How much does a single Kentuckian need to earn to get by and save? What one analysis says
Kentucky ranks among the five states with the lowest cost of living, according to a recent analysis by personal finance website GOBankingRates.
Specifically, the website looked at what a single person living alone needs to make in each state in order to meet their basic needs, while also having some money left over for savings and discretionary spending.
It goes without saying the cost of living in some states, like California and New York, is higher than less populated areas like Wyoming or West Virginia. However, as the GOBankingRates analysis points out, prices across the board are up significantly from where they were just one year ago.
“Whether you’ve shopped for groceries, gas or even a car in the past year, you know that prices have risen significantly since 2022,” the website states. “The Consumer Price Index report from July 2023 showed that prices on the ‘all items index’ have increased 3.2% in the past 12 months.”
How much do you need to make to live in Kentucky?
According to GOBankingRates, a single Kentuckian needs to make $47,318 annually to meet expenses and have a little left over.
That means the commonwealth has the fifth lowest cost of living in the country, according to the website’s analysis. Kentucky ranks just above Kansas ($47,379) and just below Arkansas ($47,111).
Mississippi takes the No. 1 spot as the state with the lowest cost of living at $45,906 annually. That’s followed by Oklahoma ($46,024), Alabama ($46,577) and Arkansas.
Recent analyses have varied on the affordability and livability of the Bluegrass State. A WalletHub analysis released last summer found the state was among the worst for millennials. The same company, in a separate study, found that while affordable, Kentucky had a lower life expectancy, a factor helping to plummet the state’s ranking to the worst in the U.S. for retirees.
Which US states have the highest cost of living?
Hawaii takes the No. 1 spot for the highest cost of living. A single person living in the Aloha State would need to make at least $112,411, according to the GOBankingRates analysis, released Aug. 28.
According to the company, housing costs account for up to 50% of a living wage, meaning higher housing costs drive up what wage earners need to make to get by.
Here are the 10 states where the cost of living is the highest in the nation, per GOBankingRates:
Hawaii: $112,411
Massachusetts: $87,909
California: $80,013
New York: $73,226
Alaska: $71,570
Maryland: $67,915
Vermont: $65,923
Oregon: $65,763
Washington: $65,640
New Jersey: $64,463
Methodology
According to GOBankingRates, its researchers used data from the U.S. Bureau of Labor Statistics’ 2021 Consumer Expenditure Survey, which is the latest available, for a single person.
With data in hand, GOBankingRates calculated the annual cost of necessities based on more data from the Missouri Economic Research Center’s 2023 first quarter “Cost of Living” series. Researchers then doubled the total annual cost of necessities to determine a living wage that includes enough money for discretionary spending and saving for future expenses.
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