American citizens, are facing increased expenses in vital areas like groceries, utility bills, and fuel due to a 3.2% increase in consumer inflation over the past year, up to July. This situation is compounded by the latest job report, which revealed the addition of only 187,000 jobs in August, pushing unemployment up to 3.8%. These combined factors are putting pressure on the finances of single-person households.
To assess the cost of living, Recently a survey examining the annual living expenses for single individuals in all 50 states.
The States With the Highest Living Costs
- Hawaii $108,847
- Massachusetts $84,520
- California $76,810
- New York $70,081
- Alaska $67,061
To compile these statistics, GOBankingRates initially determined the average annual expenditures for an individual nationwide, using the most recent available data from the 2021 Consumer Expenditure Survey.
The platform then separated expenses related to housing, groceries, utilities, healthcare, and transportation, collectively termed as ‘essential items.’ These expense categories were then adjusted to the state level using data from the Missouri Economic Research and Information Center’s 2023 Q1 Cost of Living series.
Following that, the yearly expenses for each essential category were calculated and combined to determine the total annual cost of essential items. In the final step, the study applied the 50-30-20 budget rule, allocating 50% of one’s income for necessities.
Calculation of the Living Expenses
To determine the “living wage” for a single individual in each state, this total annual necessity expenditure was doubled.
A “living wage” is defined as the income required to cover 50% of one’s necessities, allocate 30% for optional or luxury spending, and reserve 20% for savings, according to Murray. Housing emerged as the most significant living expense in this analysis.
The study revealed that housing expenses significantly exceed other costs. Murray pointed out that Hawaii, Massachusetts, California, and New York are the four states with the highest housing costs. Also noted that Hawaii and Alaska likely experience higher prices due to their relative isolation, leading to increased shipping and import/export costs.
On the other hand, Mississippi offers a more affordable cost of living, with analysis suggesting that a single individual would need just $45,906 annually to achieve a living wage. This amount is less than half of what would be required for independent living in Hawaii.
Additionally, the findings show that the next least expensive states require less than $47,500 for singles to cover their living expenses.
The states providing the most budget-friendly living conditions for individuals are:
Rising expenses, including groceries and fuel, driven by a 3.2% inflation surge, are straining American finances. Analysis found Hawaii as the costliest state for singles at $108,847, with Mississippi offering affordability at $45,906.
Housing is a major expense, especially in Hawaii, Massachusetts, California, and New York. Isolated states like Hawaii and Alaska face higher prices due to shipping costs. More affordable states include Oklahoma, Alabama, Kansas, and Arkansas.