What’s the cost of living in Arizona?

Arizona can look like a good proposition for relocation. But to make that decisive move and live in the state, you need to know what it will cost you. Is Arizona an affordable state? How does it look when compared to neighbors like Utah and California?

The average cost of living in Arizona overall

When you consider everything, the cost of living in Arizona is pretty close to the national average. That means it’s significantly more affordable than California. For example, living in Phoenix will cost you 50 percent less overall than in San Diego. If you’re moving from the East Coast, you’ll also appreciate a relatively lower cost of living—around 20 percent lower than in New York.

Housing costs in Arizona

In 2022, the median home price in Arizona was $470,500, around 20 percent higher than the national figure.

The median monthly rent for a two-bed apartment was about 18 percent higher than the national figure. But these stats can be a little misleading because there are big differences across the state, depending on where you’re looking. For example, Yuma is 18 percent lower than the national average, while Lake Havasu City is 82 percent higher.

Overall, homes in most of Arizona’s popular destinations are around the national average.

Here is a comparison between home prices and apartment rentals in five key Arizona cities.

In addition, understanding these costs in relation to the average salary in Arizona is crucial for realistic budgeting.

Utility costs in Arizona

You’ll pay a little more than the US average for utilities such as energy in Arizona. That’s unsurprising for a state where temperatures routinely hit three figures. But as with housing costs, there’s quite a lot of variation between cities, so it’s a good idea to research if you want to avoid a utility hotspot when moving.

The table below shows how varied utility costs can be:

Groceries and food costs in Arizona

Groceries cost four percent less than the national average in Arizona. The relatively affordable prices on everyday goods mean that a single person who likes to do some home cooking needn’t spend more than about $300 per month.

Naturally, if you like to dine out regularly, your food bill will rise significantly. Fast food outlets cost around $12 per meal, while a real sit-down dinner costs about $30.

Take a gallon of milk as a good basic comparison between Arizona and the national average when it comes to groceries.

Transportation Costs in Arizona

Arizona is the sixth largest state in the nation, so there are some large distances to be covered and epic road trips to enjoy. It's good news that transportation costs, such as gas and car maintenance, are about two percent lower than the national average. A good way to keep your transportation costs down is to shop around for your insurance. Do some research on independent insurance agents—it can really pay. Large centers such as Phoenix have well-run public transportation. For example, a 31-day pass for the Phoenix Valley Metro costs $64, while a 30-day Tucson SunGO card will only cost you $48.

Healthcare Costs in Arizona

Once again, it's a mixed picture when it comes to healthcare costs. Surprisingly, Phoenix is a healthy 20 percent lower than the national average, whereas Flagstaff is eight percent higher. On the other hand, in Lake Havasu City, healthcare costs are closest to the national average—our table shows some useful comparisons.

Childcare Costs in Arizona

In Arizona, a family will pay $10,948 annually for infant care, while preschool care for a 4-to-5-year-old costs around $8,900. There are currently around 3,945 childcare centers, with on average 20 students in each one, with five educators per center.

However, childcare bills are expected to become lower as Arizona is the fastest-growing state by population, attracting plenty of new service providers.

Below you can see how Arizona compares with some of its neighbors:

Taxes in Arizona

Arizona is quite a favorable location for income tax—you'll pay between 2.59 percent and 4.5 percent, depending on your exact status.

Unfortunately, Arizona also has a state sales tax rate of 5.6 percent–8.4 percent, the 11th highest in the US.

Here's a comparison table that shows the different income tax rates among the neighboring states we featured above:

You can also check out the complete guide to taxes in Arizona here.

How Much Money Do You Need to Live Comfortably in Arizona?

Arizona is a relatively affordable state to live in. For example, Move.org rated Tucson as the fourth most affordable city in the country.

According to MIT figures, a single person could get by and pay the bills on $31,077 a year, but to live comfortably, you'll need a great deal more. GoBankingRates reckon around $68,504 would enable you to enjoy life while saving for your long-term goals, such as retirement.

The bottom line is that the cost of living in Arizona is essentially reasonable. There are no nasty surprises or anomalies to look out for. Amazing weather and scenery are complemented by a healthy economy and housing prices just slightly above the national average. Overall, it's a good mix.

Moving home to a new state is a big step, with plenty to consider—especially when it comes to your finances. Talking to a financial advisor is the best first step. Contact Unbiased, and we'll find the right professional support for you.