Southern U.S. Region Is Most Affordable for Digital Nomads

Southern U.S. Region Is Most Affordable for Digital Nomads

Published: March 27, 2024
  • Mississippi, Oklahoma and Arkansas are the best U.S. states to thrive economically, with more than 95 points out of 100 for rent and food costs.
  • Hawaii, New York and California present challenges for digital nomads due to high rent and taxes with rankings as low as 50.
  • Texas, Tennessee and South Dakota don't impose income tax, making them financially appealing for digital nomads.

Mississippi, Oklahoma and Arkansas lead the way as the top three U.S. states where the cost of living aligns with the financial dynamics of remote work for the digital workforce, according to a new study by B2B marketplace DesignRush.

To create the index, DesignRush assessed critical metrics that impact the daily lives of the modern mobile workforce, such as affordable housing, food prices, tax rates and healthcare costs, to pinpoint the states where digital nomads can thrive.

The findings are particularly relevant, as the U.S. sees a significant shift in its workforce dynamics.

17.3 million Americans, representing 11% of the workforce, currently identify as digital nomads, so there's a growing need to identify the states that best serve this expanding group.

"Our study supports the modern working class in their search for a suitable work-life balance while helping policymakers and business leaders grasp the latest employee preferences,"DesignRush General Manager Gianluca Ferrugia said. 

U.S. Map of Most Affordable States
Most Affordable U.S. States for Digital Nomads | Source: DesignRush

Top 10 U.S. States for Remote Workers

1. Mississippi

Securing the top position with an outstanding score of 91.30, Mississippi sets itself apart as the leader in affordability and livability for digital nomads. It scores more than 90 points in almost all categories, with only two exceptions: high internet (73.1) and healthcare costs (86.5). Beyond the financial benefits, Mississippi offers a welcoming environment, characterized by the warmth and friendliness of southern hospitality.

2. Oklahoma

Claiming the second position, Oklahoma shines as a prime destination for digital nomads, thanks to its unbeatable combination of low food (100) and housing costs (95.3), one of the lowest in the U.S. The Sooner State's appeal extends beyond its cost-effectiveness, as it is celebrated for its diverse and captivating landscape, ranging from rolling plains to forested hills, offering a scenic backdrop for both work and leisure.

3. Arkansas

The Natural State earns its third-place ranking with a score of 88.63. It sets itself apart through the attractively low costs of essential living needs, such as housing (98.5) and food (98.6). Arkansas’ small towns and vibrant cities offer a variety of cultural and recreational activities without the hustle and bustle of larger urban centers.

4. Texas

The Lone Star State claims the fourth position on the list with an impressive score of 88.62, appealing to digital nomads through its unique blend of vast landscapes, thriving tech hubs and favorable economic conditions. Texas stands out for its zero-income-tax policy, which significantly enhances the financial freedom of remote workers and entrepreneurs alike. Competitive living costs in areas like transportation and healthcare, coupled with scoring more than 93 across the board with the exception of rent cost, make Texas an increasingly attractive destination for those who wish to maximize their earnings while enjoying access to high-quality services.

5. Tennessee

Tennessee secures the fifth spot with a notable score of 88.30, showcasing its attraction through an irresistible mix of affordability, cultural richness and southern hospitality. This state stands out not only for its financial benefits, such as no income tax, but also for its commendable healthcare, food and transportation affordability, getiing scores of over 90 points in these categories.

6. North Dakota

North Dakota earns the sixth place ranking with a solid score of 88.22, thanks to its meager housing costs. According to real estate marketplace Zillow, it has the lowest rent and food costs in the country. North Dakota's appeal lies in the vast landscapess and peaceful environment it offers, providing the perfect backdrop for focused work. Despite its serene setting, North Dakota does not compromise on connectivity and accessibility, ensuring that remote workers can easily stay in touch with clients and colleagues around the globe.

7. South Dakota

The Mount Rushmore State secures the seventh position with a score of 88.19, reflecting its competitive edge in offering no taxes and cost-effective rent options (98.4). The combination of affordability, natural beauty and a friendly atmosphere makes South Dakota a compelling choice for digital nomads who prioritize a balanced and enriching lifestyle amidst some of America’s most breathtaking scenery.

8. Ohio

This Midwestern state gets the eighth spot with a score of 87.58, affirming its reputation as a state that offers the best of both worlds: the vibrancy of urban life without the hefty price tag often associated with city living. The state's score is indicative of its low food (92.1) and average taxes (99.2). Ohio is home to several dynamic cities like Columbus, Cleveland and Cincinnati, each offering unique cultural experiences, bustling food scenes and diverse entertainment options.

9. Missouri

The Show-Me State claims the ninth position with a score of 87.40, reflecting its status as a place that combines affordability with a high quality of life. This ranking is underscored by Missouri's notably low housing costs, scoring 94 points, and overall reasonable living expenses. The state also offers the quintessential Midwestern charm, offering a warm and welcoming environment that's steeped in rich cultural history and vibrant community life.

10. Alabama

The Cotton State rounds up the top 10 with a robust score of 87.07, anchored by its low tax rates and modest living costs. Its food cost is one of the three lowest at 97.8 points, establishing it as an attractive destination for digital nomads in pursuit of financial efficiency without sacrificing quality of life. Its economic advantages are complemented by a warm climate that beckons outdoor enthusiasts and those who prefer milder winters.

Methodology

Our scoring methodology involved collecting raw data encompassing a range of factors, including tax rates, legal obligations, healthcare services, internet availability, cost and living affordability.

The data was then standardized by calculating Z-scores for each metric and normalizing these scores to a 50-100 scale for comparability. Following standardization, weights are assigned to each metric reflecting its importance, and a weighted average for each location is calculated by multiplying each normalized score by its respective weight.

The locations were ranked based on their final scores, with higher scores indicating a more favorable assessment based on the combined factors.

Sources: Turbotax, Zillow, RentCafe, BroadbandSearch and C2ER.

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