A new study reveals that the cost of living comfortably in the United States varies greatly from state to state. In Mississippi, the most affordable state, a family of four needs at least $186,618 a year to meet the threshold of dedicating 50% of their income to necessary costs, 30% to discretionary wants, and 20% to debt payments and savings. On the other end of the spectrum, Massachusetts is the most expensive state, requiring a family of four to earn more than $300,000 per year to live comfortably.
The high cost of living in Massachusetts is primarily attributed to the expenses associated with raising children, particularly in Boston, where child care alone can cost $23,800 annually. While not as high as Massachusetts, the costs of living in Vermont, New Jersey, and Montana are rapidly catching up, with double-digit growth rates from 2024. However, six states — Hawaii, New York, Georgia, Delaware, Michigan, and Iowa — saw a decrease in the overall cost of living compared to the previous year.
Cost differences by state
The study, conducted by SmartAsset, utilized data from the Massachusetts Institute of Technology to estimate the annual cost of essentials in each state, including housing, food, and childcare for two working adults and two children. In Virginia, a single adult needs to earn $106,704 a year to live comfortably in 2025, a 6.74% increase from the previous year.
For a family of four, the required annual income is $241,696, placing Virginia 17th in the country for the income needed to support a family of this size. Similarly, in Indiana, a single person needs to earn $86,570 annually to live comfortably, ranking the state 40th out of all 50 states for the highest salary required. For a family of four, Indiana is the 29th most expensive state, requiring an annual income of $220,230, up from $206,003 in 2024.
The study’s findings highlight the disparate cost of living across the United States and emphasize the need for careful financial planning and budgeting to ensure families can maintain a comfortable lifestyle.