In 2014, Kentucky was the cheapest state to live in, according to CNBC's cost-of-living index. In Kentucky, the average home price is $244,299, and a gallon of milk costs $2.19, as of 2014.Continue Reading
The second cheapest state to live in is Arkansas, while the third through fifth cheapest are Oklahoma, Louisiana and West Virginia, based on the CNBC calculations.
Many factors determine the cost of living in a particular state. Most importantly, the cost of housing is considered when determining cost of living. For instance, the median monthly rent in Arkansas is $475 per month, while the median monthly rent in New York is $1607 per month, and the median monthly rent in San Francisco, California, is $1431, according to an About.com table of rents and utilities posted as of 2015.
Other important factors when determining the cost of living in a particular state are food costs, utility rates and state tax rates. Finally, when assessing cost of living, consider the cost of transportation; while New York City, New York, is one of the most expensive places in the United States to live, commuting to work on the subway may be cheaper than living in rural Kentucky and driving an hour per day to get to work, especially if gas prices are high.Learn more about Household Budgets