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The 10 Most (And Least) Expensive States In America

The 10 Most (And Least) Expensive States In America

2017 cost-of-living index figures by C2ER (Council for Community and Economic Research) are fresh out of the oven. Well, despite continued widespread recovery tactics, where you live in America has a great deal of impact on what economic challenges you face. No country is immune from economic slumps but higher than average state autonomy in America means economic growth varies by state. While one might expect to see California and New York on the list of most expensive states in America, shifting economic landscapes make several unexpected states more expensive as well. Complicated economic factors, as well as public officials struggling to meet the challenges of the future, make these ten states the most expensive and most affordable in America.

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    Most Expensive States

    1. Hawaii

    Take palm-fringed, sandy beaches, sizzling cultural melt, and add incredibly beautiful flora and fauna – and that’s the ‘magical’ allure of Hawaii. All these goodies, however, come with a steep price. Looking to buy a home in Hawaii? That’ll set you back a whopping $1 million on average. And that isn’t all – it’ll cost you nearly$3000 to rent a two-bedroom apartment and the monthly energy bill is estimated at $455.51, a figure that’s about 3 times what you’d shed in some leafy suburbs of California. But you live in Hawaii, the Aloha State!

    2. New York

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    Chiming at the second place is the Empire State. That in and of itself isn’t surprising at all in a state where the average home goes for $1.6 million (yes, you read that right). Looking to rent? Forget about it; a cozy two-bedroom apartment averages $4200 in monthly rent. Of course, New York is vast and uneven recovery/growth is partly to blame. Despite the improvement in unemployment rates since the end recession, New York continues to battle with aging infrastructure and starkly different growth rates. But there are areas like Rochester (average home price is $287000) where life is surprisingly easier than Manhattan. Nonetheless, you will still shed more than $160 for monthly energy bill there.

    3. California

    Not surprisingly, California is also one of the most expensive states in America. High housing costs in this state have long made it one of the pricier states, but population growth is another concern. At around $1 million, the average price of a home in metro San Francisco is the 3rd highest nationwide. California is also the number one state for poverty, reportedly carrying $1.6 billion in debt. While the state holds only 12% of the American population, nearly 33% of all welfare recipients are Californian.

    4. Massachusetts

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    It’s official – it’s now more expensive to live in Massachusetts than Alaska! The cost of groceries is through the roof, with 24-ounce T-bone steak going for more than $62! While the average price of a home is $634,233, expect to pay 3 or even 5 more times in most Newton, Framingham, and Cambridge neighborhoods. At $2668, the average rent for a sweet two-bedroom apartment in Boston is the 4th highest in the US. And the energy bill of $287.63 is close to $100 more than would be in Anchorage.

    5. Alaska

    A newcomer to this list, Alaska – the moose state – offers unsurpassed natural beauty and close-knit culture you’ll never find elsewhere. With only 760 farms, it’s no surprise that most produce and food items are hauled from different states. And that trickles down to tons of other costs. A loaf of bread which goes for a mere $1.79 in Iowa will set you back $4.68 in Anchorage. But again, this is Alaska – the land of amazing wildlife. Paying utility bills ($201.39 for energy) and healthcare isn’t a walk in the park either.

    Least Expensive States

    1. Mississippi

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    One of the less densely populated states, Mississippi is one of the least expensive states to live in. With low per capita income, the state’s housing costs remain correspondingly low as well (the average home price of $199,028), making the cost of living affordable. Mississippi previously relied mainly on cotton production to drive the economy. In the last two decades or so, however, Mississippi has diversified agricultural and livestock industries, ensuring economic growth. Now focusing on producing rice, soybeans, chicken, and catfish, Mississippi continues to pursue diversification to enrich its economy, a strategy which has been successful so far.

    2. Indiana

    Next up, is Indiana, a state famous for the Indianapolis 500 and low-cost homes (averaged at $270,204). At the Crossroads of America, you can expect rock-bottom prices for groceries and other basic food items. A head of lettuce goes for a paltry $1.04 while a pound of coffee and ground beef will set you back just $4.43 and $3.74 respectively. A boom in the local economy has pushed prices up a teensy bit, but you can still pick up a check at dinner.

    3. Michigan

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    The Great Lakes State, much like Mississippi and Arkansas, offer low-cost housing (averaged at $274,355) for consumers, yet it’s consistently ranked in the top ten for best states to do business. After all, this is the home of the American auto industry. The average gas price in Detroit was about $2.04 when it hit more than $3 in most parts of the country. The auto industry has bounced back, healthcare is thriving and high-tech jobs are supplanting manufacturing, helping this state become more competitive to prospective employers, keeping the economy working for Michigan citizens.

    4. Arkansas

    Like Mississippi, Arkansas is a more rural state, offering consumers low housing costs. Arkansas also boasts incredibly low costs for doing business, attracting six Fortune 500 companies to the state. Rent for a two-bedroom apartment is just $700 a month and the monthly energy bill is $145.79, roughly half of what you’d pay in Massachusetts. In short, Arkansas’ low cost of living is balanced by a lower household income than average but still remains a top state for the economic climate.

    5. Oklahoma

    Rounding up our list is the Sooner State, the home of undulating wheat fields. And the cost of groceries, including a loaf of wheat bread for less than $3, is appropriately cheap. Well, that isn’t all – a grand 2,400 square-foot home will only chip off around $300K from your bank account. With a sub-$150 monthly energy bill and low-cost health care, Oklahoma is certainly one of the best places you’d be lucky to call home.

    Featured photo credit: US Department of Interior via om.wikipedia.org

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    Alicia Prince

    A writer, filmmaker, and artist who shares about lifestyle tips and inspirations on Lifehack.

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    Last Updated on March 3, 2021

    Top 6 Hacks on How To Build Credit Fast

    Top 6 Hacks on How To Build Credit Fast

    When done right, credit can open doors and provide a lifestyle that you never imagined possible. Anything from flying around the world in first-class and staying at 5-star hotels entirely for free to starting and scaling businesses. It’s also an area where it can be easy to make mistakes and hard to recover from without the right information. In this article, I will break down how you can build credit fast so you can open doors in your life!

    When you start to think about improving your credit score, you have to answer three important questions first:

    1. What are you trying to achieve by having good credit?
    2. What really is your credit score?
    3. How is your credit score calculated?

    What Are Your Credit Goals?

    Having a high credit score is great, but ultimately, your credit score is a tool in your personal finance arsenal that you can use to open doors. The first question you should ask yourself is “what will a higher credit score do for me?”

    I work with many clients directly at Freedom Travel Systems to help them fully leverage the power of their credit so they can enjoy free luxury travel and start or grow their business. For my clients and many others, here are a few common goals many credit-savvy individuals have:

    • Free Travel – getting access to travel rewards cards so you can get tons of free travel and even get first-class flights, hotel suites, and luxury amenities all for free
    • Start/Grow a Business – getting access to business credit so you can start and grow a business with 0% or low-interest financing that does not impact your personal credit
    • More Approvals – getting approved for credit cards, auto loans, or mortgages so you improve your lifestyle or build your personal wealth
    • Better Rates – getting better interest rates on any loans you get will save you tens or hundreds of thousands of dollars over your lifetime

    What Is Your Credit Score?

    Your credit score is simply a 3-digit number that tells potential lenders how reliable of a borrower you are. Keep in mind that lenders, such as banks and credit issuers, stay in business by lending. Their goal is to find the people that have the highest probability of paying them back and they assess this primarily through your credit score.

    What’s important to know is that there are two major scoring models used to create your scores. These scores are your FICO Score and your Vantage Score. More than 90% of lenders rely on your FICO score, so when you are checking your score, you want to make sure you see the actual score that the lenders use. And no, checking your own score does not hurt your credit!

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    Then enters the 3 main credit bureaus, which are essentially agencies that collect credit information on you. These are Experian, Equifax, and TransUnion. These bureaus then apply a scoring model to the information they have on you and voila, you now have a credit score! Bureaus sometimes have different information on your report, which is why you will see 3 different scores.

    How Is Your Credit Score Calculated?

    Next, you need to understand how the credit score is calculated. This will provide a high-level overview, but there is more detail to each of these factors alone.

    There are 5 main factors in the calculation of your credit score:[1]

    1. Payment History (35%) – This refers to the amount and percentage of on-time payments you have.
    2. Utilization (30%) – This is how much revolving credit you use as a percentage of the total revolving credit issued to you. Note that installment loans like auto-loans or mortgages do not count towards this while credit cards do.
    3. Age of Credit (15%) – This refers to how long your credit history is, primarily your “average age.”
    4. Credit Mix (10%) – This is how many different types of credit you have. For example, there are credit cards, student loans, auto loans, mortgages, personal loans, and lines of credit.
    5. New Credit (10%) – This primarily refers to how many inquiries you have for new credit.

    Top 6 Hacks on How to Build Credit Fast

    Now that you’ve learned more about your credit score, here are the top 6 tips on how to build credit fast.

    1. Don’t Close Your Cards

    Many of us are taught that getting a new credit card is bad and having too many will hurt your score. In fact, the opposite is true. You want to have many positive accounts reporting to your credit report. Logically, this makes sense because having more accounts with more on-time payments shows that you are a more reliable borrower. You just don’t want to open too many accounts too quickly since that can hurt your “new credit” factor.

    Instead of closing a card, what you should do is simply keep the card open and put a small subscription service on it monthly. Why? Because each time you have an on-time payment, it helps build your payment history, the largest factor of credit.

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    If you close a card, you are missing on potential on-time payments, age of credit, credit mix, and also lowering the total credit lent to you so your utilization percentage may go up. If you have an annual fee on a card you don’t like, see if there is a “no-fee” version of the card and downgrade it to that card rather than close it.

    2. Use Autopay to Never Miss a Payment

    This one is easy to do and easy not to do. Go into your credit card account and set up auto-pay. You can choose to either pay the full amount, the statement balance, or the minimum payment. Personally, I like to set up autopay to pay the minimum payment so that I never get a late payment. Then, I go in and manually pay the statement balance each month by the payment due date.

    This helps me personally see my spending and have a manual review of my charges while ensuring, not have to pay interest, and still get the benefit of making sure that I never miss a payment if something goes wrong. Think about it, if you were to have a medical or family emergency, the last thing you want to experience on the back end of that is a late payment and a drop in your credit score. So, set up autopay.

    A pro tip is to update your payment due dates across all bills and accounts to be the same so that you can “time batch” the process and have one time a month where you sit down and handle your payments. You can do this by simply contacting the credit card company or doing it online.

    3. Get a Credit Limit Increase to Lower Your Utilization

    One of the factors that get most people into trouble is using too much of their allotted total credit. Their utilization, which is the percentage of revolving credit they use, goes up, and their score tanks. You should aim for less than 30%, and in an ideal world, less than 10%.

    To help drive this down, call your credit issuer and ask for a credit limit increase. This will help increase the total amount of credit extended to you and drop your utilization. Oftentimes, they will only give it to you when your utilization is fairly decent (less than 50%), so work to pay it down as best as possible before doing this. You should ask if the credit limit increase will give you an inquiry as some banks do a hard inquiry while some do not. If they do a hard inquiry, it is often better to just get a new card altogether or pass.

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    4. Add Authorized Users to Increase Your Age, Add History, and Decrease Utilization

    This is one of the best hacks out there as it helps with the 3 biggest factors of improving your credit: payment history, utilization, and age. This concept is also called “credit piggybacking” where someone with great credit history on a card adds an authorized user (AU) to the card. When the AU gets added, the credit history and information from that card are added to the AU’s report!

    This is extremely helpful for people with young credit because it can drastically increase your age of accounts. It can also help many people with limited payment history or high utilization.

    Please be aware that anything good or bad on that account you are added to will show up on your report. So, you want to avoid any cards with negative marks or high utilization. That being said, it is a one-way street, so nothing that you do with your credit can impact the primary account holder.

    This is so valuable that there are companies that sell AU accounts. I always suggest starting with your family and/or personal network first as there are likely people in your network that can help!

    5. Space Out Your Application Strategy

    New credit is the smallest factor of credit, but it still matters! If you are looking to build up your credit, you should space out your applications. If you apply for too much credit in a short period, it looks very needy in the eyes of the lenders. For this reason, it is safest to apply for cards slowly over time unless you have really studied more in-depth how this works. A good rule of thumb is once every few months.

    If you are in the credit game for the hopes of getting tons of credit card points for free travel, which is what I personally take full advantage of, you will want to familiarize yourself with the different bank rules and card promotions to put together the right application strategy. Applying blindly will waste inquiries and leave tons of benefits on the table!

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    6. Review Your Report for Negatives

    If you have any negative or “derogatory” marks on your credit report, this will hurt you drastically. They do impact you less as they age, however, you should review your credit report to ensure that everything on your report is 100% accurate and actually yours. Wrong information ends up on credit reports all the time and you will want to take personal responsibility for making sure it is accurate.

    The “burden of proof” is on the credit bureau to confirm that any information on your report is in fact accurate. If you find inaccuracies, you can dispute that with them, or you could consider getting a credible credit repair company to help you.

    Final Thoughts

    There you have it, the top 6 tips on how to build credit fast so you can get closer to reaching your goals. Now that you’ve learned more about how credit score works and how you can improve yours, you’ll hopefully be able to make better financial decisions and achieve your financial goals quicker.

    More Tips on How to Build Credit Fast

    Featured photo credit: CardMapr via unsplash.com

    Reference

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