Southern States Offer the Most Bang for Your Cost of Living Buck

Lexington, KentuckyBy Jennifer Leigh Parker, CNBC.com

Everyday expenses have a direct effect on the price of doing business, which is why we rank the cost of living for each state in CNBC's Top States for Business.

So where would a business find a state where the cost of living is low? Our survey results show states with the best bang for your buck are in the South.

Kentucky tops our list with 50 out of the 50-point total for this category. Moving up from 3rd place last year, the state boasts the lowest costs in the nation for groceries and health care, with extremely competitive costs for housing, transportation and utilities -- all three part of the basic criteria used for this ranking.


Related Links:
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Full Coverage: America's Top States for Business 2011


Runners up, however, are hot on the heels of the Bluegrass state. Tennessee (2/1) and Oklahoma (3/1), finished only two points behind, having tied for first place last year.

They are followed very closely by Arkansas (4/3) and Texas (5/8). The Lone Star state gained ground this year, jumping up three spots, thanks to low-cost groceries and gasoline.

Comparative Costs

As for the most expensive states, we've got some repeat offenders: Hawaii (50/49), Alaska (49/47), and California (48/49) each ranked in the bottom three last year. Compare the cost of the American Dream: To drive the kids to school from your single-family home in, say, San Jose, Calif., the median price will set you back $545,000 as of the first quarter of 2011, and $4.09 a gallon, according to a recent spot check on gasbuddy.com.

Louisville, Kentucky homeIn contrast, residents of Louisville, Kentucky pay a median $125,000 for their home, while the trip to school costs only $3.85 per gallon.

However, that old rule still applies: You get what you pay for. The top states in this category also happen to be the lowest ranking in the Quality of Life category.

The state coping with the biggest increase in costs is South Dakota (26/5). There, costs are relatively high for health care, but those for housing and utilities have risen as well. But higher costs parallel higher quality, as South Dakota broke into the top five rankings for Quality of Life.

Purchasing Power

Regardless of the rankings, the impact of inflation can be felt across all states. For example, the price of gasoline has jumped with the volatile price of crude oil. Consumers in Nashville, Tenn., have seen gas prices jump 42% since this time last year, while Honolulu residents are paying only 15.3% more for gas than a year ago.

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113 Comments

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gilbertriley3

Great bargains... but you have to live in those states.

July 01 2011 at 12:12 PM Report abuse rate up rate down Reply
Mike

I've lived in Fla, GA, NC, plus OH, MI and Colorado and there are good and bad parts of every state and region. People shouldn't paint any area with a broad brush and no one should make a claim about any city or state unless they have spent an extended amount of time there. Very disappointed that every discussion on HP seems to devolve into a racial/racist rant. Not every southerner is a racist redneck and not every northerner is an elitist Liberal. Each person has keys that they evaluate to determine if it is a good place to live i.e weather, education, cost of living, cultural events, home prices, healthcare etc...

July 01 2011 at 11:44 AM Report abuse +1 rate up rate down Reply
Mike

Love to see an analysis that includes union strong states versus right to work states also. Seems like that kind of stuff should be factored into the cost of living, jobs, quality etc...

July 01 2011 at 11:29 AM Report abuse +1 rate up rate down Reply
mshalett

This is all well and good but the public education system in Tn is BAD-BAD-BAD. The powers that be don't want an educated public and will do anything to keep the general pubulation uneducated. I live in TN but , thank God, didn't grow up here and was educated somewhere else. The quality of life in TN is good but the education level is very poor.

July 01 2011 at 9:10 AM Report abuse rate up rate down Reply
2 replies to mshalett's comment
savemycountry911

How are those ghetto schools up North? I'll can tell you. They are war zones.

July 01 2011 at 9:13 AM Report abuse rate up rate down Reply
savemycountry911

That would be the Dems who control the public by keeping them dumb.

July 01 2011 at 9:20 AM Report abuse +1 rate up rate down Reply
aramirez575

The cost of living & housing might be much lower for the souther states, but so are people's salaries. It is all relative.

July 01 2011 at 7:28 AM Report abuse rate up rate down Reply
mootown9

Enjoy your 6 bedroom, 4 bathroom mansions in your southern backwaters, dumb hicks. I'll stick with my $2500 two bedroom in NYC with 5 star cuisine until 2 am. It's why it costs $2500 here and $300 in Mississippi, you bumkins!

July 01 2011 at 2:14 AM Report abuse -9 rate up rate down Reply
6 replies to mootown9's comment
alucky1128f8@aol

GOODNIGHT FROM THE GREAT RED STATE OF SOUTH CAROLINA !!!!!!. GOD BLESS YOU AND YOURS AND GOD BLESS OUR MILITARY !!!!!!!.

July 01 2011 at 12:15 AM Report abuse +4 rate up rate down Reply
alucky1128f8@aol

ROCKSIN, I LIVE NEAR LIMESTONE COLLEGE, THEIR ARE NO MOBILE HOMES HERE, ONLY HISTORY OF THE GREAT SOUTH. YOU MUST BE THINKING OF YOUR OWN PLACE !!!!!!!.

July 01 2011 at 12:13 AM Report abuse +4 rate up rate down Reply
1 reply to alucky1128f8@aol's comment
obamarocksin2012

oh yeah , the great story of the south, how they wanted slavery and fought for it, AND LOST !!!!!!!!!!!!! and never quite got over it. OBAMA ROCKS IN 2012 thats what it says , If you were literate, you could read it. SC might be getting a little better since alot of people from outside there are moving in and changing things for the better.

July 01 2011 at 12:46 AM Report abuse -7 rate up rate down Reply
2 replies to obamarocksin2012's comment
savemycountry911

Stay in the ghetto where you belong. You president is ruining the North, too.

July 01 2011 at 9:11 AM Report abuse rate up rate down
savemycountry911

They had slaves in the North, too.

July 01 2011 at 9:15 AM Report abuse rate up rate down
alucky1128f8@aol

ROCKSIN, WILL USE THE RACE CARD ON YOU ,JUST LIKE OBAMA DOES !!!!!!!.

July 01 2011 at 12:10 AM Report abuse +3 rate up rate down Reply
alucky1128f8@aol

BE CAREFUL EVERYONE , ROCKSIN THINKS OBAMA WILL WIN IN 2012. WRONG !!!!!!!.

July 01 2011 at 12:09 AM Report abuse +5 rate up rate down Reply