Living Paycheck to Paycheck? These Are the Friendliest States for Your Wallet

According to CNN Money, 70% of Americans today live paycheck to paycheck. A lot of the tight lifestyle is explained by a related stat from the U.S. Census Bureau: 24% of their pay goes to consumer debt payments.

Whether you’re approaching retirement age or decades away from it, it’s essential to leave debt behind and get busy saving for the future as soon as possible. The more time you have, the more you can take advantage of what’s been called the Eighth Wonder of the World: compound interest.

But as powerful as compound interest is, it won’t do a thing for your retirement prospects until you have something to invest. First you need enough breathing room between your income and your immediate needs.

What Are the Top 10 States Where You’re Least Likely to Live Paycheck to Paycheck?


Clearly debt is a primary factor in who’s struggling to get by financially. But how much does where you live impact your likelihood of living paycheck to paycheck? Although it’s not the main consideration, locale is a key factor because of how much average income and cost of living vary across the country. With that in mind, let’s look at the 2017 GoBankingRate.com list of the top 10 states offering the best mix of median income and cost of living.

1. Mississippi

  • Median household income per paycheck: $1,561.27
  • Total income left over after cost of living expenses: $766.06
  • Percentage of leftover income: 49.07%

Despite having the lowest median household income in America, residents of Mississippi are the least likely to live paycheck to paycheck because of the state’s incredibly low cost of living.

2. Arkansas

  • Median household income per paycheck: $1,615.19
  • Total income left over after cost of living expenses: $775.37
  • Percentage of leftover income: 48%

Similar to winner Mississippi, Arkansas overcomes its low median household income with even lower cost of living.

3. Oklahoma

  • Median household income per paycheck: $1,868
  • Total income left over after cost of living expenses: $891.52
  • Percentage of leftover income: 47.73%

Oklahomans benefit richly from two wallet-friendly factors—cheap gas and cheap housing.

4. Tennessee

  • Median household income per paycheck: $1,818.27
  • Total income left over after cost of living expenses: $854.97
  • Percentage of leftover income: 47.02%

This is another case where it’s less about the median household income and more about the high percentage (nearly half) of that income that stays in your wallet after you’ve taken care of living expenses.

5. Indiana

  • Median household income per paycheck: $1,943.54
  • Total income left over after cost of living expenses: $905.97
  • Percentage of leftover income: 46.61%

An inviting combination of affordable housing and food costs help the Hoosier state avoid paycheck-to-paycheck struggles.

6. Alabama

  • Median household income per paycheck: $1,721.73
  • Total income left over after cost of living expenses: $801.61
  • Percentage of leftover income: 46.56%

Alabamans devote on average just 19% of their pay to housing—one of the smallest percentages in America.

7. Kansas

  • Median household income per paycheck: $2,073.31
  • Total income left over after cost of living expenses: $958.78
  • Percentage of leftover income: 46.24%

Even after they’ve paid all their bills, Kansas residents still average nearly a grand of their paychecks left over—that’s the third highest nationwide.

8. Missouri

  • Median household income per paycheck: $1,932.23
  • Total income left over after cost of living expenses: $887.99
  • Percentage of leftover income: 45.96%

Only four states enjoy housing costs below 20% of the median household income per paycheck, and Missouri is one of them.

9. Kentucky

  • Median household income per paycheck: $1,739.04
  • Total income left over after cost of living expenses: $799.16
  • Percentage of leftover income: 45.95%

You won’t spend much here on food, housing or healthcare.

10. Michigan

  • Median household income per paycheck: $1,964.77
  • Total income left over after cost of living expenses: $902.58
  • Percentage of leftover income: 45.94%

Yet another state where affordable housing and groceries matter even more than median income in determining how much disposable income residents have.

As you consider which states might fit well with your own retirement needs, remember that where you live and what you earn are just small parts of a broader picture of financial success. Far more important is how you’re able to put what you know into practice. Behavior is the primary factor determining your financial wellness, both today and when you retire.

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