Cost of Living in Kentucky

(Last Updated – 04/2023)

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 4.5 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: $40,816 per year

The average cost of living in Kentucky is $40,816 per person, according to 2021 personal consumption expenditure data from the Bureau of Economic Analysis .

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.

Category	Average Annual Per-Capita Cost in Kentucky
Housing and Utilities	$6,436
Health Care	$7,430
Food and Beverages (non-restaurant)	$3,581
Gas and Energy Goods	$1,263
All Other Personal Expenditures	$21,983

Housing Costs in Kentucky

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

Kentucky’s typical home value in February 2023 was $188,241, Zillow said. Compare that with the national median sales price of $359,000 for U.S. homes, 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. Kentucky home values rose 9.3% over the past year, which is actually faster than the average growth in U.S. home prices over that same period: 6.8%.

The 2021 census data provides a sense of typical monthly housing costs.

•  Median monthly mortgage cost: $1,241

•  Median studio rent: $573

•  Median one-bedroom rent: $677

•  Median two-bedroom rent: $831

•  Median three-bedroom rent: $954

•  Median four-bedroom rent: $1,218

•  Median five-bedroom (or more) rent: $1,236

•  Median gross rent: $830

Housing costs will vary depending on your location. Take a look at the typical home values for major cities in Kentucky, according to Zillow January 2023 housing data.

Kentucky City	Typical Home Price
Louisville	$236,958
Lexington	$259,983
Bowling Green	$220,186
Elizabethtown	$201,798
London	$139,219
Owensboro	$180,857
Richmond	$207,811
Paducah	$137,797
Frankfort	$199,858
Somerset	$171,933
Danville	$178,534
Glasgow	$158,874
Mount Sterling	$155,063
Bardstown	$224,905
Madisonville	$119,988
Murray	$160,518
Mayfield	$143,619
Campbellsville	$158,103
Middlesborough	$83,890
Maysville	$135,030

Utility Costs in Kentucky

Average Utility Costs in Kentucky: $386 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.

Utility	Average Kentucky Bill
Electricity	$125
Gas	$128
Cable & Internet	$102
Water	$31

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 2022; and Rentcafe.com, What Is the Average Water Bill?

Groceries & Food

Average Grocery & Food Costs in Kentucky: $308.58 per person, per month

If Kentucky’s average monthly cost for non-restaurant food and groceries is $3,703, that’s $308.58 a month.

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

Below are the city rankings from the 2022 Council for Community and Economic Research , for food costs in Kentucky and four neighbors, Tennessee, Virginia, West Virginia, and North Carolina.

City	Grocery Items Index
Roanoke, Virginia	88.9
Lynchburg, Virginia	89.8
Knoxville, Tennessee	89.9
Blacksburg, Virginia	90.1
Raleigh, North Carolina	91.6
Memphis, Tennessee	91.9
Hampton Roads-SE Virginia	92.3
Lexington, Kentucky	93.3
Danville City, Virginia	93.5
Louisville, Kentucky	93.5
Winchester, Virginia-West Virginia	93.6
Richmond, Virginia	94.1
Morgantown, West Virginia	96.4
Chattanooga, Tennessee	96.5
Thomasville-Lexington, North Carolina	96.6
Asheville, North Carolina	97.1
Charlottesville, Virginia	97.1
Charlotte, North Carolina	97.4
Nashville-Murfreesboro, Tennessee	97.5
Morristown, Tennessee	98.1
Winston-Salem, North Carolina	98.9
Salisbury, North Carolina	100.4
Arlington, Virginia	110.3
Alexandria, Virginia	110.4

Transportation

Average Transportation Costs in Kentucky: $5,477 to $15,530 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 for 2022.

Family Makeup	Average Annual Transportation Cost
One adult, no children	$5,477
Two working adults, no children	$9,851
Two working adults, three children	$15,530

Health Care

Average Health Care Costs in Kentucky: $7,430 per person, per year

According to the Bureau of Economic Analysis’ latest report, annual health care costs in Kentucky are typically around $7,430 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: $750 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 costofchildcare.org .

Type of Child Care	Average Cost Per Month, Per Child
Infant Classroom	$1,189
Toddler Classroom	$813
Preschooler Classroom	$750
Home-based Family Child Care	$1,145

Taxes

Kentucky state income tax: 4.5%

Kentucky is one of 11 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 as of tax year 2023, 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 State Individual Income Tax Rates and Brackets for 2023 , Kentucky ranks 17th in terms of its effective tax rate, placing it in the lower-to-middle end 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: $67 to $87

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

•  Eight-piece bucket of Kentucky Fried Chicken: $18.99

•  A mint julep lemonade: $10 at Doc’s Bourbon Room

•  Louisville Slugger: $69.99 and up

Dressing up in Southern digs and attending the Kentucky Derby costs as little as $67, 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 $15.45 per hour, or $32,136 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 22nd in its 2022 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 is the city with the lowest cost of living, according to the Council for Community and Economic Research’s Second Quarter Cost of Living Index.

Tupelo, Mississippi

Tupelo has the 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.