What’s the cost of living in Kentucky?

1 min readLast updated May 15, 2024by Charlie Barton

Wondering about the cost of living in Kentucky? This article summarizes everything you need to know, from tax rates to healthcare costs.

Summary

  • Kentucky boasts a relatively low cost of living when compared to the rest of the US.

  • The average cost of living in Kentucky is approximately $40,816 per person annually.

  • The average home value in Kentucky is estimated to be around $207,548 as of May 2024.

  • A financial advisor can help you manage the cost of living and develop a financial plan to help your money go further.

What is 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.  

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According to the Bureau of Economic Analysis, the average cost of living in Kentucky is approximately $40,816 per person annually.  

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

How much does housing cost in Kentucky?

According to the Zillow Home Value Index, the average home value in Kentucky is estimated to be around $207,548 as of May 2024. This is up 5% year-on-year.  

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 $238,102
Lexington $303,077
Bowling Green $271,408
Owensboro $189,967
Covington $196,298

For those considering renting in Kentucky, the monthly rental price ranges across the state.

According to Zillow’s Rental Manager, the median rent for all bedrooms and all property types in Kentucky is $1,315. Other sources put the average figure closer to $1,000 or $1,200, depending on your location.

This is significantly below the national median rent, which stands at $2,104, according to Zillow.

How much do utilities cost in Kentucky?

Utility costs play a significant role in Kentucky's overall cost of living.

According to Forbes, the monthly average utility bill in Kentucky is just under $465.  

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

What are the average grocery and food costs in Kentucky?

When it comes to groceries and food costs, Kentucky spends slightly less monthly than elsewhere in the United States.   

According to World Population Review, those in Kentucky pay over $315 on average each month. This is below their stated national average of $354.50.

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.   

How much does transport cost 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 $10,000 on transport costs in Kentucky. This rises to over $17,500 for a typical family of four.  

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.  

How much does healthcare cost 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 the following costs based on various scenarios:  

ScenarioAnnual healthcare expenditure
One adult, no children $2,791
One adult, one child $8,618
One adult, two children $8,504
Two adults (one working), no children $6,367
Two adults (one working), one child $8,504
Two adults (one working), two children $8,976
Two adults (two working), no children $6,367
Two adults (two working), one child $8,504
Two adults (two working), two children $8,976

How much does childcare cost in Kentucky?

According to the Economic Policy Institute, childcare costs are one of the biggest expenses for families in Kentucky.

Families can expect to pay around $6,411 per year or $534 per month for childcare for one child. For two children, this doubles to $12,821 annually.

According to the research, childcare for one child takes up nearly 12% of a median family income in the state. The costs for two children come in at 31% more than the average Kentucky rent.

However, it's important to note that this figure can vary across the state.  

According to MIT’s Living Wage calculator, the following is the breakdown of childcare costs based on different scenarios:

ScenarioChildcare cost
One child $7,715
Two children $15,430
Three children $21,754

How much tax will I pay in Kentucky? 

Figuring out how much tax you have to pay in Kentucky will impact your cost of living.

Kentucky has a flat income tax of 4.5%.

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

StateIncome Tax Rates
Kentucky 4.5%
Indiana 3.05%
West Virginia 2.55% - 5.525%
Tennessee No state income tax

The sales tax rate in Kentucky is 6%.

Unlike other states, there are no local sales and use taxes in Kentucky, meaning sales tax will always stand at 6%.

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. 

Writer

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.

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