Cost of Living in Alabama

cost of living in Alabama 2021

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    (Last Updated – 12/2021)

    Whether Tiger or Crimson Tide, there’s no doubt that Alabamans are intensely proud of their state. With some of the best college football legacies in the nation, its delicious southern cuisines, or the fact that Mobile, Alabama was actually the site of the first celebration of Mardis Gras, it’s not surprising why Alabamans are so proud to hail from the Heart of Dixie.

    Alabama’s ranks continue to grow, as its population has risen by 5.1% since 2010 and now numbers over 5,000,000 residents. One of the things that continues to draw in new residents is no doubt Alabama’s affordable cost of living.

    We take an up-close look at some of the key costs of living that makeup the budgets of everyday Alabamans.

    What’s the Average Cost of Living in Alabama?

    Average Cost of Living in Alabama: $35,859 per year

    The Bureau of Economic Analysis cites that the average cost of living in Alabama is around $35,859 per year for a typical single individual.

    This is good news for anyone who’s thinking of moving to Alabama, as MERIC’s 2021 Cost of Living Index actually ranked Alabama as having the 4th lowest cost of living in the United States. The only other Southeastern state to beat Alabama on that list was Mississippi.

    As a whole, the Southeastern United States region is fairly affordable when compared to the nation at large. It’s hard to go wrong if you’re looking to settle down without paying an arm and a leg.

    We’ve broken down the major costs of living into five key categories to help paint a picture of what annual expenses look like in Alabama.

    Category

    Average Annual Per-Capita Cost in Alabama

    Housing and Utilities

    $6,535

    Health Care

    $5,904

    Food and Beverages (non-restaurant)

    $3,126

    Gas and Energy Goods

    $787

    All Other Personal Expenditures

    $19,505

    Housing Costs in Alabama

    Average Housing Costs in Alabama: $562 to $1,186 per month

    The average home in Alabama costs around $178,649, according to Zillow’s 2021 3rd quarter housing data. This is almost half of the national median sales price of an existing home of $352,800, according to the National Association of Realtors®.

    •  Median monthly mortgage cost: $1,186

    •  Median studio rent: $562

    •  Median one-bedroom rent: $651

    •  Median two-bedroom rent: $777

    •  Median three-bedroom rent: $897

    •  Median four-bedroom rent: $1,038

    •  Median gross rent: $792

    Home prices and rental costs vary widely depending on where you live. When calculating your monthly budget, don’t forget to factor in other costs like utilities, taxes, and maintenance in addition to your monthly mortgage payment.

    Below are the typical 2021 home prices for major cities in Alabama, according to Zillow.

    Alabama City

    Typical Home Price

    Birmingham

    $210,425*

    Huntsville

    $256,425*

    Mobile

    $160,820*

    Montgomery

    $162,914*

    Tuscaloosa

    $195,079*

    Daphne

    $284,928*

    Decatur

    $165,131*

    Florence

    $143,186*

    Dothan

    $139,877*

    Auburn

    $235,140*

    Anniston

    $130,397*

    Gadsden

    $135,420*

    Talladega

    $119,110

    Albertville

    $163,468*

    Cullman

    $158,350

    Scottsboro

    $122,618*

    Ozark

    $105,843

    Enterprise

    $152,519*

    Selma

    $61,910*

    Valley

    $79,099*

    Troy

    $126,917

    * data as of 8/31/2021, all other data sourced from 9/30/2021

    Utility Costs in Alabama

    Average Utility Costs in Alabama: $400.01 per month

    Alabamians can expect to pay a total of $400.01 per month on their utility bills. This includes electricity, gas, cable and water.

    The exact monthly tally will depend on your property, utility usage habits, and the type of services you choose (e.g. internet only or TV and internet). We’ve broken out some common utility costs below.

    Utility

    Average Alabama Bill

    Electricity

    $143.95

    Gas

    $112.06

    Cable & Internet

    $114

    Water

    $30

    Sources: U.S. Energy Information Administration, Electric Sales, Revenue, and Average Price, 2021; Inspirecleanenergy.com; DoxoInsights, U.S. Cable & Internet Market Size and Household Spending Report 2021; and Rentcafe.com, What Is the Average Water Bill?

    Groceries & Food

    Average Grocery & Food Costs in Alabama: $260.50 per person, per month

    Alabamians pay an average of $260.50 per month on grocery and non-restaurant food costs, or about $3,126 per year, according to the BEA’s latest Personal Consumption Expenditures report.

    Alabama’s grocery and food costs are fairly cheap when compared to the rest of the nation; this is fairly typical of Southeastern states in general, with the exception of Virginia and North Carolina where groceries costs are above the national average.

    However bear in mind that these expenses will vary depending on where you live within Alabama. Expect to pay more for groceries if you’re living in a larger urban city like Huntsville versus a smaller city like Decatur.

    Below are the Council for Community and Economic Research’s, rankings of food costs across major Alabama cities for the 3rd quarter of 2021.

    Alabama City

    Grocery Items Index

    Anniston-Calhoun County

    91.4

    Decatur-Hartselle

    94.2

    Birmingham

    94.5

    Florence

    96.9

    Mobile

    97.3

    Huntsville

    99.2

    Montgomery

    101.4

    Auburn-Opelika

    105.1

    Dothan

    106.6


    Recommended: Grocery Shopping on a Budget

    Transportation

    Average Transportation Costs in Alabama: $5,113 to $13,896 per year

    If you’re planning to drive through the Land of Dixie, you’ll want to keep an eye on your transportation costs. Fuel costs in the Southeast aren’t cheap, and those bills can quickly add up (particularly if you’re driving American muscle!)

    Depending on your ride of choice, family size, and the number of cars you choose to own, your transportation costs can vary widely. We’ve broken down estimates of these costs as calculated by MIT’s Living Wage Calculator .

    Family Makeup

    Average Annual Transportation Cost

    One adult, no children

    $5,113

    Two working adults, no children

    $9,378

    Two working adults, two children

    $13,896

    Health Care

    Average Health Care Costs in Alabama: $5,904 per person, per year

    The average annual per-capita cost of healthcare in Alabama is $5,904, according to the BEA’s Person Consumption Expenditures report.

    The Southeast region of the United States pays the third-lowest healthcare costs of any region in America after the Southwestern and Rocky Mountain states. Within the Southeast, Alabama has the second-lowest healthcare costs, with only South Carolina coming in cheaper.

    While healthcare costs can vary depending on your age, health history, and location, you can minimize your expenses by shopping policies across multiple insurance providers. Alabamans can shop for health insurance providers using the federal insurance marketplace, healthcare.gov .

    Child Care

    Average Child Care Costs in Alabama: $813 to $1,031 per child, per month

    Regardless of who you are, there’s no getting around childcare costs when it comes to having a family. Fortunately, Alabama happens to have the second-lowest childcare costs in the country, according to the Economic Policy Institute. Only Mississippi had lower childcare costs.

    However, that doesn’t mean that childcare is cheap; far from it. Depending on the type of care you need, childcare can cost thousands of dollars a month. This can be especially unforgiving for younger families where both spouses have to work.

    If you need help paying for childcare costs, the Alabama Department of Human Resources lets eligible families apply for Subsidized Day Care Services. Check out the Federal Child Care and Development Fund website for more information.

    We’ve provided estimates of the average child care costs in Alabama below, per 2021 data from costofchildcare.org .

    Type of Child Care

    Average Cost Per Month, Per Child

    Infant Classroom

    $1,031

    Toddler Classroom

    $813

    Home-based Family Child Care

    $822

    Taxes

    Highest Marginal Tax Rate in Alabama: 5%

    Alabama has a graduated-rate income tax structure where the highest tax bracket is assessed at a 5% marginal tax rate, according to the Tax Foundation’s State Individual Income Tax Rates and Brackets for 2021 .

    Taxes are a part of Alabama’s cost of living that can’t be avoided. Its top marginal tax rate isn’t too bad, especially when stacked against other southern states like South Carolina and West Virginia, which have top marginal tax rates of 7% and 6.5%, respectively.

    Considering that Mississippi and Kentucky also have 5% top marginal tax rates, Alabama’s 5% rate is par for the course when compared to its neighbors.

    Miscellaneous Costs

    Now that we’ve covered the everyday costs of living, let’s take a look at the costs of some of Alabama’s greatest attractions.

    •  Gallon of Milo’s Famous Sweet Tea: $2.98

    •  Tickets to the Iron Bowl: $236 to $1,422

    •  Adult tickets to the U.S. Space and & Rocket Center: $25

    •  Shrimp & Grits: $11.99 – $19.95

    Alabama’s collection of beautiful woodlands and gulf shores certainly doesn’t cost anything to visit; it’s one of those unique states where individuals can hike the Appalachian trail and enjoy sandy coastal beaches within the same day.

    The state of Alabama is also rife with historic attractions, from the U.S. Space & Rocket Center to the USS Alabama Battleship Memorial Park.

    However, the one defining feature of Alabama is football.

    Akin to a religion, you haven’t experienced college football until you’ve been to Alabama. The University of Alabama-Auburn University rivalry is one of the most heated rivalries in American football, and this matchup plays out every year at the annual Iron Bowl. Depending on your choice of seats, tickets can cost thousands of dollars!

    This matchup is especially heated as both schools are located within the same state and locals are split across each team. This contention plays out between neighbors, coworkers, and even within families.

    Alabama certainly has its vibes. Whether you’re trying to beat the hot summers, sipping on a sweet tea or your favorite brand of “coke;” or you’re enjoying a pulled pork barbeque cookout at the tailgate of your favorite football team, you’re sure to find something about Alabama that fits your niche.

    Recommended: What are the Average Monthly Expenses for One Person?

    How Much Money Do You Need to Live Comfortably in Alabama?

    While the amount you need to live comfortably will vary based on your lifestyle, MIT’s Living Wage Calculator cites that the typical single Alabaman will need to earn $13.77 an hour, or $28,642 per year, to qualify for a “living wage” in the state.

    When it comes to costs, Alabama doesn’t do half bad, as U.S. News & World Report’s Affordability Rankings ranked Alabama the 18th most affordable state in the union. The CCER also ranked it 10th on its lowest cost of living index. Depending on your personal tastes and income, a comfortable life in Alabama is more within reach than you may think.

    What City Has the Lowest Cost of Living in Alabama?

    The city of Anniston has the lowest cost of living in Alabama, according to the Council for Community and Economic Research’s (CCER) 2021 Cost of Living Index data.

    To help you compare the cost of living across different cities in Alabama, we’ve displayed the three cities with the lowest cost of living in the State.

    Anniston

    Originally an iron town founded in 1872, Anniston sits at the foothills of the Appalachian mountains on the cusp of the Talladega National Forest. The city is surrounded by scenic views and woodlands. It has the lowest housing costs of any major cities in Alabama according to the CCER’s 2021 data.

    Florence

    Florence is home to just under 41,000 residents and sits on the banks of the mighty Tennessee river. The city is host to gorgeous views of the riverfront and is home to the University of North Alabama, the oldest collegiate institution in the state. The city ranked well because it had the lowest healthcare costs of Alabama’s major cities.

    Mobile

    The Port City of Mobile, Alabama is the state’s only saltwater port and is home to almost 187,000 residents. Mobile is the first city in Alabama and was founded before Alabama even obtained statehood. The city of Mobile has the 2nd-lowest housing costs in the state, but also the highest healthcare costs, according to the CCER’s 2021 data.


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    Alabama can be a great option for football fans looking for a state with hot summers but great barbecue to make up for it. If the money you save doesn’t go directly to game tickets, you might find Alabama to be an affordable place to live and raise a family.

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