Kentucky, known as the "Bluegrass State", is one of the cheapest states to live in with housing 33% below average. Here is everything you need to know about the cost of living in the Bluegrass State — from housing and groceries to taxes, utilities, childcare, and what salary you actually need.
Here is what a typical month costs in Kentucky for a single person earning the median income of $55,600/year:
Each category shows how Kentucky compares to the national average. Green means cheaper, yellow means similar, orange/red means more expensive.
Adjust your salary to see a detailed monthly budget breakdown for living in Kentucky.
Select a state to see how much salary you would need there to maintain the same lifestyle you have in Kentucky.
The most popular cities for residents and newcomers in Kentucky:
Housing is the single biggest expense in Kentucky, as it is everywhere. The median home price in Kentucky is $225,000, and the median rent for a one-bedroom apartment is $825/month. With a housing cost index of 67, Kentucky housing is 33% cheaper than the national average.
Housing in Kentucky is a genuine advantage. The low cost of housing frees up income for savings, investments, and discretionary spending that residents of expensive states simply cannot afford.
Kentucky has a state income tax rate of 4.5%. On the median household income of $55,600, you will pay approximately $2,502/year in state income tax ($209/month). This is below the national average — a tax advantage for Kentucky residents.
The average single person in Kentucky spends approximately $370/month on groceries. A family of four can expect to spend $925-$1,110/month. The food cost index of 93 means groceries in Kentucky are 7% below the national average.
Gas prices in Kentucky average $3.05/gallon. For the average commuter driving 15,000 miles/year at 25 MPG, that is roughly $1,830/year in fuel costs.
Kentucky healthcare costs are 12% below the national average (index: 88). The average annual healthcare cost per person in Kentucky is approximately $5,280 including premiums and out-of-pocket expenses. Employer-sponsored health insurance covers the majority of working adults.
Infant daycare in Kentucky averages $750/month ($9,000/year). This is below the national average, making Kentucky more family-friendly from a financial perspective. Many families in Kentucky find that one parent staying home is more cost-effective when two or more children need daycare.
Kentucky is an excellent choice for anyone prioritizing affordability. Your dollar stretches 13% further here than the national average. The trade-off may include fewer big-city amenities in some areas, but cities like Louisville and Lexington offer a good balance of affordability and quality of life.
See all Kentucky financial calculators:
Kentucky (KY) has a cost of living index of 87, meaning it is 13% cheaper than the US average. Housing is the biggest factor with an index of 67. The median rent is $825/month and the median home price is $225,000. Kentucky ranks #6 out of 50 states for affordability (1 = cheapest).
For a single person, a comfortable salary in Kentucky is approximately $72,280/year ($6,023/month). For a family of four, aim for $122,320/year. This covers housing at 30% of income, groceries ($370/mo), transportation, healthcare, and a 15% savings rate. The median household income in Kentucky is $55,600.
The median rent for a one-bedroom apartment in Kentucky is approximately $825/month. A two-bedroom averages $1,114/month. Rent varies significantly by city: Louisville, Lexington, Bowling Green are the most popular metro areas. Housing in Kentucky is affordable compared to the national average.
Kentucky is an excellent choice for affordability. With a cost of living 13% below the national average and median rent of just $825/month, your money goes significantly further here. Top cities include Louisville, Lexington, Bowling Green.
The most affordable areas in Kentucky are typically smaller cities and rural areas away from the major metros. Within Kentucky, costs can vary 20-40% between the most expensive city (Louisville metro) and more affordable areas. Owensboro and Covington tend to offer lower costs while still providing good amenities and job opportunities.
The average monthly grocery bill in Kentucky for a single person is approximately $370 ($925 for a family of four). Kentucky food costs are 7% below the national average. Shopping at Walmart, Aldi, and local discount stores can reduce this by 15-25%.
The average monthly electric bill in Kentucky is approximately $130. Total utilities (electric, gas, water, internet) average $286/month. Kentucky utilities are 3% below the national average. Utility costs are manageable for most households.
Kentucky has a state income tax rate of 4.5%. On the median household income of $55,600, that is approximately $2,502/year in state income tax. This is below the national average — a tax advantage.