Hawaii has emerged as the most expensive state to live in, according to the latest data from doxo, an online bill payment service that recently released its 2024 Cost of Bills Index. This comprehensive report compares average household costs across states and major U.S. cities, providing valuable insights into the financial burden faced by residents in different parts of the country.
The Cost of Bills Index tracks data on the 10 most common household bills, which include utilities, phone and cable, auto loans, auto and health insurance, as well as rent and mortgage. According to the report, the average U.S. household spends $2,126 a month on these bills, amounting to an annual expenditure of $25,513. However, these expenses can vary significantly depending on where one lives.
Hawaii tops the list as the most expensive state, with residents spending an average of $3,091 each month on household bills. This figure is a staggering 45% above the national average. The high cost of living in Hawaii is reflected in the state’s median household income, which stands at $94,814, according to the U.S. Census Bureau. The report highlights that the average monthly mortgage payment in Hawaii is $2,576, while the average rent is $1,983, making it a challenging environment for both homeowners and renters.
The top 10 most expensive states based on monthly costs, according to the report, are:
- Hawaii
- California
- Massachusetts
- New Jersey
- Maryland
- Washington
- New York
- Connecticut
- Colorado
- New Hampshire
On the other end of the spectrum, West Virginia ranks as the least expensive state to live in, with residents spending an average of $1,596 per month on household bills. This is 25% below the national average. The median household income in West Virginia is $55,217, as reported by the U.S. Census Bureau. In this state, the average monthly mortgage payment is $961, while the average rent is $846, making it a more affordable option for those looking to reduce their living expenses.
The top 10 least expensive states based on monthly costs are:
- West Virginia
- Mississippi
- Arkansas
- Kentucky
- Oklahoma
- Indiana
- Alabama
- Missouri
- South Dakota
- Kansas
The concept of the cost of living is essential in understanding these rankings. The cost of living represents the amount of money required to cover basic expenses such as housing, utilities, groceries, transportation, and healthcare. This figure can vary widely depending on the state or region and is often influenced by the local economy and wage levels. In areas with a higher cost of living, residents typically earn more to offset the increased expenses, but this does not always equate to a higher quality of life.
Cost-of-living index scores compare specific areas to the national average, providing a snapshot of how expensive or affordable it is to live in a particular place. There isn’t one federal index, and various indices may calculate the cost of living differently. However, most indices consider housing, utilities, groceries, transportation, healthcare, and other goods and services in their calculations.
Understanding the cost of living is crucial for anyone considering a move or evaluating their financial situation. It provides a clearer picture of what to expect in terms of daily expenses and can help individuals and families make informed decisions about where to live and how to manage their finances effectively.