty of rural areas where costs are even lower, Georgia offers a mix of opportunity and affordability.
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11. Indiana
Indiana earns its spot with a cost of living that’s 8.8% below the national average. This is a state where you can still buy a house without signing your soul away. The median home value sits at $225,900, and the median rent is an affordable $1,350.
That means more people can actually own their homes instead of pouring money into rent. The median household income here is $69,477, and with lower taxes than many other states, Hoosiers keep more of what they earn.
If you’re in Indianapolis or a smaller town, everyday expenses like groceries and utilities are consistently low. For those looking to escape overpriced cities while keeping access to job opportunities, Indiana makes a strong case.
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10. Nebraska
Nebraska doesn’t always get the spotlight, but Ramsey’s data shows it deserves a serious look. The cost of living is 9% below the national average, making it a smart choice for budget-conscious people.
The median home value is $245,200, and renters pay about $1,307 a month, reasonable numbers for a state with a solid economy. Speaking of income, households here bring in a median of $74,590, one of the higher figures on this list.
That means people aren’t just surviving, they’re actually able to save and invest. With a strong agricultural sector, a growing tech scene in Omaha, and a relatively low tax burden, Nebraska quietly delivers on affordability and opportunity.
9. Tennessee
Tennessee has been climbing the ranks as an affordable, no-income-tax state with a thriving economy. The cost of living is 9.5% below the national average, making it an attractive option for those looking to escape higher-cost areas.
Home prices are a little steeper here, with a median value of $307,300, the highest on this list. Renters pay around $1,750 a month, which is also on the higher end. But don’t let that scare you off.
With a median household income of $67,631 and no state income tax, Tennessee still offers one of the best deals in the country. Cities like Nashville are booming, while smaller towns keep things even more affordable.
If you want a place with strong job prospects and a lower tax burden, Tennessee delivers.
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8. Iowa
Iowa quietly makes its way onto this list with a cost of living 9.8% below the national average. While not as flashy as some other states, it offers rock-solid affordability.
The median home value is $213,300, and if you’re renting, you’re in luck, $1,100 gets you a place, making it the lowest rent on this list. That’s a big deal for anyone tired of watching rent eat up their paycheck.
With a median household income of $71,433, Iowans keep more of their earnings, and the state’s low unemployment rate means jobs are stable.
The cost of everyday essentials like groceries, utilities, and transportation stays comfortably low, making it one of the best places for financial peace of mind.
7. Missouri
Missouri locks in its spot with a cost of living 11.2% below the national average, according to Ramsey’s rankings. That means your paycheck stretches further, when you’re buying groceries, paying for gas, or covering rent.
Speaking of housing, the median home value sits at $233,600, which is still a bargain compared to many states. Renters pay around $1,300 a month, making it one of the better states for affordable living.
The median household income lands at $68,545, keeping wages in a reasonable balance with costs. Kansas City and St. Louis offer big-city amenities at a fraction of what you’d pay on the coasts, while smaller towns like Springfield keep things even cheaper.
Missouri’s central location also means lower transportation costs, adding to the financial appeal.
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6. Alabama
Alabama doesn’t just make the list, it makes a strong case for anyone looking to cut costs. The cost of living runs 11.2% below the national average, which is no small thing when every dollar matters.
Homes sit at a median value of $216,600, making it a place where homeownership isn’t some distant dream. Renting isn’t too painful either, with a median monthly rent of $1,445. Households bring in around $62,212 a year, which, paired with lower living expenses, creates a solid balance.
No state income tax on Social Security makes it a hotspot for retirees, while major cities like Birmingham and Huntsville provide job opportunities without the financial strain of bigger metro areas.
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5. Arkansas
Arkansas lands in the top five on Ramsey’s list for a reason, it’s cheap. The cost of living sits at 11.3% below the national average, making it one of the most wallet-friendly places in the country.
Buying a house here? The median price is just $195,700, which beats out many other states on this list. Renters pay around $1,375 per month, and the median household income is $58,700.
While wages aren’t the highest, lower housing prices and everyday expenses make up for it. Utilities and groceries are consistently affordable, and if wide-open spaces are your thing, land is still dirt cheap.
Be it settling in Little Rock or a quiet rural town, Arkansas keeps costs down without sacrificing livability.
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4. Mississippi
Mississippi keeps things affordable with a cost of living 12.3% below the national average. If homeownership feels out of reach elsewhere, this is one of the best places to make it happen.
The median home value is just $169,800, one of the lowest on the list. Renters pay about $1,450 a month, and the median household income is $54,203. While incomes trend lower, the overall cost of living keeps things manageable.
Food, utilities, and transportation stay below national averages, and the state’s property taxes are some of the lowest in the country. That combination makes it a solid choice for those looking to keep expenses down while building financial stability.
3. Kansas
Kansas doesn’t get enough credit for how affordable it really is. The cost of living runs 12.5% below the national average, putting it among the most budget-friendly states. The median home value sits at $243,200, while rent lands at a reasonable $1,215 per month.
The median household income is $70,333, meaning people here tend to have a little more financial breathing room. Living in cities like Wichita or Topeka keeps expenses lower than many other metro areas, and transportation costs remain below average.
Kansas also avoids the property tax spikes seen in other states, which makes homeownership even more attainable.
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2. Oklahoma
Oklahoma keeps life affordable with a cost of living 13% below the national average. That alone makes it a standout, but the low housing costs are where it really shines. The median home value is $208,600, and rent sits at about $1,400 per month.
With a median household income of $62,138, wages hold up well against the cost of living. No massive property taxes, no sky-high grocery bills, and no absurd gas prices, Oklahoma keeps things reasonable across the board.
Major cities like Tulsa and Oklahoma City provide job opportunities while maintaining a cost structure that doesn’t drain bank accounts. If keeping more of your paycheck sounds appealing, Oklahoma delivers.
1. West Virginia
West Virginia takes the top spot in Ramsey’s list as the most affordable state in the country, and it’s not even close. The cost of living is 14.4% below the national average, making it the ultimate place to stretch a dollar.
Housing is dirt cheap, with a median home value of $163,700, the lowest in the U.S. Renters pay about $1,100 a month, making it the best state for affordable housing.
A median household income of $55,948 might seem modest, but everyday expenses remain so low that it balances out. Property taxes barely make a dent, and groceries, utilities, and health care all stay below national averages.
West Virginia might not get the same attention as other states, but when it comes to affordability, no place does it better.
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If crushing high costs is the goal, these states make it happen. Ramsey’s list proves that affordable living isn’t a myth, it’s just about knowing where to look.
Housing, groceries, utilities, and transportation all take less of your paycheck in these spots, meaning more money stays in your pocket. Moving isn’t for everyone, but if saving money and building wealth faster sounds good, these states make a strong case.
The numbers don’t lie, living smart starts with living where your dollar goes further.
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