Cost of Living in Kentucky

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    (Last Updated – 12/2021)

    The birthplace of bourbon, Abraham Lincoln, and the famed Kentucky Derby has a lot to be proud of.

    From the majestic foothills of the Appalachian Trail to the legendary distilleries of the “bourbon trail,” Kentucky is chock-full of history, beauty, and culture.

    Its 4.4 million residents can testify that there are plenty of reasons to check out the Bluegrass State, and its low cost of living is one of them. Here are details about the various expenses that make up the cost of living in Kentucky.

    What’s the Average Cost of Living in Kentucky?

    Average Cost of Living in Kentucky: $36,574 per year

    The average cost of living in Kentucky is $36,574 per person, according to the most recent personal consumption expenditure data from the Bureau of Economic Analysis’ latest Personal Consumption Expenditures data .

    Living in Kentucky is generally very affordable; Kentucky was ranked the state with the ninth-lowest cost of living in the United States by U.S. News & World Report .

    Looking at the Southeast, which statistically has a lower cost of living than the rest of the United States, Kentucky actually weighs in as the third-most affordable state out of 12, trailing only West Virginia and Arkansas.

    Here’s a breakdown of the average annual expenditures by category.


    Average Annual Per-Capita Cost in Kentucky

    Housing and Utilities


    Health Care


    Food and Beverages (non-restaurant)


    Gas and Energy Goods


    All Other Personal Expenditures


    Housing Costs in Kentucky

    Average Housing Costs in Kentucky: $574 to $1,187 per month

    Kentucky’s typical home value in October 2021 was about $178,500, Zillow said. Compare that with the national median sales price of nearly $354,000 that month, according to the National Association of Realtors®.

    Kentucky housing prices are more affordable than the rest of the country for both renting and owning.

    However, Kentucky isn’t immune to the rising home prices seen around the country in 2020 and 2021. Kentucky home values rose 13.9% from 2020 to 2021, but that is slower than the average growth in U.S. home prices over that same period: 19.2%.

    The most recent census data provides a sense of typical monthly housing costs.

    •  Median monthly mortgage cost: $1,178

    •  Median studio rent: $574

    •  Median one-bedroom rent: $652

    •  Median two-bedroom rent: $760

    •  Median three-bedroom rent: $905

    •  Median four-bedroom rent: $1,067

    •  Median gross rent: $1,187

    Housing costs will vary depending on your location. Take a look at the typical home values for major cities in Kentucky, according to Zillow 2021 housing data.

    Kentucky City

    Typical Home Price

    Louisville-Jefferson County




    Bowling Green






















    Mount Sterling














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

    Utility Costs in Kentucky

    Average Utility Costs in Kentucky: $401 per month

    Utility expenses will take a bite out of your monthly budget. Here are some of the typical utility charges that Kentuckians pay every month.


    Average Kentucky Bill





    Cable & Internet




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

    Groceries & Food

    Average Grocery & Food Costs in Kentucky: $298.42 per person, per month

    If Kentucky’s average monthly cost for non-restaurant food and groceries is $3,581, that’s $298.42 a month.

    With the notable exceptions of Virginia and North Carolina, the majority of the Southeast enjoys below-average food and grocery costs.

    Of course, food costs will vary widely depending on where you live within the state. For example, food in Lexington can be very affordable when compared with other major cities in the south. On the same scale, a more cosmopolitan city like Louisville ranks closer to the national average.

    Below are the city rankings from the Council for Community and Economic Research, for food costs in Kentucky and four neighbors, Tennessee, Virginia, West Virginia, and North Carolina.


    Grocery Items Index

    Roanoke, Virginia


    Lynchburg, Virginia


    Raleigh, North Carolina


    Knoxville, Tennessee


    Lexington, Kentucky


    Winchester, Virginia-West Virginia


    Danville City, Virginia


    Memphis, Tennessee


    Richmond, Virginia


    Blacksburg, Virginia


    Thomasville-Lexington, North Carolina


    Morristown, Tennessee


    Morgantown, West Virginia


    Louisville, Kentucky


    Winston-Salem, North Carolina


    Lexington-Buena Vista-Rockbridge, Virginia


    Nashville-Murfreesboro, Tennessee


    Chattanooga, Tennessee


    Asheville, North Carolina


    Hampton Roads-SE Virginia


    Charlottesville, Virginia


    Salisbury, North Carolina


    Charlotte, North Carolina


    Kingsport, Tennessee


    Arlington, Virginia


    Alexandria, Virginia



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

    Whether you’re commuting to work or making an annual pilgrimage to see the University of Kentucky’s Wildcats play, transportation costs can add up. What’s more, these figures will change depending on the size of your household.

    Here’s a breakdown of transportation costs in Kentucky, according to MIT’s Living Wage Calculator .

    Family Makeup

    Average Annual Transportation Cost

    One adult, no children


    Two working adults, no children


    Two working adults, two children


    Health Care

    Average Health Care Costs in Kentucky: $6,561 per person, per year

    According to the Bureau of Economic Analysis’ latest report, annual health care costs in Kentucky are typically around $6,561 per person.

    The figure will vary depending on the quality of an individual’s health insurance and their medical needs.

    Those looking for affordable health insurance in Kentucky can find more information through the Kentucky Health Benefit Exchange .

    Child Care

    Average Child Care Costs in Kentucky: $813 to $1,189 per child, per month

    Child care costs can really put a dent in parents’ budgets. How much of a dent can depend on the type of care sought.

    For parents unable to bear the full brunt, the state Child Care Assistance Program helps eligible families pay for child care.

    Typical costs in Kentucky, according to .

    Type of Child Care

    Average Cost Per Month, Per Child

    Infant Classroom


    Toddler Classroom


    Home-based Family Child Care



    Kentucky state income tax: 5%

    Kentucky is one of 10 states with a single-rate income tax structure, meaning that all Kentucky residents pay the same income tax rate regardless of how much they earn.

    Meanwhile, the majority of U.S. states employ graduated-rate income tax structures, as does the federal government.

    A flat tax of 5% is levied on income earned in Kentucky, which is slightly below the national average. However, local cities and counties can levy additional income taxes on top of the state tax.

    According to the Tax Foundation’s latest study on state and local tax burdens, Kentucky ranks 25th in terms of its effective tax rate, placing it in the middle of the country when it comes to tax burdens. Tax burden measures the total amount of taxes paid, including sales, income, and property taxes.

    Miscellaneous Costs

    Now that we’re done with everyday expenses, let’s take a look at the price tags on the local food and fun that Kentucky’s known for.

    •  General admission tickets to the Kentucky Derby: $65 to $85

    •  750 ml bottle of Jim Beam Kentucky Bourbon: $17.49

    •  Eight-piece bucket of Kentucky Fried Chicken: $16.49

    •  A mint julep: $10 to $15

    •  Louisville Slugger: $69.99

    Dressing up in Southern digs and attending the Kentucky Derby costs as little as $65, but choice seats for the Derby can easily cost thousands of dollars, and exclusive seats for the elite few can cost as much as $13,000 apiece!

    Whiskey aficionados will fit right in, as Kentucky happens to be the birthplace of bourbon; legend has it that Elijah Craig invented Kentucky bourbon using charred barrel-aging techniques. Today, 95% of the world’s bourbon is made and aged in Kentucky.

    Connoisseurs who want to check out the bourbon production process can take the bourbon trail, which tours some of Kentucky’s most famous distilleries. Admission to each distillery can cost anywhere from $5 to $20, and locations open to tours include household names like Buffalo Trace, Wild Turkey, and Maker’s Mark.

    Whether you’re munching on a Hot Brown sandwich while sipping any kind of “coke,” or enjoying mint juleps at the Derby, the Bluegrass State has something for everyone.

    A word about that nickname: It’s not about music; it’s about grass.

    Recommended: Average Monthly Expenses for One Person

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

    According to MIT’s Living Wage Calculator, the average single, childless individual working a standard 40-hour work week 52 weeks a year needs to earn $13.48 per hour, or $28,038 a year, to qualify for a living wage.

    As mentioned, Kentucky has the ninth-lowest cost of living in the United States, according to U.S. News & World Report’s Affordability Rankings. Within the Southeast, Kentucky has the third-lowest cost of living among 12 states.

    MERIC ranks Kentucky a bit less affordable, placing the state 20th in its 2021 Third Quarter Cost of Living data series. That means Kentucky is still among the 25 states with the lowest cost of living, in MERIC’s assessment.

    What City Has the Lowest Cost of Living in the Southeast?

    To give you a sense of how the cost of living in Kentucky compares with the rest of the South, here are the three cities with the lowest cost of living, according to the Council for Community and Economic Research’s Second Quarter Cost of Living Index.

    Jackson, Mississippi

    The capital of and most populous city in Mississippi also happens to have the lowest cost of living in the entire Southeast region. The “City with Soul” was home to prominent musicians in the blues, gospel, and jazz scenes.

    Tupelo, Mississippi

    Tupelo has the second-lowest cost of living of any major city in the Southeast. Located in the seat of Lee County in northern Mississippi, the city is a hub of vibrant Southern culture and also happens to be the birthplace of Elvis Presley.

    Knoxville, Tennessee

    Knoxville has the third-lowest cost of living in the South and is the third-most populous city in Tennessee. It’s the birthplace of Mountain Dew and celebrities like Kenny Chesney.

    SoFi Home Loans

    Raise a mint julep or bourbon toast to Kentucky, where an affordable lifestyle awaits. Will your next home have a lawn of bluegrass?

    Although there are many home loans on the market to choose from, SoFi offers a range of mortgage loans at competitive interest rates and with as little as 5% down.

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