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):

Big Three Expenses

 

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):

Big Three Expenses

 

 

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):

Big Three Expenses

 

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):

Big Three Expenses

 

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):

Big Three Expenses

 

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.

 

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Dave @ Accidental FIRE

I reached financial independence and semi-retired in my mid-40's through hard work, smart living, and investing. This blog chronicles my journey and explores many aspects of personal finance including the psychological and behavioral factors that drive our habits.

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16 Responses

  1. wallies says:

    Ha! West Virginia, here I come! I would like to see “The Myth of Increasing Violent Crime in America” updated through 2021.

    • Dave @ Accidental FIRE says:

      West Virginia is gorgeous! Being only a few hours drive from WVA one of my big regrets is not buying a cabin in the woods 20 years ago when I first wanted to. The D.C. area has become so wealthy the prices have been driven up ridiculously. Back in the early 2000’s I could have bought one for way less, but of course I made way less then too and wasn’t FI so it’s all relative I guess.

      As for the violent crime post, we’ll see. The official FBI page shows that 2020 saw an increase over 2019 but not a huge one. Rates are still basically half of what they were in the early 1990’s which was the point of my post – that it’s a myth that violent crime has increased over time (a longer span of time). If they release the 2021 data in a timely matter I’d consider an update but they’re slow.

  2. those ny state stats are so skewed by the enormous expenses in new york city, but that’s a hard one to overcome. i can say our core expenses are extremely reasonable. with a paid off house they only come to about 24k for two people with two paid off cars. even if you tacked on a $1500 mortgage $3500/month would not be terrible. of course that would buy you a hovel in nyc coupled with the fact you’d have to live in nyc.

    • Dave @ Accidental FIRE says:

      Yeah for sure NY is skewed by NYC as other states can be skewed by one expensive city. I have friends in other parts of NY state and it can still be pricey tho, mainly taxes. Your amounts for Buffalo seem reasonable. As for NYC, I love visiting but leaving is nice too, haha.

  3. Great post – I love analyzing nerdy data like this! I was pleasantly surprised to see that the 4 states which are the top contenders for our next home base are all lower cost than where we currently live (Arizona). Which is great, because some (like VT) are known for being expensive.

    As Freddy pointed out, one expensive city can certainly skew the data. The other big cost to consider when comparing states would be state taxes (assuming that property taxes are included in the homeowner costs – that part wasn’t clear).

    • Dave @ Accidental FIRE says:

      Woo-hoo, that’s great! Yes Vermont is expensive and a heavy tax state but it’s soooooo beautiful. It’s still on my list for retirement. And yes real estate taxes are included in the Census home ownership data, it lists these costs in the methodology link that I included – “mortgage payments, rent payments, condominium and other fees, real estate taxes, and premiums for home owners insurance. Also, for mobile homes, installment loan payments, site rent, license and registration fees, and personal property taxes.”

      Thanks for the comment!

  4. I love this stuff. Thanks for updating a killer post. Geoarbitrage is real, and a valuable tool to have in anyone’s toolbox who’s looking to escape the rat race as early as possible.

  5. Nicole says:

    Thanks for the update. It would be interesting to cross reference this info with healthcare costs, obesity rates and other ‘quality of life’ metrics.

    • Dave @ Accidental FIRE says:

      I do have an older post that details state spending on healthcare, but that’s easier to do because the state is a single source to track. As for consumer healthcare costs, there’s so many variables between folks getting it through their employer, or on the ACA, or through Medicare, or a combo of all of these. I spent some time looking for a good data source a while back and may try again in the future. And as for obesity, that’s one I’ve considered doing but it’s stretching it for a FI blog. We’ll see… thanks for the comment!

  6. Mr Fate says:

    Love these data posts! Very interesting information here for sure, the auto expenses seem rather outlandish, but than again so are people’s behaviors when buying cars! Food prices also seem high, but eating clean is always a bit cheaper. Anywhoo, just happy to be out of CA!

    • Dave @ Accidental FIRE says:

      Dude, the amount of money wasted on cars in America… people spending $40k or more when all they need to spend is $10k or less. America’s car obsession is the financial ruin for milions.

  7. Mr. Tako says:

    Great post Dave! It’s good to see an update to your original post! I currently live in one of those “high cost” states, but we’ll be moving to one of the cheaper states soon. Thanks for the data.

  8. Joe says:

    Great data! It’s interesting to see the quick drop off in the top 5. CA and HI are much more expensive than other states.
    Texas and Colorado are getting more expensive. I wonder if that will slow down the migration to those states.
    Fortunately, our big 3 expenses are lower than average. We live in a duplex and rent out one unit. We also don’t drive much. Our food expense is right in line with the data.

    • Dave @ Accidental FIRE says:

      Wow I would have thought your food expenses would come in lower than the average but then again seeing all the amazing delicious meals you post it really doesn’t matter in the end 🙂

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