What’s the cost of living in Minnesota?
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 a move to Minnesota, 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 Minnesota
Minnesota is home to over 5.7 million people.
According to data gathered in 2022 from MERIC, the Missouri Economic Research and Information Center, the state ranks 26th in a list of states with the lowest to the highest cost of living.
Housing costs in Minnesota
As of March 2023, the average home value in Minnesota is estimated to be around $315,122, 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.
Typical Home Prices in Minnesota (Zillow Data):
Bloomington - $351,363
Minneapolis - $322,461
Rochester - $314,782
Saint Paul - $281,761
Duluth - $251,563
The monthly rental price ranges across the state for those considering renting in Minnesota. For example, the average rent for an apartment in Minneapolis is $1,660
Utility costs in Minnesota
Utility costs play a significant role in Minnesota's overall cost of living. According to Forbes, the average monthly cost is around $380.
Average Monthly Utility Costs in Minnesota:
Phone bill - $114
Energy bill - $104.76
Streaming - $49
Internet - $30
Monthly water bill - $28
Natural gas - $55
Grocery and food costs in Minnesota
When it comes to groceries and food costs, Minnesota generally aligns with prices found elsewhere in the United States.
According to Zippia, those in Detroit pay over $395 on average each month. This is one of the highest 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 Minnesota
Transportation costs, including gas prices and vehicle maintenance, impact Minnesota'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 Minnesota are typically in and around the national average. At the time of writing, Minnesota was at 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 Minnesota
Understanding healthcare expenses is crucial when considering the cost of living.
The specific healthcare costs in Minnesota 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.
Annual Health Expenditure in Minnesota Estimated by MIT:
One adult, no children - $2,973
One adult, one child - $8,322
One adult, two children - $8,322
Two adults (one working), no children - $6,522
Two adults (one working), one child - $8,332
Two adults (one working), two children - $8,257
Two adults (two working), no children - $6,522
Two adults (two working), one child - $8,332
Two adults (two working), two children - $8,257
Childcare costs in Minnesota
Families in Minnesota currently pay around $9,507 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 Minnesota
Minnesota’s state income tax rate is a flat rate of 5.35% and 9.85%.
Taxes in Minnesota compared to neighboring states:
Minnesota income tax rate: 5.35% - 9.85%
North Dakota income tax rate: 1.1% - 2.9%
South Dakota income tax rate: No state income tax
Wisconsin income tax rate: 3.54% - 7.65%
Iowa income tax rate: 0.33% - 8.53%
The sales tax rate in Minnesota is 6.875%. However, additional local taxes may apply, such as the local sales tax and the transit sales and use tax. The combined sales tax rate, including state and local taxes, can range from 6.875% to 8.875%, depending on the location within the state. It's important to note that Minnesota's sales tax rate can vary by city and county.
The bottom line
The amount of money needed to live comfortably in Minnesota 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 Minnesota. 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 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.