Did you know Alaska was once named the most expensive state to purchase a Quarter Pounder with Cheese? And for many years The Frontier State occupied a top slot as the most expensive state to live. But in USA Today‘s estimates for 2022, Alaska ranks as the fourth-most expensive state, just behind New York, Washington DC, and Hawaii.
So if the price of a burger is an indicator of the economy, we have some good news: Seattle, San Francisco, and Manhattan have since dethroned Alaska in the race for the most expensive Quarter Pounder with Cheese.
Plus, since Alaska residents enjoy a yearly Permanent Fund Dividend that can help offset the cost of living, it might be the perfect time to move to Alaska. That being said, everyone’s finances are different. We’ll take you on a tour of several common categories of expenses so you can judge for yourself whether it’s time for you to make the Frontier State your home.
Looking at the Whole Picture:
The Overall Cost of Living in Alaska
To give you a sense of the overarching cost of living in Alaska, let’s start with some broad numbers.
Payscale.com estimates that the cost of living in Fairbanks is about 33% higher than the national average. That being said, the cost of living in Portland, Oregon is 29% higher than the national average. (Pretty similar!) Plus, the cost of living in Los Angeles is 43% higher than the national average, so it’s about 9.3% cheaper to live in Fairbanks.ii
The Cost of Living in Fairbanks Is…
In comparison, living Anchorage is 28% higher than the national average, according to Payscale.com. That puts it nearly on par with living in Portland, Oregon and 12% cheaper than living in Los Angeles.iii
The Cost of Living in Anchorage Is…
That said, if you’re currently living in an area where the cost of living is relatively low, moving to Alaska may be a shock to your wallet. However, if your current home is already a bit expensive—such as an urban area of the U.S.—you might find the prices in Alaska fairly comparable. Let’s break it down a bit more.
Finding Your Home:
The Cost of Housing in Alaska
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 typical home value of homes in Alaska is $310,373 according to Zillow, which is actually 1% lower than the national typical home value of $312,728.iv However, there can be significant deviation, depending on where in Alaska you decide to live:
Typical Home Values, According to Zillow v
In other words, housing prices vary around the state. If you’re flexible in terms of your destination, you can likely find something within your budget.
If you prefer to rent, know that prices increased 2% overall in between 2020 and 2021.vi Rental prices, like home purchase prices, will depend on where you decide to rent. They’ll also vary based on what kind of apartment you choose. The Department of Labor and Workforce Development estimates the average overall apartment average rent in Anchorage at $1,172 and $1,246 in Fairbanks.vii Keep in mind: The national average for all size units sits at $1,124.viii
Median Rents in Alaska ix
With housing prices 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 is $124.66/month. Although that’s higher than the national average of $117.46/month, it’s still less than you’d see in South Carolina, or Connecticut. It’s also right on par with Florida or and New Hampshire.x
Average Monthly Electric Bills xi
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 find it cheaper 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. In fact, the Missouri Economic Research and Information Center ranks Alaska as the state with the second-most expensive groceries in the nation. (Hawaii takes the #1 spot!)xii
To give you some sense of the prices you’ll see, we’ve put together a chart of four essentials comparing Anchorage prices with two other American cities:
Walmart Grocery Price Comparison xiii
As with housing prices, the cost of groceries can vary significantly, based on where you make your home. Data from the Cooperative Extension Service at the University of Alaska Fairbanks highlights these differences. In Anchorage, groceries for a family of four with two children, ages 6 and 11, cost $211. That’s $5 more than Fairbanks, $63 less than Sitka, and $185 less than Bethel..xiv
Weekly Cost for Groceries for a Family of Four xv
Filling a Vehicle to Power Your Adventure:
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 $0.30 above the national average. Furthermore, prices are on par with what’s available in Seattle, WA, although it’s well above Houston’s famously low gas prices, which were $1 cheaper per gallon when we last checked. Now that you know the price of gas in Alaska won’t break the bank, we’ve got another boost for your budget.
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 $0.30 above the national average.
Furthermore, prices are on par with what’s available in Seattle, WA, although it’s well above Houston’s famously low gas prices, which were $1 cheaper per gallon when we last checked. 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:
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 municipalities do charge their own sales taxes.
Overall, though, your tax burden in Alaska will be quite light. In fact, WalletHub ranked Alaska as the state with the lowest overall tax burden, when taking into account property tax, individual income tax, and sales/excise tax.xvi Add these tax savings to the annual Permanent Fund Dividend payout for Alaska residents (which was $1,114 in 2021), 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
Next, 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 data comparing wages in Alaska to the Mainland. The agency’s 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.xvii
Additionally, more recent data from ZipRecruiter shows Alaska has the fifth-highest average annual salary in the nation:
States with the Highest Average Salaries
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.
Staying Healthy to Enjoy Your Lifestyle:
Cost of Healthcare in Alaska
The final aspect you’ll want to consider when it comes to the cost of living in Alaska is the price of healthcare. After all, if you want to enjoy the Last Frontier to the fullest, you’ll need to stay healthy enough to experience it.
Data from the Kaiser Foundation and the Centers for Medicare & Medicaid Services reveals that Alaskans spend more per capita on health expenses than any other state—more than $11,000. While Alaska’s health care expenses were on par with the rest of the country in 1991, since then, the state has experienced the highest annual percentage growth of any state.xviii
Many Alaskans are shielded from some of these direct costs because their employers pay their premiums.
- If you’re planning on paying for your own insurance once you move to Alaska, make sure you research premium costs so you can budget accurately.
- If you’re planning to get a job in Alaska, aim for one with benefits, which will significantly reduce your out-of-pocket costs.
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.
i https://www.payscale.com/cost-of-living-calculator/Alaska-Fairbanks; https://www.payscale.com/cost-of-living-calculator/California-Los-Angeles; https://www.payscale.com/cost-of-living-calculator/Oregon-Portland
ii https://www.payscale.com/cost-of-living-calculator/Alaska-Anchorage; https://www.payscale.com/cost-of-living-calculator/California-Los-Angeles; https://www.payscale.com/cost-of-living-calculator/Oregon-Portland
iii https://www.zillow.com/ak/home-values/; https://www.zillow.com/home-values/
iv https://www.zillow.com/anchorage-ak/home-values/; https://www.zillow.com/fairbanks-ak/home-values/; https://www.zillow.com/juneau-ak/home-values/
xii Source: Walmart.com prices, accessed 11/30/2021
xvii https://akcommonground.org/high-health-care-costs-in-alaska-facts-causes-consequences-and-remedies/; https://www.adn.com/opinions/2020/07/12/tackling-alaskas-high-health-care-costs/; https://alaskapolicyforum.org/2020/06/report-health-care-costs-alaska/
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