Just how affordable is Kentucky? One ranking puts it among the cheapest states

Meredith Howard
·3 min read
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Kentucky has one of the lowest statewide costs of living in the nation, according to a ranking from online pharmacy store Now Patient.

Comparatively low average prices for gas, groceries and other expenses contributed to the state’s 46th overall ranking in the “US Costly States” list.

The Now Patient ranking was based on metrics such as gas prices, grocery bills, funeral costs, a cost of living score, health insurance prices and the cost of gym memberships. Sources included World Population Review, auto club AAA, Zippia, the Missouri Economic Research and Information Center, Value Penguin and Statista, according to Now Patient.

The individual category in which Kentucky ranked the lowest for pricing was gas. Now Patient reports the average cost of gas was $3.257 per gallon in July – that’s dropped to $3.077 as of Jan. 8, according to AAA.

Does this ranking tell the whole story?

Although the Now Patient ranking named Kentucky one of the least costly states to live in, it’s unaffordable for those in Lexington to live on the state’s minimum wage, according to one calculation.

A single Lexington resident without children needs to make $15.62 per hour to afford basic necessities, according to the Massachusetts Institute of Technology’s Living Wage Calculator.

Kentucky’s non-tipped minimum wage is the same as the federal government’s at $7.25 an hour, less than half of what MIT estimates is a “living wage” in the area. The tipped minimum wage in the commonwealth is $2.13 an hour.

To afford a typically priced two-bedroom rental home, a Kentucky resident needs to make $17.90 an hour, according to a report from the National Low Income Housing Coalition. Using this “housing wage,” an individual would have to work 99 hours each week at minimum wage to afford to rent a two-bedroom.

Rent prices have climbed in Lexington this year, increasing at a greater rate than New York City over the summer, according to one analysis. Real estate pricing is also up in the city, with a median home listing price of $365,500 in November, according to real estate company Realtor.com.

Grocery costs have risen 1.7% across the nation from November 2022 to November 2023, the U.S. Bureau of Labor Statistics reports, while restaurant prices have increased by 5.3% over the same period. Transportation services have seen a greater jump than most categories, with a 10.1% price increase.

But while prices are up in many cases, one necessity for most residents has seen a significant price decline in the past 12 months. Gas prices are down 8.9% across the U.S., and Kentucky has seen relief of more than 10 cents per gallon since last year, according to AAA.

Cost of living in Kentucky

Here’s how Kentucky performed in Now Patient’s ranking of costly states:

  • Funeral costs: 33rd place, $7,265 average funeral cost

  • Gas prices: 40th place, $3.257 per gallon in July

  • Cost of groceries: 38th place, $315.20 average grocery cost per month per person

  • Cost of living score (includes housing costs, utilities and more): 32nd place, score of 93.8

  • Health insurance: 39th place, $479

  • Gym membership: 31st place, $28.60

  • Overall place: 46th

The nation’s most expensive states to live in are New York, Alaska, Vermont, Hawaii and Massachusetts, according to Now Patient’s report, while the five least costly states are Arkansas, Kansas, Texas, Georgia and Kentucky.

Do you have a question about affordability in Kentucky for our service journalism team? We’d like to hear from you. Fill out our Know Your Kentucky form or email ask@herald-leader.com.