What’s the cost of living in Iowa?
Wondering about the cost of living in Iowa? This article summarizes everything you need to know, from tax rates to healthcare costs.
When considering a move to a new state, understanding the cost of living is vital for effective budgeting and financial planning. If you’re planning to move to Iowa but want an idea of what life will be like once you get there, here are some current statistics related to the cost of living in Iowa.
The average cost of living in Iowa
According to data gathered in 2022 from MERIC, the Missouri Economic Research and Information Center, it has one of the country's lowest living costs—ranking 7th in a list of the lowest to the highest states.
Estimates put the cost of living in Iowa 9% lower than the national average.
Housing costs in Iowa
As of March 2023, the average home value in Iowa is estimated to be around $200,038, according to the Zillow Home Value Index as of March 2023.
It’s important to note that housing prices can significantly differ across various regions within the state. Here are some examples of typical home prices based on Zillow's data:
| City | Average Home Value |
|---|---|
| Des Moines | $192,796 |
| Cedar Rapids | $186,906 |
| Davenport | $164,621 |
| Sioux City | $170,070 |
| Iowa City | $277,992 |
The monthly rental price ranges across the state for those considering renting in Iowa. The Fair Market Rent in Iowa ranges from $715 for a 2-bedroom apartment in Adair County, IA, to $1,036 for a 2-bedroom unit in Iowa City.
In addition, understanding these costs in relation to the average salary in Iowa is crucial for realistic budgeting.
Utility costs in Iowa
Utility costs play a significant role in Iowa's overall cost of living. According to Forbes, the average monthly cost is around $423.
| Utility | Average cost in Iowa |
|---|---|
| Energy bill | $109.63 |
| Monthly water bill | $32 |
| Internet | $50 |
| Natural gas | $73 |
| Phone bill | $114 |
| Streaming | $45.25 |
Grocery and food costs in Iowa
When it comes to groceries and food costs, Iowa generally aligns with prices found elsewhere in the United States.
According to Zippia, those in Chicago pay over $347 on average each month.
According to 2021 data from the Bureau of Labor Statistics, the average spending on food at home is $5,259 annually, or about $438 per month for US households.
Transportation costs in Iowa
Transportation costs, including gas prices and vehicle maintenance, impact Iowa's overall cost of living.
According to MIT, a single adult with no children can expect to pay upwards of $5,300.
Gas prices in Iowa are typically in and around the national average. At the time of writing, Iowa was just below the national average. These prices fluctuate over time.
It is also worth noting that prices can vary across different regions within the state.
Healthcare costs in Iowa
Understanding healthcare expenses is crucial when considering the cost of living.
The specific healthcare costs in Iowa can vary depending on factors such as insurance coverage and individual circumstances. Therefore, it is advisable to research and consult with healthcare providers and insurance companies to obtain accurate cost estimates.
MIT estimates:
| Scenario | Annual healthcare expenditure |
|---|---|
| One adult, no children | $3,416 |
| One adult, one child | $8,178 |
| One adult, two children | $8,188 |
| Two adults (one working), no children | $5,914 |
| Two adults (one working), one child | $8,188 |
| Two adults (one working), two children | $8,113 |
| Two adults (two working), no children | $5,914 |
| Two adults (two working), one child | $8,188 |
| Two adults (two working), two children | $8,113 |
Childcare costs in Iowa
Families in Iowa currently pay around $8,615 per year for childcare for one child. This figure doubles for two children.
However, it's important to note that this figure can vary across the state.
Taxation in Iowa
Iowa’s state income tax rates follow a progressive tax structure. They range between 0.33% - 8.53%.
Here's a comparison of income tax rates among some neighboring states:
| State | Income Tax Rates |
|---|---|
| Iowa | 0.33% - 8.53% (progressive tax structure) |
| Illinois | 4.95% (flat tax) |
| Minnesota | 5.35% - 9.85% (progressive tax structure) |
| Missouri | 1.5% - 5.4% (progressive tax structure) |
| Nebraska | 2.46% - 6.84% (progressive tax structure) |
The sales tax rate in Iowa is 6%. However, it's important to note that local jurisdictions in Iowa can impose an additional local option sales tax, varying from 0% to 1%. Therefore, Iowa's total sales tax rate can range from 6% to 7%.
The bottom line
The amount of money needed to live comfortably in Iowa can vary depending on location, lifestyle, family size, and personal preferences. However, as the most expensive state in the US, you may need more than you first think.
It's essential to consider these factors, along with personal circumstances and preferences, when evaluating the cost of living in Iowa. In addition, consulting with a financial advisor can provide valuable insights and assistance in managing expenses and financial planning.
Whether you’re retirement planning or considering relocating to chase a new career, Unbiased can assist you with your move's financial ins and outs. Find the right advisor for your needs today.
Writer
Charlie Barton is a writer at Unbiased. He has been writing about personal finance and investing since 2017, with extensive knowledge of platforms and products. Charlie has a first-class degree from the London School of Economics.