What’s the cost of living in Kentucky?

1 min readLast updated October 5, 2023by Charlie Barton

Wondering about the cost of living in Kentucky? 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 Kentucky is on your radar, here are some current statistics related to the cost of living in the state that could help you make up your mind.    

The average cost of living in Kentucky 

Kentucky is home to approximately 4.5 million people and boasts a relatively low cost of living compared to the rest of the US.  

According to the Bureau of Economic Analysis, the average cost of living in Kentucky in 2021 was $40,816.  

While according to data gathered in 2022 from MERIC, the Missouri Economic Research and Information Center, the bluegrass state ranks  22nd in a list of states with the lowest to the highest cost of living. 

Housing costs in Kentucky 

As of March 2023, the average home value in Kentucky is estimated to be around $190,037, 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: 

CityAverage Home Value
Louisville $232,788
Lexington $280,013
Bowling Green $258,974
Owensboro $190,106
Covington $169,330

The monthly rental price ranges across the state for those considering renting in Kentucky. The average price of rental apartments nationwide is $1,702. 

The average rent for a two-bedroom apartment in Kentucky could set you back anywhere between $350 and $4,003.  

Utility costs in Kentucky 

Utility costs play a significant role in Kentucky's overall cost of living. According to Forbes, the average monthly cost is around $465.  

UtilityAverage cost in Kentucky
Energy bill $124.67
Monthly water bill $49
Internet $35
Natural gas $94
Phone bill $114
Streaming $48

Grocery and food costs in Kentucky 

When it comes to groceries and food costs, Kentucky generally aligns with prices found elsewhere in the United States.   

According to Zippia, those in Louisville pay over $315 on average each month. This is one of the lowest grocery bills in the country.  

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 Kentucky 

Transportation costs, including gas prices and vehicle maintenance, impact Kentucky's overall cost of living.  

According to MIT, a single adult with no children can expect to pay upwards of $5,400. 

Gas prices in Kentucky are typically in and around the national average. At the time of writing, Kentucky 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 Kentucky 

Understanding healthcare expenses is crucial when considering the cost of living.  

The specific healthcare costs in Kentucky 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:  

ScenarioAnnual healthcare expenditure
One adult, no children $3,143
One adult, one child $8,148
One adult, two children $8,158
Two adults (one working), no children $6,131
Two adults (one working), one child $8,158
Two adults (one working), two children $8,083
Two adults (two working), no children $6,131
Two adults (two working), one child $8,158
Two adults (two working), two children $8,083

Childcare costs in Kentucky 

Families in Kentucky currently pay around $8,542 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 Kentucky 

Kentucky’s state income tax rates range between 2% and 5%. 

Here's a comparison of income tax rates among some neighboring states:  

StateIncome Tax Rates
Kentucky 2% - 5%
Indiana 3.23% - 5.75%
Ohio 0.495% - 4.797%
West Virginia 3% - 6.5%
Tennessee No state income tax

The sales tax rate in Kentucky is 6%. However, it's important to note that additional local sales taxes may be imposed by cities or counties within Kentucky, which can vary. These local sales tax rates can range from 0.5% to 3%, resulting in a combined sales tax rate that may be higher than the state rate. 

The bottom line 

The amount of money needed to live comfortably in Kentucky 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 Kentucky. 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. 


Charlie Barton

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.