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Get ready to enjoy blue skies if you make your way to Arizona. The Grand Canyon State has an average of 286 sunny days a year, which is a lot more than the national average of 205.
That means you can hit the trails in Saguaro National Park without having to worry about too much rain. There are also plenty of big cities with flourishing housing markets such as the like Phoenix housing market and the Tucson housing market in Arizona.
If sunshine isn’t enough to sway you, read on for a better idea of what the Arizona cost of living is like so you can see if a move to the state will keep your budget happy and healthy.
What’s the Average Cost of Living in Arizona?
Average Cost of Living in Arizona: $35,264 per year
It turns out that living in Arizona may put a significant dent in your monthly budget.
Arizona ranks 36th when it comes to which states have the lowest cost of living, according to MERIC’s 2021 Cost of Living Index data gathered in the third quarter of 2021. If you’re looking to move to the Southwest, New Mexico is a much more affordable option. In the same ranking, New Mexico was found to have the 10th lowest cost of living.
So how much does coming in 36th place cost Arizona residents? According to 2020 data from the Bureau of Economic Analysis, the average total personal consumption cost in Arizona is $35,264 per year. Here’s how that total cost breaks down:
Average Annual Per-Capita Cost in Arizona
Housing and Utilities
Food and Beverages (non-restaurant)
Gas and Energy Goods
All Other Personal Expenditures
Housing Costs in Arizona
Average Housing Costs in Arizona: $788 to $1,551 per month
With more than 3 million housing units in Arizona, according to 2019 census data, you should have no trouble finding a home in Arizona, as long as the housing prices are within your budget. The typical home value in Arizona in late 2021 was nearly $392,000, according to Zillow.
How much you’ll spend on housing each month will vary depending on if you rent or buy. Here’s what you can expect to spend, according to the latest census data.
• Median monthly mortgage cost: $1,434
• Median studio rent: $788
• Median one-bedroom rent: $889
• Median two-bedroom rent: $1,083
• Median three-bedroom rent: $1,284
• Median four-bedroom rent: $1,551
• Median gross rent: $1,101
Where you want to live in Arizona can play a big role in how much it costs to buy a home. Here are typical home values for some major Arizona cities, according to Zillow, as of late 2021.
Typical Home Price
Lake Havasu City
Utility Costs in Arizona
Average Utility Costs in Arizona: $421 per month
Even once you own a home and pay it off fully, you’ll still need to pay for utilities every month. Here’s what the average monthly utility bill expenses look like in Arizona.
Average Arizona Bill
Cable & Internet
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 Arizona: $301 per person, per month
Food is a major ongoing expense no matter where you live, but how much should you plan to spend on food per month in Arizona?
As previously noted, the Bureau of Economic Analysis found Arizona’s average annual (non-restaurant) food cost per capita to be $3,614, which breaks down to about $301 per person, per month. That said, where you live in Arizona can play a role in how much food costs you.
According to the Council for Community and Economic Research, , which ranks food expenses in major American cities, these are the rankings for Arizona cities’ grocery costs for the second quarter of 2021, from lowest to highest.
Grocery Items Index
Average Transportation Costs in Arizona: $4,900 to $13,317 per year
Getting from place to place can add up, especially if you have two commuting adults or children in your family.
The following data from MIT’s Living Wage Calculator can give you an idea of how much you’ll spend on transportation in Arizona, depending on your family structure..
Average Annual Transportation Cost
One adult, no children
Two working adults, no children
Two working adults, two children
Average Health Care Costs in Arizona: $6,418 per person, per year
According to the 2020 Bureau of Economic Analysis Personal Consumption Expenditures by State report, the average annual per-capita cost of health care in Arizona is $6,418.
It’s worth noting that how much you’ll spend on health care can vary greatly depending on your specific health care needs and what type of coverage you have.
Average Child Care Costs in Arizona: $981 to $1,283 per child, per month
No matter what your family’s financial situation is, child care is likely to be a large expense for you, especially during the early years of your child’s life. How much you’ll spend each month can depend on your child’s age.
For example, in Arizona you’ll spend an average of $1,283 a month on care in an infant classroom but $981 a month for care in a toddler classroom.
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.
For assistance covering these expenses, the Arizona Department of Economic Security offers child care assistance for working low-income families, teen parents attending high school or GED classes, domestic violence or homeless shelter residents, and parents who can’t care for their children because of emotional or physical conditions.
According to 2021 data from costofchildcare.org these are the average monthly child care costs by type of care:
Type of Child Care
Average Cost Per Month, Per Child
Home-based Family Child Care
Highest Marginal Tax Rate in Arizona: 8%
Arizona charges residents a state income tax. While some states have a flat income tax rate, Arizona’s is offered in graduated brackets based on income.
The MERIC ranking found Arizona even less affordable — 36th for states with the lowest cost of living. (Mississippi had the lowest; Hawaii, the highest on that list.)
What City Has the Lowest Cost of Living in Arizona?
To make it easier to obtain a comfortable lifestyle in Arizona, let’s get to know the three major Arizona cities with the lowest cost of living, according to the Council for Community and Economic Research’s Cost of Living Index for the second quarter of 2021.
A cost-of-living ranking of 91.6 snagged Bullhead City the top spot on the council’s index for Arizona. Bullhead City is on the east bank of the Colorado River and spans 57.2 square miles, so you’ll have plenty of areas to explore if you move there.
With more than 140,000 residents, 48,600 households, and 7,000 businesses, according to the most recent census data, this Arizona city is sure to hold plenty of pleasant surprises for new residents. And a cost-of-living index of 94.9 is a good sign for your wallet.
In Yuma, getting moving and enjoying the great outdoors is a piece of cake. Close proximity to the Colorado River gives you the opportunity to enjoy water activities; plus Yuma (cost-of-living index of 96.1) has tons of scenic trails you can hike on.
SoFi Home Loans
The cost of living in Arizona isn’t low, but if the land of cacti and coyotes speaks to you,
you may be on the hunt for an Arizona home and a home loan.
Although there are many home loans on the market to choose from, SoFi offers a range of home loans at competitive interest rates and with as little as 5% down.
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