The cost of living in Arkansas is incredibly low compared to the national average cost of living. Home values are less than 50% of the national home average, mostly because of Arkansas’ rural feel and low minimum wage. A single adult needs just $32,336 per year to live in Arkansas.
From Hot Springs National Park to the Crater of Diamonds, it’s no wonder that Arkansas is known as “The Natural State.” Its residents enjoy the great outdoors, as well as a remarkably low cost of living.
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How high is the cost of living in Arkansas?
While it may not come as a surprise that Arkansas is an affordable state to live in, you might be shocked to hear that Arkansas is the second-most affordable state to live in, right behind Mississippi
. Its overall cost of living index is a low 79—21 points below the national average of 100. Rating cost of living by this point system-based index makes it easy to understand how each state stacks up when it comes to cost of living. By comparison, Oklahoma
has a cost of living index of 83.7, and Ohio’s
is 82.6—both well below the national average. On the other end of the spectrum, Hawaii has
the most expensive cost of living index at 192.9, while New York
and Oregon’s
are 139.1 and 134.2, respectively. As you can see, living costs vary hugely depending on where you live in the US. Arkansas is a great place to live if affordability is a top priority, as it’s nearly at the bottom of the cost-of-living spectrum.
Let’s put that in terms of real costs—like food, healthcare, housing, transportation, and more. Here’s what these essential expenses cost in Arkansas, as compared to the national average.
Food: $279 to $1000 per month
Food sits at the top of our essential cost of living list. Here, we’ll only be covering your monthly grocery bill, so takeout and restaurant costs are excluded.
MIT’s Living Wage Calculator
shows that the annual cost of food in Arkansas ranges from $3,351 to $11,999 depending on how large your family is, your income range, and where you live in Arkansas. A single adult pays around $279 per month on groceries, while a family of five with two working adults could shell out $1,000 per month on their grocery costs! To compare, the Bureau of Labor Statistics found that in 2020, the average monthly grocery bill for US households was approximately $411.
Again, these costs only include groceries. Your morning Starbucks order, weekly McDonald’s treat, and restaurant splurges will all cost extra!
MORE: Arkansas renters insurance
Healthcare: $516 per month
The Bureau for Economic Analysis reported that in 2020, the average annual healthcare cost for one person in Arkansas is $6194. This cost breaks down to a monthly expense of$516, which is slightly higher than the national average of $477 per month.
Healthcare needs are vastly different from person to person, so this average cost could fluctuate quite a bit depending on your health. For example, if you or another family member needs expensive prescriptions or is due for major surgery, your healthcare costs will be far more expensive than a household with few prescriptions and no major healthcare procedures.
Housing: $537 to $1,167 per month
Arkansas’ low housing costs are what makes this state so affordable. The median home value in Arkansas is just $145,300, which is less than half of the national median—$291,700.
Monthly costs depend on what your housing situation is, but costs are pretty affordable across the board. Let’s take a detailed look at monthly housing costs by housing type:
Average mortgage payment: $984
Average studio rent: $537
Average one-bedroom rent: $586
Average two-bedroom rent: $736
Average three-bedroom rent: $991
Average four-bedroom rent: $1,167
These numbers are state averages and don’t account for the city you live in. You’re likely to pay higher prices if you live in Fayetteville
, where the median home value is $232,100 and the average rent for a one-bedroom apartment is $860. How do Arkansas housing costs compare to the rest of the country? The typical home value in the US is more than double Arkansas’ median at $337,560. The nationwide rent average is at an all-time high at $1,904 per month, which is significantly more than the average monthly four-bedroom rent cost in Arkansas.
Transportation: $150 to $867 per month
Transportation in Arkansas can be more costly than other essential living costs because there are not many public transportation options available. The cost of transportation varies widely depending on a few factors, such as whether you own a car or if you commute to work each day.
Arkansans pay anywhere from $150 to $867 per month on transportation costs. For context, the national average for a two-person household is $818 per month.
Let’s put those numbers into perspective to understand where that money is going:
Average monthly public transit pass: $37.50
Average cost of a gallon of gas, August 2022: $3.41
MORE: Arkansas electric vehicle incentives
How much you need to live comfortably in Arkansas: $32,336 to $63,021 per year
Considering the figures presented above, an individual with no dependents needs to make at least $32,336 before taxes or $15.55 per hour to support themselves in Arkansas. A family of five requires at least $63,021 before taxes or $37.80 per hour to live in Arkansas. Considering Arkansas’ minimum wage of $11 per hour, it can be tough to make ends meet, even in one of the nation’s most affordable states to live in.
Making beyond the required wage and living comfortably may be challenging. Check out the list below to see how some basic non-essentials compare in cost to the national average:
Average cost of a date: $85.98 (US average: $116)
Average cost of a night at the movies: $9.50 (US average: $10.61)
Average cost of a Big Mac: $3.95 (US average: $3.99)
A Magic Springs ticket: $59.99 (US average theme park ticket price: $91)
Average sales tax: 9.47%(US average: 5.09%)
A comfortable life looks different to everyone, and you may be able to get by comfortably on just $32,336 per year. Thankfully, non-essentials cost significantly less in Arkansas compared to the rest of the country, but you’ll likely need more than minimum wage to indulge in them.
The Arkansas cities with the lowest cost of living
Thankfully, nearly every city in Arkansas has a cost of living index that’s way below the national average. There are a few stand-out cities in Arkansas when it comes to unmatched affordability though. Here’s a list of the top five most affordable cities in Arkansas according to their cost of living index (COLI) scores:
Fort Smith
(COLI: 75): Fort Smith is Arkansas’ third-largest city and is home to the University of Arkansas. Big city amenities, low crime rates, and mild weather make Fort Smith a great place to live. Jonesboro
(COLI 80.4): Jonesboro is the fifth-largest city in Arkansas with great parks for hiking, camping, and fishing at the edge of town. Walnut Ridge
(COLI 71.7): This quaint Arkansas town is located along “Rock n’ Roll” Highway 67, and celebrates its musical history with the outdoor guitar walk park and the annual Beatles at the Ridge music festival.De Queen
(COLI 72.4): This small community is perfect if you like quiet rural living with easy access to fishing, boating, camping, and hiking. Pocahontas
(COLI 72.7): Pocahontas is a small town with many beautiful historic buildings and is the county seat of Randolph County.
If you’re on the hunt for affordable living in the US, Arkansas has many communities with cost of living indexes that are well below the nationwide average. Keep these five cities in mind when looking for an affordable home in Arkansas.
MORE: Homeowners insurance in Arkansas
How to easily find home and car insurance in Arkansas
Arkansas living may be affordable, but that doesn’t mean you can’t save even more on your insurance costs. On average, Arkansans pay $239 more than the national average for auto insurance. The good news is that you can actually save money by shopping for insurance.
That said, switching providers comes with a lot of work—but it doesn’t have to! Jerry makes shopping for a new insurance policy a breeze.
Simply download the app, and Jerry
does all the paperwork for you and even helps cancel your old policy. Download the app, answer a few questions, then set your insurance updates to autopilot. Jerry will even send you new quotes every six months, so you always have the best policy at the right price. “When using Jerry
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