The state with the lowest cost of living as of the first quarter of 2014 was Mississippi, according to Cheat Sheet. The cost of living index in Mississippi was 87.8; for the next-lowest state, Tennessee, it was 89.7.
Mississippi falls below national averages in other categories such as groceries, housing, transportation and utilities. Its housing index is 72.4, and the state median rent was $875 a month. In Tennessee, the housing index was 77.2. Other states with low costs of living were Kentucky at 90, Oklahoma at 90.4, Indiana at 90.7, Kansas at 91.3, Nebraska at 91.7, Alabama at 92.4, and Iowa and Arkansas at 92.5.