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These Are America's 10 Cheapest States to Live in as Inflation Surges

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  • Inflation is almost impossible to escape nowadays, but some states are more affordable than others.
  • Working families are looking to live in places where they get more for their dollar.
  • CNBC’s exclusive America’s Top States for Business study ranks the states based on an index of prices for a broad range of goods and services.

Inflation is everywhere, and it is hitting just about everything we buy. With prices of goods and services around the world rising at rates not seen in 40 years, bargain hunting is a national pastime. The latest Consumer Price Index for June came in even hotter than expected, at 9.1%.

Companies are hunting too — and in many cases moving their operations to places where their money, and that of their employees, goes further. That's why CNBC's annual America's Top States for Business study includes Cost of Living in our formula for ranking the states.

We rate the states based on an index of prices for a broad range of goods and services. These ten states were the cheapest to live in over the past year. Also listed are average prices for selected items last year based on the 2021 Average Cost of Living Index by the Council for Community and Economic Research, C2ER. Prices have only gone higher this year, so we have also included the current regional inflation rate year-over-year from the U.S. Bureau of Labor Statistics.

10. Arkansas

Hot Springs, Arkansas.
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Hot Springs, Arkansas.

Arkansas calls itself The Natural State, but sometimes you just need a burger. You're in luck here, because a McDonald's Quarter Pounder with Cheese in Hot Springs will cost you just $4.13, or about 30% less than it would cost you in New York City. Later, when you want to get your cholesterol checked, your visit to the doctor will cost about half what it would in Dubuque, Iowa.

2022 Cost of Living Score: 41 out of 50 points (Top States Grade: A-)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Hot Springs): $390,814

Half gallon of milk: $1.89

Monthly energy bill: $152.49

9. Indiana

Mechanics perform tire rotations on customer vehicles at a Pep Boys - Manny Moe & Jack service center in Clarksville, Indiana.
Luke Sharrett | Bloomberg | Getty Images
Mechanics perform tire rotations on customer vehicles at a Pep Boys - Manny Moe & Jack service center in Clarksville, Indiana.

Driving through the Crossroads of America is a breeze. And if you need to get your tires balanced in Bloomington, it will cost you half of what it would in Lafayette, Louisiana. Like everywhere else, gas prices here are high. But they're running about 20% less than in California.

2022 Cost of Living Score: 42 out of 50 points (Top States Grade: A-)

Consumer Price Index (May, Midwest Region): Up 8.8%

Average home price (Bloomington): $408,649

Half gallon of milk: $2.00

Monthly energy bill: $161.50

8. West Virginia

Morrison's Drive Inn is a well-known landmark in Logan County and has offered its dining customers curb side food service for nearly 70-years since it opened a few years after World War II ended.
John M. Chase | Istock Unreleased | Getty Images
Morrison's Drive Inn is a well-known landmark in Logan County and has offered its dining customers curb side food service for nearly 70-years since it opened a few years after World War II ended.

How about a mountain of Southern fried chicken in The Mountain State? Pound for pound, it will cost you less than half what it would in Seattle, where it wouldn't exactly be "Southern" fried chicken anyway. Same thing for the oil to fry it in — roughly half the price in Morgantown compared to up north.

2022 Cost of Living Score: 43 out of 50 points (Top States Grade: A-)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Morgantown): $329,832

Half gallon of milk: $2.41

Monthly energy bill: $142.65

7. Iowa

Aerial View of Ames, Iowa
Jacob Boomsma | Istock | Getty Images
Aerial View of Ames, Iowa

Even in a college town like Ames, renting an apartment won't blow away your budget. You can get a nice two bedroom for well under $1,000 per month. In a different college town, Austin, Texas, you can expect to be on the hook for 50-60% more. Go Iowa State Cyclones!

2022 Cost of Living Score: 44 out of 50 points (Top States Grade: A)

Consumer Price Index (May, Midwest Region): Up 8.8%

Average home price (Ames): $401,052

Half gallon of milk: $2.29

Monthly energy bill: $148.81

6. Missouri

A man runs in St. Louis, MO.
Geber86 | E+ | Getty Images
A man runs in St. Louis, MO.

Show me a home in Columbia, Kansas City or St. Louis, and I'll show you a bargain. Home prices in The Show Me State are roughly half what they are in Boston. So you'll be able to pay your mortgage and still have money in your budget for a night out. Maybe a movie? It will cost you 20% less in Columbia than it would in Lima, Ohio.

2022 Cost of Living Score: 45 out of 50 points (Top States Grade: A)

Consumer Price Index (May, Midwest Region): Up 8.8%

Average home price (Columbia): $382,188

Half gallon of milk: $2.24

Monthly energy bill: $161.78

5. Tennessee

People on the sidewalk near one of the statues of Elvis Presley located in Broadway Street in Nashville.
Moreiso | Istock Editorial | Getty Images
People on the sidewalk near one of the statues of Elvis Presley located in Broadway Street in Nashville.

These Nashville prices will be music to your ears. A dozen eggs are about $1 cheaper than they are in Stamford, Connecticut. Over in Memphis, the bananas for your Elvis Presley-style fried peanut butter, bacon and banana sandwich will cost about 25% less than they would in Boston.

2022 Cost of Living Score: 46 out of 50 points (Top States Grade: A)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Chattanooga): $357,465

Half gallon of milk: $2.19

Monthly energy bill: $134.42

4. Georgia

Michael Watz | Istock | Getty Images

A can of peaches in the state that's known for them will cost about 30% less in Georgia than in Southern California. And in the home of Coca-Cola, a liter will cost you about 20% less than in Wilmington, Delaware. How about something without a home field advantage? A yoga class will cost you about 20% less in Atlanta than it would in Los Angeles.

2022 Cost of Living Score: 47 out of 50 points (Top States Grade: A+)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Atlanta): $449,444

Half gallon of milk: $1.66

Monthly energy bill: $122.51

3. Alabama

Aerial abstract view of homes in the suburb in Birmingham, Alabama.
Toddmedia | E+ | Getty Images
Aerial abstract view of homes in the suburb in Birmingham, Alabama.

If you're buying a sweet home in Birmingham, you will pay less than a third of what you would for a comparable house in Anaheim, California. Think your eyes might be deceiving you? Head to the local optometrist, which will cost you about 30% less in Alabama than a visit to the eye doctor in Vero Beach, Florida.

2022 Cost of Living Score: 48 out of 50 points (Top States Grade: A+)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Birmingham): $334,577

Half gallon of milk: $2.06

Monthly energy bill: $176.43

2. Kansas

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In Manhattan, Kansas, a ribeye steak at the grocery store will cost you about 25% less than it would in Manhattan, New York. Okay, that one was easy. Your home will cost about one-sixth as much in the Midwestern Manhattan as it would on the famous island back east.

2022 Cost of Living Score: 49 out of 50 points (Top States Grade: A+)

Consumer Price Index (May, Midwest Region): Up 8.8%

Average home price (Manhattan) $350,219

Half gallon of milk: $1.82

Monthly energy bill: $173.50

1. Mississippi

Buying a home or renting an apartment in Meridian, Mississippi, will cost you roughly half of what it would in Bozeman, Montana. Everything else is cheaper, too. A visit to the doctor costs roughly half what it would in Manchester, New Hampshire. Craving some pizza? A New York-style pie will cost you 25% less than it would in Rochester, New York, here in America's cheapest state to live in.

2022 Cost of Living Score: 50 out of 50 points (Top States Grade: A+)

Consumer Price Index (May, South Region): Up 9.2%

Average home price (Meridian): $305,417

Half gallon of milk: $2.03

Monthly energy bill: $160.90

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