If you’re considering moving to Arkansas or currently living in the state, it’s important to understand the cost of living. Arkansas is known for its natural beauty and relaxed atmosphere, but how does the cost of living compare to other states? In this article, we’ll dive deep into the housing costs, utility expenses, healthcare costs, transportation expenses, food and grocery costs, taxes, and job opportunities in Arkansas. By the end, you’ll have a clear understanding of what it’s like to live in Arkansas, financially speaking.

Introduction to Arkansas

Arkansas is a southern state with a population of over 3 million people. The state is known for its natural beauty, including the Ozark and Ouachita Mountains, hot springs, and the Mississippi River. The cost of living in Arkansas is lower than the national average, making it an attractive location for those looking to save money. However, it’s important to understand the cost of living in greater detail before making a move or a purchase.

Arkansas is also home to a diverse range of industries, including agriculture, manufacturing, and healthcare. The state is a major producer of rice, soybeans, and poultry, and has a growing tech industry. The University of Arkansas is a top-ranked research institution, and the state has a strong network of community colleges and vocational schools.

In addition to its natural beauty and economic opportunities, Arkansas has a rich cultural heritage. The state is home to several historic sites, including Little Rock Central High School, which played a pivotal role in the civil rights movement. Arkansas is also known for its music, particularly blues, rockabilly, and country. The annual Arkansas State Fair is a popular event that showcases the state’s agricultural and cultural traditions.

Understanding the Cost of Living in Arkansas

The cost of living in Arkansas is about 14% lower than the national average, according to the Missouri Economic Research and Information Center. Housing, utility, transportation, and grocery costs are all lower in Arkansas compared to other states. In fact, housing costs alone are about 28% lower than the national average. This makes Arkansas an affordable place to live, especially for those on a budget.

Additionally, Arkansas has a lower tax burden compared to other states. The state income tax ranges from 0.9% to 6.9%, depending on income level, which is lower than many other states. Property taxes are also relatively low in Arkansas, with an average effective rate of 0.63%. This means that residents can keep more of their hard-earned money and enjoy a higher quality of life without breaking the bank.

Housing Costs in Arkansas: Renting vs. Buying

As previously mentioned, housing costs in Arkansas are below the national average. However, whether to rent or buy a home in Arkansas depends on your circumstances. If you’re looking for a short-term living arrangement or don’t want to commit to a long-term mortgage, renting may be the way to go. On the other hand, if you’re looking for a long-term investment, buying a home may be more feasible. It’s important to consider your budget, future plans, and the current real estate market before making a decision.

Another factor to consider when deciding between renting and buying in Arkansas is the location. Some areas may have a higher demand for rentals, making it more difficult to find a suitable rental property. In these cases, buying a home may be a better option, as it provides more stability and control over your living situation. Additionally, certain neighborhoods may have a higher appreciation rate for home values, making buying a potentially profitable investment in the long run. It’s important to research the specific area you’re interested in and weigh the pros and cons of each option before making a decision.

Comparison of Housing Prices in Different Cities of Arkansas

The average home price in Arkansas is just over $186,000, according to Zillow. However, housing prices can vary depending on the city you choose to live in. For example, the average home price in Little Rock is around $180,000, while the average home price in Fayetteville is around $280,000. Before moving to a new city in Arkansas, it’s important to research the current housing market and compare the prices to your budget.

Another city in Arkansas with relatively high housing prices is Bentonville, with an average home price of around $350,000. This is due to the city’s rapid growth and the presence of major corporations such as Walmart and Tyson Foods. On the other hand, the average home price in Jonesboro is around $150,000, making it a more affordable option for those on a tight budget.

It’s also important to consider the cost of living in addition to housing prices when comparing different cities in Arkansas. For example, while Fayetteville may have higher housing prices, it also has a lower overall cost of living compared to other cities in the state. This can make it a more attractive option for those looking to save money on other expenses such as groceries, transportation, and entertainment.

Utility Costs and Other Expenses in Arkansas

Utility costs in Arkansas are generally lower than the national average. According to numbeo, the average utility bill for a 915 square foot apartment in Arkansas is around $146. Other expenses, such as internet, cable, and phone service, can vary depending on the provider and plan you choose. It’s important to consider these costs in addition to your basic utilities to calculate your total expenses in Arkansas.

In addition to utility costs, Arkansas also has a lower cost of living compared to many other states. Housing costs, for example, are significantly lower than the national average. According to Zillow, the median home value in Arkansas is $142,000, compared to the national median of $229,000.

Another factor to consider when calculating expenses in Arkansas is the state’s tax rates. Arkansas has a progressive income tax system, with rates ranging from 0.9% to 6.6%. The state also has a sales tax rate of 6.5%, which is slightly higher than the national average. However, groceries and prescription drugs are exempt from sales tax in Arkansas.

Healthcare Costs in Arkansas: Insurance and Out-of-Pocket Expenses

The cost of healthcare in Arkansas can vary depending on the type of insurance you have and the medical services you need. According to the Health Care Cost Institute, the average cost of healthcare for individuals with private insurance in Arkansas was $5,745 in 2018. Out-of-pocket expenses, such as copays and deductibles, can also increase the cost of healthcare. It’s important to research and compare healthcare plans before settling on one to ensure you’re getting the best coverage for your budget.

Another factor that can affect healthcare costs in Arkansas is the location of medical facilities. Rural areas may have limited access to healthcare providers, which can result in higher costs for travel and longer wait times for appointments. Additionally, some medical procedures may not be available in certain areas, requiring patients to travel to larger cities for treatment.

Furthermore, preventative care can help reduce healthcare costs in the long run. Regular check-ups and screenings can catch health issues early on, preventing the need for more expensive treatments down the line. Many insurance plans now offer free preventative care services, so it’s important to take advantage of these benefits to maintain good health and save money on healthcare costs.

Also read: Cost of living in Arlington 

Transportation Costs in Arkansas: Gas Prices, Car Insurance, and Public Transit

The cost of transportation in Arkansas can vary depending on how you choose to travel. If you own a car, you’ll need to factor in gas prices and car insurance. According to AAA, the average cost of gas in Arkansas is around $2.32 per gallon. Car insurance rates can also vary depending on the provider, coverage, and your driving record. If you prefer to use public transportation, Arkansas has several options, including buses and light rail. The cost of public transportation varies by city and mode of transportation.

Food and Grocery Costs in Arkansas: Eating In vs. Eating Out

The cost of food and groceries in Arkansas is generally lower than the national average. According to the Bureau of Labor Statistics, the average household spends around $3,700 per year on food at home. Eating out can be more expensive, but there are several affordable options in Arkansas. Additionally, the state is known for its agricultural industry, providing access to fresh produce and local products.

Taxes in Arkansas: Income Tax, Sales Tax, and Property Tax

Arkansas has several types of taxes, including income tax, sales tax, and property tax. The state income tax ranges from 0.4% to 5.9% depending on your income level. Sales tax in Arkansas is around 6.5% on most goods and services. Property taxes vary depending on the county and city you live in. It’s important to factor in these taxes when calculating your overall expenses in Arkansas.

Tips for Saving Money While Living in Arkansas

While Arkansas is an affordable place to live, there are several ways to save money and stay within your budget. For example, cooking at home can save money on food expenses, while using public transportation or carpooling can save money on transportation costs. In addition, shopping at local farmers’ markets and choosing generic brands at the grocery store can also save money. It’s important to create a budget and track your expenses to ensure you’re staying within your means.

Job Opportunities and the Cost of Living in Arkansas

Arkansas has several job opportunities in industries such as agriculture, healthcare, and manufacturing. The unemployment rate in Arkansas was 4.8% as of July 2021, according to the Bureau of Labor Statistics. However, it’s important to research job opportunities and salaries in your desired field before making a move. The cost of living may be lower in Arkansas, but it’s still important to ensure you have the income to support your lifestyle in the state.

How the Cost of Living in Arkansas Compares to Other States

Compared to other states, Arkansas is an affordable place to live. However, it’s important to consider other factors, such as job opportunities, climate, and lifestyle, before making a decision to move. States such as Mississippi, Oklahoma, and Missouri also have a lower cost of living than the national average.

Conclusion: Is Living in Arkansas Affordable?

Overall, Arkansas is an affordable place to live for those on a budget. Housing costs, utility expenses, transportation costs, and food and grocery costs are all lower than the national average. However, it’s important to consider other factors, such as job opportunities, healthcare costs, and taxes, before making a decision to move. By researching the cost of living in Arkansas and considering your budget and future plans, you can make an informed decision on whether or not the state is right for you.