New data has revealed that the most expensive state for a family of four to make ends meet – and it’s not California or New York.
In Massachusetts, a family of four must earn a salary of at least $150,578 to meet their basic needs, according to a new study by SmartAssetwhich is largely due to the state’s rising housing and childcare costs.
Hawaii is the second most expensive state for families, followed by Connecticut in third place.
New York comes in fourth, while California is the fifth most expensive state for a family to make ends meet.
The analysis exposes how persistent inflation and rising costs are eroding the purchasing power of households across the country.
In Massachusetts, a family of four must earn a salary of at least $150,578 to meet their basic needs, according to SmartAsset
The study examined cost estimates for housing, food, medical care, transportation and child care in all 50 states.
The cost of these basic services can vary significantly depending on local job and housing markets, city infrastructure and legislation – and even social and cultural influences.
SmartAsset found that while supporting a larger household generally increases overall costs, economies of scale reduce per-child costs when there is more than one child in a family.
The study found that Massachusetts is the most expensive state for two working parents with two children to make ends meet.
Housing in Massachusetts is notoriously unaffordable, amid a dire housing shortage across the state — especially in Boston.
According to a University of Massachusetts survey earlier this month, three-quarters of new homebuyers and 83 percent of new renters in the state said they experienced difficulty looking for a place to live.
Another major reason the state tops the rankings is the rising cost of child care.
According to SmartAsset, child care earns parents an average of $21,500 per child per year.
If one parent stays home to care for the children, families can potentially save a significant amount of money on child care and other expenses, but it also means missing out on valuable income.
The study shows that one parent staying home to care for a child typically saves about $11,000 per child per year.
Covering the basic needs of a family of four in Hawaii requires an average household salary of $147,319, making it the second most expensive state on the list.
Housing is the main factor driving up the cost of living in the state, as strong demand, housing shortages, land use and zoning regulations have driven up prices.
A University of Hawaii report from March found that the average price of a new two-bedroom apartment in Hawaii is $672,000 – which is more than double the American average of $300,000.
Third in the SmartAsset rankings is Connecticut, where a family of four needs a salary of $139,924 to make ends meet.
In addition to housing costs, which are among the highest in the U.S., Connecticut residents also face above-average state and local taxes.
According to WalletHubthe total tax burden – the portion of total income that residents pay in state and local taxes – in Connecticut is just over 10 percent for 2024. This includes property taxes, income taxes and sales taxes.
High taxes are also a major driver of the cost of basic necessities in New York, where a family of four with two working parents needs a salary of $139,504 to get by, according to SmartAsset.
Although the costs of housing, groceries, and transportation are notoriously high in New York City, residents across the state also face a significant tax burden compared to other parts of the country.
According to WalletHub, New York has the highest tax burden, at 12.02 percent in 2024.
Strong demand, housing shortages, and land use and zoning regulations have pushed up real estate prices in Hawaii
The costs of housing, groceries, and transportation are notoriously high in New York City, and residents across the state also face a significant tax burden compared to other parts of the country
California, meanwhile, ranks as the fifth most expensive state in terms of basic expenses for a family of four.
To make ends meet in the Golden State, parents must earn a combined salary of at least $138,357, the study found.
Once again, a lot of attention has been paid to rising house prices in major cities such as Los Angeles, San Francisco and San Diego.
Childcare in the state is also among the most expensive in the country. The average annual cost of sending a toddler to daycare in California is $13,408, according to a report from the charity the Annie E. Casey Foundation.
Although New York and California are both among the most expensive states in the US for families to live in, they are both large states with significant population densities outside of affluent cities, placing them slightly lower in the rankings.
On the other end of the spectrum, Mississippi has the lowest income threshold needed to meet basic needs: $88,895, SmartAsset found.
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