Cost of Living

PUBLISHED AUGUST 2023

Do the math: The average for household expenditures in America in 2021, according to Bankrate.com, was $66,928, with housing itself accounting for a third of that—$22,624.

With inflation running at levels most of us have never witnessed—that household spending figure was up 9.1 percent in 2021—a clear picture begins to emerge of winners and losers in the economic sweepstakes game: The regions with the lowest housing costs fare significantly better than their pricier counterparts.

Welcome, then, to Missouri. It’s a place where one can live a comfortable lifestyle, even on a wage well below coastal compensation rates, thanks to a low cost of living that makes the Show-Me State one of the nation’s most affordable places to call home. In fact, only five other states have cost-of-living indicators that beat Missouri’s.

Using 100 as a national average across six metrics, the index placed relative costs in Missouri at 89.1. In other words, for every $100 expended by residents nationwide, Kansans pay $89.10, a savings of nearly 11 percent over the rest of the nation.

That starts to look mighty attractive compared to places like Hawaii, the most expensive state and with an index of 184.0, more than twice the cost of life in Missouri. Or for somewhere less exotic, look at the nation’s capital, where the cost of living is more than half again the national average, with a score of 152.5. 

Powering that performance is housing, a category where Missouri is 12th, with a reading of 79.9, based on that same 100 as a national average.

What’s that look like compared to other states? Well, consider Washington, D.C., the most expensive housing market in the lower 48 states. Census estimates for 2022 show that the median home value in that market is $615,692. In Missouri? It’s about $171,800, per the Census, or $227,347 for the typical (not average) home, according to Zillow, which may be a closer reflection of true market conditions at the time.

In either case, housing in the nation’s capital easily runs three times what the average Missouri resident can expect to pay. And the factor is more than 2x in the states of Colorado, Washington, California, and Massachusetts.

Housing, though, isn’t the only factor creating that low-cost edge. Missouri also enjoys a No. 7 ranking for lowest transportation costs, No. 8 for health costs, No. 12 for grocery costs, No. 20 for utility costs, and near rock bottom at No. 4 for miscellaneous-item costs. 

In the miscellaneous category, for expenses that don’t fit into those metrics, only Oklahoma fares better than Missouri’s score of 91.3.

Grocery costs (95.4 compared to 100) are held in check by virtue of living where a lot of the nation’s protein chain originates—cattle ranching, meat-packing, pork processing, poultry farms, and processors—all have major operations in Missouri. Fresh avocados for your toast? Not so much, but with the savings on dietary pillars, there’s plenty left over to splurge.

Transportation costs overall (91.86 vs. 100) are comparatively low because people here tend to live near their work. It’s a measure of how spoiled Missourians are that, in the urban centers, a 20-minute commute in these parts and the gallon of gas consumed are considered impositions. But compare that to day-killing and pricey commuter rail options in the east and the often-insufferable highway conditions in the west. 

All of this makes a difference in various ways. For businesses, it means the ability to acquire high-level talent at a significant discount. That’s a serious competitive advantage right there, especially for law or accounting firms that also have coastal-market operations. For workers, it means enjoying a higher standard of living within a lower tax bracket, compounding the savings from a low-cost environment.