What’s the cost of living in Arkansas?

1 min readLast updated May 26, 2023by Charlie Barton

When contemplating a relocation to a different state, understanding the cost of living becomes crucial for effective financial planning. If Arkansas has caught your attention, let's delve into the current statistics surrounding the cost of living in the state.

The average cost of living in Arkansas

Arkansas's average cost of living can vary depending on personal circumstances and the chosen location. However, compared to the rest of the U.S., Arkansas has the third-lowest cost of living among all U.S. states. According to C2ER’s Cost of Living Index Arkansas’ cost of living is approximately 14% lower than the rest of the nation.

Housing costs in Arkansas

Compared to the national median of $436,800, housing costs in Arkansas generally fall on the more affordable side. As of March 2023, Zillow, a reputable real estate company, estimates the average home value in Arkansas to be around $178,744.

However, it's important to note that housing prices can significantly differ across various regions within the state.

Typical Home Prices in Arkansas (Zillow Data):

  1. Fayetteville: $327,536

  2. Springdale: $282,850

  3. Jonesboro: $206,627

  4. Little Rock: $190,544

  5. Fort Smith: $159,371

For those considering renting in Arkansas, monthly rental prices for a two-bedroom apartment range from $600 to $4,640.

Utility Costs in Arkansas

Arkansas's utilities generally align with the prices in the United States. According to Forbes, the average monthly cost is around $404.

Average Monthly Utility Costs in Arkansas:

  1. Phone bill: $114

  2. Energy bill: $123.69

  3. Natural gas: $65

  4. Streaming: $45.50

  5. Internet: $30

  6. Monthly water bill: $26

Groceries and food costs in Arkansas

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

According to Zippia, those in Little Rock pay over $280 on average each month.  This is one of the lowest amounts 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 U.S. households.  

Transportation costs in Arkansas

Transportation costs, including gas prices and vehicle maintenance, impact the overall cost of living.

Gas prices in Arkansas are typically lower than the national average, providing potential savings for residents. However, these prices fluctuate over time.  

However, it's worth noting that prices can vary across different regions within the state.

Healthcare costs in Arkansas

When considering the cost of living, understanding healthcare expenses becomes crucial.

Annual Health Expenditure in Arkansas Estimated by MIT:

  1. One adult, no children: $3,200

  2. Two adults (one working), no children: $7,148

  3. Two adults (two working), no children: $7,148

  4. One adult, one child: $9,339

  5. One adult, two children: $9,349

  6. Two adults (one working), one child: $9,349

  7. Two adults (two working), one child: $9,349

  8. Two adults (two working), two children: $9,275

  9. Two adults (one working), two children: $9,275

Childcare costs in Arkansas

In terms of childcare, Arkansas boasts relatively affordable costs compared to the national average.

Families in Arkansas currently pay around $7,620 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 Arkansas

Arkansas state income tax rates ranges from 2% to 5.9%. The state sales tax rate is 6.5%, slightly higher than the national average.

Taxes in Arkansas compared to neighboring states:

  1. Arkansas Income Tax Rate: 2% - 5.9%

  2. Mississippi Income Tax Rate: 3% - 5%

  3. Oklahoma Income Tax Rate: 0.5% - 5.25%

  4. Texas: No state income tax

  5. Tennessee: No state income tax

The Bottom Line

Overall, Arkansas offers an affordable cost of living compared to more expensive states. While housing and transportation costs are notably lower, other factors such as groceries, utilities, and miscellaneous expenses align more closely with the national average.

Arkansas presents a diverse natural landscape and a welcoming community, making it an attractive place to establish roots or embark on a new chapter in life. However, before making any significant financial decisions, it is advisable to consult with a financial advisor to ensure a seamless transition and proper 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.