The Big Three Expenses And How Much They Cost In Each State, Updated

Back in the summer of 2018 I did a mapping post showing the costs of the big three expenses by state in America.  It was one of my most popular posts for a good year or two until it started waning in views.  The data used from that post was mostly from 2015 and 2016, so I’ve decided to do an update. 

If you’re not familiar, the big three expenses for the majority of U.S. households are housing, transportation, and food.

Whenever I’m asked for my one piece of advice to reach financial independence, it’s to save as much as you can on the big three.  If you do that you’ll be able to maximize your savings while still enjoy little things like your morning latte guilt free. 

So let’s get to the update…

 

Housing

The Census Bureau’s American Community Survey (ACS) data is the gold standard data used by many public-sector, private-sector, and non-profit organizations to allocate funding, track shifting demographics, and learn about local communities. 

For the map below, I pulled the 2019 ACS data which is the latest available.  You can read what it surveys regarding the cost of home ownership here.

Of note, it does not include repairs and maintenance which as any homeowner knows is a regular expense.  But I was unable to find maintenance data broken down by state that seemed credible. 

Here is the median monthly costs of home ownership by state in 2019 (click map for a larger version):

 

To get in front of what some might find objectionable about this data – yes I realize that housing prices have exploded across the country since the pandemic started.  The bottom line is that the 2019 ACS data is the best out there and in reality expenses are probably indeed higher in 2022. 

Sites like Zillow only provide home value data and do not have a window into what people are actually currently paying for their house.  Mortgage rates vary widely across the country and many are still paying higher interest rates from mortgages they signed years or even decades ago. 

Bottom line, I’m using the most recent reliable data I can find.

For rental rates, I used Apartmentlist.com this time because they seem to have a full-time data team and a sophisticated methodology that adjusts for many factors.  I won’t get into it here since it’s quite detailed, but you can read about it if you have geek tendencies here. 

That said, this map does not show average rental rates nor medium rates, it’s what they call estimated rates.  It’s is current 2022 data (click map for a larger version):

 

 

Transportation

I used data from Gobankingrates.com for car expense data, but I altered the data a bit.  As they explain on their page:

The study assumes the same MSRP ($37,876, the average transaction amount from Kelley Blue Book) with a 20% down payment and one year of financing payments before adding in estimated costs like gas (assuming you have a 14-gallon tank and fill up once a week) and repair. 

So Gobankingrates.com is adding $7,575.20, or 20% of $37,876 to the annual cost for every state.  Since the home ownership data above did not include the initial down payment made to a house, I took the $7,575.20 off for every state and divided by 12 to get monthly costs to try to be consistent. 

So this data includes car payments, but not initial money paid as a down payment.  It does include insurance, gas, repairs, and other costs, and note that they did not have data for Washington D.C. (click map for a larger version):

 

Food

Full disclosure, I found out during the research for this post that the data I used from the last post was incorrect.  I relied on a site called Maptitude for the average food cost data and it turns out their information was incorrect. 

This time I’m using official government data from the Bureau of Economic Analysis.  This data includes both groceries and eating out (click map for a larger version):

 

Of note, this data is for 2020 and food prices as a whole rose 6.3% in 2021 according to FDA estimates.  I could have just added 6.3% onto these numbers but the reason I look for geographic-specific data is to show differences by location, which are inevitable.  That FDA estimate is nation-wide.  

 

Total Costs

So I’ve shown the costs of the big three expenses – owning a house, renting, owning a car, and food by state.  I’ve also showed what the data include and don’t include and the timeframes. 

Even though we live in the so-called information age, this data is nuanced and more complex than meets the eye.  Assumptions have to be made by any data collector who attempts to measure things like this for a country as large as the U.S.A.  Nevertheless, it’s the best data I could find right now. 

That said, I thought I’d total up the big three for each date, even though as mentioned the timeframes of the data are not the same.  Yes it’s imperfect, but there is no perfect when it comes to these things so I’m right on track.  The data do show relative differences between the states and I’m quit sure those differences hold up in reality.

Since I have two different categories of residence for the “big 3” (home ownership and renting), I simply averaged those out for each state and that amount can be considered the average estimated cost of a residence, whether owned or rented. 

Here’s the map showing the estimated cost of a residence, car, and food by state (click map for a larger version):

 

The 5 most expensive states are:

• California $4,052
• Hawaii $3,950
• New Jersey $3,701
• Massachusetts $3,650
• New York $3,493

The 5 least expensive states are:

• West Virginia $2,481
• Arkansas $2.484
• Iowa $2,493
• Alabama $2,499
• Mississippi $2,521

 

Geoarbitrage

So there you have it financial warriors, some damn good looking maps that show the average monthly costs of the big three expenses – housing, transportation, and food.

I do lots of posts like this that show various aspects of money and finance from a location perspective.  So you’re considering Geoarbitrage in the United States be sure to check out my Geoarbitrage Resources Page which has tons of great tools to help you find your perfect location.

I hope you find these resources handy and I will continue to expose valuable tools that can help when deciding on a geoarbitrage strategy.