Cost of living in Kentucky: Affordable housing market. Lower than average utility costs. Reasonable grocery expenses. Competitive healthcare pricing. Moderate transportation costs. Variety in property taxes. Reasonable entertainment prices. Lower minimum wage. State income tax. Variability in city expenses.
Affordable housing market
Kentucky's affordable housing market is facing significant challenges, with a projected housing gap of 287,000 units by 2029, particularly impacting low-income households and rural areas. Despite the state's overall affordable home prices and rents compared to national averages, this widening gap poses a significant concern for the future. A New Analysis highlights the urgency of addressing these issues to prevent further strain on the state's most vulnerable populations.
Lower than average utility costs
In Kentucky, the average residential electricity rate is 12.74 cents per kilowatt hour, which is 22.11% below the US average. This results in the average monthly electricity bill being $137.29, making utility costs in the state lower than the national average. For more information on energy rates and utilities in Kentucky, visit Find Energy.
Reasonable grocery expenses
In Kentucky, the average family spends $254.57 on groceries per week, which is below the national average of $270.21, making Kentucky one of the more affordable states for grocery shopping. Groceries in Kentucky cost about 11% less than the national average, supported by the state's rich Agricultural Industry and competitive prices in various regions.
Competitive healthcare pricing
Healthcare costs in Kentucky are relatively competitive, with average monthly health insurance premiums at $431 for individuals and $1,437 for families, which are slightly lower than national averages. Despite lower insurance premiums, overall healthcare costs such as doctor visits, emergency care, and hospital stays are higher than the national average, influenced by factors like high rates of chronic illness and less provider competition. For more detailed insights into Kentucky's healthcare expenses, you can visit the Unbiased website to explore comprehensive information.
Moderate transportation costs
In Kentucky, moderate transportation costs are evident, with a single adult expecting to pay around $10,000 annually on transport, and a typical family of four facing costs over $17,500 per year. These expenses include gas prices and vehicle maintenance that are generally near the national average. For a detailed breakdown of these expenses, you can visit the Cost of Living in Kentucky report on Unbiased.
Variety in property taxes
In Kentucky, property taxes vary significantly depending on the county and city, with the average effective property tax rate being around 0.80% for the 2023-2024 tax period. The tax rate is determined by local governments and is calculated based on the assessed value of the property, which can differ across different jurisdictions. For more detailed information on how these rates are calculated, you can visit the PayRent website. Understanding these variations is crucial for property owners to accurately budget and manage their expenses.
Reasonable entertainment prices
Kentucky offers numerous free and budget-friendly entertainment options, such as watching early morning workouts at Keeneland Race Course, taking free tours at Buffalo Trace Distillery, and exploring various parks and museums, making entertainment reasonably priced and accessible. For those visiting Louisville, there is a diverse range of budget-friendly activities to enjoy, including free museum visits, bike rentals at Waterfront Park, and admission to the Louisville Zoo for less than $10. These options underline the state's affordable entertainment choices. For more detailed information on affordable activities in Louisville, you can explore the 10 Things For Under $10 In Louisville blog, which highlights the endless affordable entertainment opportunities available.
Lower minimum wage
The Minimum Wage in Kentucky stands at $7.25 per hour, aligning with the federal minimum wage standard. Presently, there are no official plans to raise it, despite ongoing discussions among some lawmakers advocating for a potential increase to $15 per hour. This push aims to address the challenge of escalating living costs and provide a more livable wage for workers across the state. For more detailed information and insights, you can visit the Guide to Kentucky Minimum Wage.
State income tax
Kentucky's individual income tax rate will be lowered to 3.5% in 2026, down from 4%, after the state met the budget triggers set by House Bill 8 passed in 2022, which aims to incrementally lower the income tax rate until it is potentially eliminated. For more details on this legislative development and its implications, you can visit the LPM News website.
Variability in city expenses
The cost of living in Kentucky varies significantly across different cities, with some cities like Ashland and Covington being 12% lower than the national average, while others like Madisonville are 4% higher. For instance, Lexington's cost of living is 8% lower than the national average, with housing 26% cheaper, but utilities 4% higher. To explore more detailed insights, you can visit the RentCafe Cost of Living Calculator, which provides comprehensive information on how these variations can impact day-to-day expenses across Kentucky.