If you thought it was more expensive to live in New Hampshire than a lot of other places, you can now back it up with a study that’s making the rounds online. A Smartasset analysis of how much income it takes to live in each state ranked the Granite State 12th for individuals and 11th for a family of four.
The “good news” is that of the six New England states, Massachusetts and Connecticut are even more expensive to live in.
The analysis used the 50/30/20 budgeting rule to determine the salary needed to live comfortably – 50% of your income for living expenses and necessities, 30% for things you want but don’t need and 20% for savings.
An individual in New Hampshire needs an annual pre-tax income of $103,085 to live comfortably, using the 50/30/20 rule. A family of four needs an income of $259,501. SmartAsset, a financial advisor resource, used MIT Living Wage Calculator data and then calculated the cost for each state of housing, food, transportation, income tax and other expenses. A family of four is defined as two working adults with two children.
“As cost of living increases seem to permanently make their way to important budget items, individuals and families increasingly need more income to support a comfortable lifestyle over the long-term,” the report said. “This means being able to afford hobbies, vacations, retirement savings, education funds, and the occasional emergency – in addition to necessities like housing, groceries, transportation and medical expenses.”
While it doesn’t break down the data for each state, New Hampshire’s housing costs likely are a factor in its high rank. The median sales price for a single-family home in the state in May was $540,000, according to the New Hampshire Association of Realtors. Median means that half of the homes cost more, and half less.
While the rule of thumb is that no more than 30% of monthly income should go to housing, New Hampshire residents pay much more than that. The state’s affordability index for May was 55, according to NHAR, which means that the state’s median income is 55% of what’s needed to afford the monthly cost of a single-family home, including mortgage payment, insurance and property tax.
Renters in New Hampshire don’t escape the high housing costs. The average rent in the state in May was $2,184 for an 879-square-foot apartment, according to rentcafé.com. The national average was $1,761 for 904 square feet.
New Hampshire is one of nine states with no state income tax and one of five with no sales tax (Alaska is the only other state to have neither tax), so it relies heavily on property taxes to fund state services, which drive up housing costs for both owners and renters.
The Lincoln Land Institute ranks the state first in the nation in median property tax paid for owner-occupied homes, given the median home value, third in median amount paid and fourth in effective tax rate.
New Hampshire was not the most expensive New England state on the list. Massachusetts came in second for an individual with $120,141 needed, and first of the 50 states for a family of four, which must earn $313,747 to live comfortably. Connecticut was 10th for individuals, at $105,165, but 3rd for families, at $290,368.
Hawaii was the most expensive state for individuals, at $124, 467, and second for a family of four, at $294,362.
The least expensive state to live for an individual is West Virginia, where $80,829 will get you a comfortable life. The least expensive for a family of four is Mississippi, at $186,618.