The Bluegrass state may be known for its scenic landscapes, welcoming communities, and a slower pace of life. But what sets it apart from other states is how far your money can go.
Of course, costs can vary depending on where you live. Still, most people find that Kentucky offers substantial value for the lifestyle it provides.
Key Takeaways
- Kentucky’s living costs are well below the national average.
- Housing is one of the most affordable in the country, 47% lower that the national average.
- Utilities are resonably priced at around $469/month, groceries are nearly 39% cheaper than the national average.
- Healthcare costs remain slightly below national norms.
- Transportation costs depend on how much and where you drive and can range from $5,477 to $15,530/year.
- Taxes are relatively low, flat income tax of 4%, 6% sales tax, and 0.8% property tax rate (vs. 1.1% nationally).
Average Cost of Living in Kentucky
Let’s explore what it costs to live in Kentucky in 2025.
The average person in Kentucky spends around $43,794 annually. This makes the state notably more affordable than the U.S. average, thanks to its affordable housing, groceries, and property taxes.
| Expense Category | Average Annual Cost in Kentucky | National Average Annual Cost |
| Housing | $16,875 | $35,600 |
| Utilities | $5,628 | $5,328 |
| Electricity | $1,560 | $1,644 |
| Gas | $1,058 | $780 |
| Water | $324 | $468 |
| Internet | $864 | $936 |
| Phone | $1,992 | $1,848 |
| Streaming services | $576 | $576 |
| Food and grocery | $3,055 | $5,021 |
| Healthcare (family) | $23,938 | $25,500 |
| Transportation | $5,477 | $13,174 |
Housing Costs
If you’re looking to buy a home in Kentucky, you’re in luck. The median home value in the state is around $211,465 as of January 2025. That’s a 6.8% increase from last year, but far below the national median of $446,300.
Utilities
Utility costs in Kentucky are close to what most Americans pay. The average utility bill in Kentucky runs about $469 per month, right on par with national rates.
The average electric bill in Kentucky comes to around $130 per month, while the average gas bill in Kentucky is steeper at about $88 per month. Water remains affordable at just $27 per month.
Expect to pay roughly $72 per month for the internet, and about $166 for phone bills. If you’re subscribed to streaming services, the average cost is $48 per month, which aligns with what folks pay nationwide.
Food and Grocery Costs
Grocery shopping in Kentucky won’t stretch your budget too far. A person spends about $254.6 per month on food, around 39% lower than the national average of $418.4.
Healthcare Expenses
The average annual premium for family coverage is around $23,938, below the $25,500 national average.
However, out-of-pocket costs vary based on insurance plans, health conditions, and provider networks. So, make sure to keep this in mind when managing your finances.
Transportation Costs
People living in Kentucky typically spend about $5,477 to $15,530 annually on transportation. However, this depends on your commute, whether you own a car or take public transportation, and fuel prices. Unexpected vehicle repairs or fuel hikes might prompt some to seek Kentucky short-term loans to stay on track financially.
Taxes
Kentucky uses a flat income tax rate of 4%, meaning all residents pay the same rate regardless of income level. To estimate your take-home pay after taxes and deductions, use a Kentucky paycheck calculator tailored to the state’s flat tax system.
The sales tax rate in Kentucky is 6% statewide. Unlike many states, Kentucky doesn’t allow local governments to pay additional sales taxes, so the rate stays consistent no matter where you shop.
As for property taxes, the average effective property tax rate is about 0.8%, which is lower than the national average of 1.1%
What Are the Cheapest Cities to Live in Kentucky?
How much does it cost to live in Kentucky in smaller towns? Check these out:
| City | Median Home Value | Cost of Living Compared to the National Average |
| Middlesbrough | $110,645 | 32.8% lower |
| Williamsburg | $126,928 | 29.2% lower |
| Olive Hill | $131,756 | 27% lower |
| Central City | $128,213 | 29.7% lower |
| Princeton | $131,545 | 28% lower |
| Maysville | $145,430 | 25.3% lower |
| Monticello | $150,323 | 29.2% lower |
| Shively | $180,544 | 10.2% lower |
| Owensboro | $191,322 | 18.3% lower |
| Madisonville | $158,014 | 28.1% lower |
Kentucky is a budget-friendly place to live in 2025. It has affordable housing, low property taxes, and grocery prices that won’t break the bank. Just be mindful of transportation and healthcare costs, as they vary based on where you live and your lifestyle.
FAQ
What Is the Most Expensive City in Kentucky?
Madisonville is the most expensive city in the state, where living costs run about 10% higher than the state average and sit just above the national average by 1%.
Is Kentucky Expensive to Live In?
Not really. Kentucky is one of the most affordable states because cost of living is 11.4% lower in Kentucky than the U.S. average.
How Much Money Do You Need to Live Comfortably in Kentucky?
To live comfortably, a single person would need to make money about $43,794 annually.
Sources
- Zillow. “Kentucky Home Values.” Zillow. Accessed March 25, 2025.
- U.S. Census Bureau. “New Residential Sales Data.” U.S. Census Bureau. Accessed March 25, 2025.
- RubyHome. “Average Utility Bill by State.” RubyHome. Accessed March 25, 2025.
- HomeGuide. “Average Utility Bill Cost Guide.” HomeGuide. Accessed March 25, 2025.
- This Old House. “Utility Bills 101.” This Old House. Accessed March 25, 2025.
- World Population Review. “Grocery Prices by State.” World Population Review. Accessed March 25, 2025.
- Move.org. “The Average Cost of Food in the U.S.” Move.org. Accessed March 25, 2025.
- Bureau of Transportation Statistics. “Transportation Cost Burden Falls Significantly in 2025.” BTS. Accessed March 25, 2025.
- Kentucky Department of Revenue. “Property Tax Rates.” Kentucky Department of Revenue. Accessed March 25, 2025.
- Tax Foundation. “Property Taxes by State and County.” Tax Foundation. Accessed March 25, 2025.