What’s the cost of living in Arkansas?
Wondering about the cost of living in Arkansas? This article summarizes everything you need to know, from tax rates to healthcare costs.
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. To provide a snapshot of housing costs, here are some examples of typical home prices based on Zillow's data:
| City | Average home value |
|---|---|
| Little Rock | $190,544 |
| Fayetteville | $327,536 |
| Fort Smith | $159,371 |
| Jonesboro | $206,627 |
| Springdale | $282,850 |
For those considering renting in Arkansas, monthly rental prices for a two-bedroom apartment range from $600 to $4,640.
In addition, understanding these costs in relation to the average salary in Arkansas is crucial for realistic budgeting.
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.
| Utility | Average cost in Arkansas |
|---|---|
| Energy bill | $123.69 |
| Monthly water bill | $26 |
| Internet | $30 |
| Natural gas | $65 |
| Phone bill | $114 |
| Streaming | $45.50 |
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. Here's a comparison of income tax rates among neighboring states:
| State | Income Tax Rate |
|---|---|
| Arkansas | 2% - 5.9% |
| Mississippi | 5% |
| Texas | No state income tax |
| Oklahoma | 0.5% - 5.25% |
| 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.
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.