When you’re moving to a state that’s known for selling the most expensive McDonald’s Quarter Pounders with Cheese, it’s only natural that you’d wonder about the overall cost of living in Alaska. The 49th state has long occupied a top slot in the most expensive states to live in. It currently ranks #7, just behind Hawaii, Maryland and Massachusetts.
However, we have some good news: Seattle, San Francisco, Manhattan and Waterloo-Cedar Falls, Iowa, have dethroned Alaska in the race for the most expensive Quarter Pounder with Cheese. Plus,
with the 2018 Permanent Fund Dividend clocking in at $1,600 for Alaska residents, it might be the perfect time to move to Alaska.
That being said, everyone’s finances are different, so we’ll take you on a tour of six common categories of expenses so you can judge whether it’s time for you to make the Frontier State your home.
Finding Your Home: The Cost of Housing in Alaska
On average, the cost of living in Fairbanks is about 33% higher than the national average. That being said, it’s only four percentage points more expensive than living in Chicago and it’s still 78% cheaper than living in New York City.
As the largest monthly expense for most Americans, housing costs contribute significantly to the overall cost of living in Alaska.
If you’re looking to buy, the median value houses in Alaska is $241,800, which is 37% higher than the national median of $176,700. That being said, the average listing price in Fairbanks is right around $199,000, while it hovers around $345,000 in Anchorage. In other words, housing prices vary, so you can likely find something within your budget, depending on where in Alaska you decide to live.
If you prefer to rent, know that prices increased 2% overall in 2018. That being said, rental prices will depend on where you decide to rent and what kind of apartment you choose. The Department of Labor and Workforce Development estimates average apartment average rent in Anchorage at $1,111 and $1,007 in Fairbanks. Keep in mind: The national average sits at $983.
With housing prices clocking in higher than the national average, you might expect that it will cost a fortune to heat and light your home, especially during those cold and dark Alaskan winters. However, we think you’ll be pleasantly surprised by this next section.
Heating and Lighting Your Home: The Cost of Utilities in Alaska
The U.S. Energy Information Administration reported that the average monthly electric bill for Alaska residents currently sits at $127.83/month. Although that’s higher than the national average of $111.67, it’s still less than you’d see in South Carolina, Alabama or Connecticut and it’s right on par with Florida, Georgia and Virginia.
In other words, electricity is one of the few costs of living factors that puts Alaska on par with many other states.
That being said, it can still get pricey to keep your house warm. So what do most Alaskans do? They get creative! Many homes in Alaska have a few sources for heat in the winter: electricity, fuel oil, natural gas (where available) and wood. Most people switch up their heating methods depending on current cost and outside temperatures.
In general, those who are fortunate enough to have access to natural gas will generally see lower costs to keep their homes warm. Fuel oil is a pricier option, especially if you live far from one of Alaska’s city centers, where the cost per gallon can double or triple.
As you plan your move, make sure to include a cushion for winter utilities. They’ll vary greatly depending on the size of your home and its insulation against the elements.
Once you lock down a warm place to live, your next order of business will be securing the next essential: food.
Fueling Your Adventures: The Cost of Groceries in Alaska
If you don’t plan on subsisting on Quarter Pounders with Cheese, you’ll find yourself shopping for food sooner than later. Since everything has to be shipped in, you’ll find that groceries are more expensive in Alaska than the lower 48.
To give you a comparison, we’ve put together a chart of 4 essentials comparing Anchorage prices with two other American cities:
1 quart of milk
12 eggs, large
2L bottle of Coke
4 rolls of toilet paper
As with housing prices, the cost of groceries can vary significantly, based on where you make your home. The University of Alaska Fairbanks did a study highlighting these differences. In Anchorage, prices were 11% less than the state average. In Nome, they were 31% higher.
Once you’ve fueled your body for its Alaskan adventures, let’s take a look at the cost of getting you around.
Filling the Vehicles That Power Your Adventures: The Cost of Gas in Alaska
Since the price of gas fluctuates frequently if you want to get an up-to-date gauge on the price of gas in Alaska, head over to AlaskaGasPrices.com.
As of the publishing of this article, gas prices in Alaska are about $0.10 above the national average. Furthermore, prices are on par with what’s available in Portland, OR, although it’s well above Houston’s famously low gas prices, which now sit as low as $2.19/gallon.
Now that you know the price of gas in Alaska won’t break the bank, we’ve got another boost for your budget.
Dealing with Uncle Sam and His Local Counterparts: The Cost of Taxes in Alaska
We have some good news in this category: You won’t pay state income tax in Alaska. Depending on where you’re moving from, that could mean you get to keep up to 13% more of your paycheck.
Although some states without income taxes charge a hefty sales tax (we’re looking at you, Tennessee), you won’t find a state sales tax in Alaska. That being said, some cities do charge their own sales taxes.
Add these cost savings to the annual Permanent Fund Dividend payout for Alaska residents (which was $1,600 in 2018), and you might find the help you need to cover some of the cost-of-living increases you’ll encounter when moving to Alaska.
Bringing Home the Bacon: Average Salaries in Alaska
Finally, before we wrap up, let’s turn to the other side of the ledger: what kind of income you can expect to bring in.
Thanks to the Bureau of Labor Statistics, we have actual data comparing wages in Alaska to the Mainland. The study revealed that wages in Alaska were, on average, 24% higher than comparable Mainland averages. Additionally, all the individual occupations they investigated paid more in Alaska than they did in the lower 48.
That being said, some of the work you’ll find in Alaska is seasonal, while other industries are shrinking. Oil and gas as well as tourism, however, continue to thrive. Check out our article on the top industries in Alaska to spark some ideas on the kinds of jobs you can find in Alaska to support your new lifestyle.
Changing Landscapes, Shifting Budgets
Moving to Alaska will ask you to make some pretty big changes to your lifestyle—and your budget. However, it will also give you a whole new set of adventures in return, which may be exactly what you’re looking for. Plus, armed with this cost-of-living information, you’ll be able to craft a budget that allows you to make your life in Alaska exactly what you want it to be.
Need some help budgeting for your move? We’d be happy to help. Just reach out to us, and one of our Certified Moving Consultants will arrange for a survey so we can get you a guaranteed quote for your move.