Cost of Living in Arizona

Arizona is well-known for its awe-inspiring desert landscapes and year-round sunny weather. With so much to offer, it’s reasonable to expect that moving to the Grand Canyon State will cost you a pretty penny. But Arizona is often much cheaper to live in than people think. As one of the top-rated wealth management firms in Arizona, we’ve created this detailed guide that will break down the exact cost of living in Arizona.

If you’re looking for general advice about living in Arizona then be sure to check out our guide that answers “Is Arizona a Good Place to Live?” Otherwise, read our deep dive into the cost of living in Arizona.

Average Cost of Living in Arizona: $53,921

In 2023, the average cost of living in Arizona was $53,921 according to the Bureau of Economic Analysis. 

Based on this data alone, Arizona is cheaper than neighboring states like California ($64,835), Colorado ($63,781), and Nevada ($54,054). It’s also cheaper than most of the states on the East Coast, such as New York ($63,775), New Jersey ($63,814), or Maine ($60,250). If you’re moving to Arizona from the Northeast then you’ll likely be surprised by the cheaper cost of living in Arizona.

For snowbirds, Arizona is also cheaper than fellow retiree hotspot, Florida ($60,204). If you’re thinking about retiring to Florida for its warm weather then you’ll definitely want to check out Arizona as well.

With that said, Arizona isn’t the absolute cheapest place to live. If you’re looking for the lowest cost of living in the Southwest then you’re better off moving to New Mexico ($46,076) or Utah ($51,027).

Here’s what the average Arizonan’s expenditures look like each year, according to the BEA’s data:

1. Food: $326 monthly ($3,923 annually)
2. Gas: $112 monthly ($1,346 annually)
3. Healthcare: $662 monthly ($7,943 annually)
4. Housing & Utilities: $913 monthly ($10,961 annually)

These are averages from data collected from the Bureau of Economic Analysis. To get a better idea of the cost of living in Arizona, it’s best to speak with an Arizona-based financial planner. The team at ARQ Wealth will be able to assist you with everything from specialized investment management to general financial guidance.

Housing Cost in Arizona

Zillow’s data shows that the median home value in Arizona was $419,667 as of October 2024. For renters, you can expect to pay a median rent of $1,600 (slightly higher than the national median of $1,400), according to the Census Bureau. 

However, Arizona is a massive state, and housing costs vary widely depending on where you buy within the state. Here are Zillow’s estimates for the average home prices in each of the following cities:

• Sedona: $941,558
• Scottsdale: $824,119
• Flagstaff: $654,777
• Lake Havasu City: $472,118
• Phoenix: $417,063
• Tucson: $331,236
• Yuma: $295,663

In other words, purchasing a large home in Sedona is going to cost you much more than buying a smaller home in a city like Tucson or Yuma. In our eyes, this range of pricing is actually another perk of living in Arizona. 

Arizona is the sixth-largest state by land mass, which means that there are plenty of different regions and cities to choose from. You can choose to live in a major metro if you don’t mind paying a higher price. Or, you can pick a cheaper region to minimize your costs.

Additionally, you won’t run into too much trouble if you’re planning to purchase land and build a home because there’s so much room to expand. This isn’t the case for more crowded parts of the country like New York or Southern California.

Average Utility Costs in Arizona

The average utility bill in Arizona is around $443, according to data from Rent Cafe. Here’s how those costs break down: 

1. Electricity: $159
2. Gas: $63
3. Water: $50
4. Sewage: $42
5. Cable: $65
6. Internet: $65
7. Total Average Utility Bill: $443

Again, these are averages based on a large dataset. The actual amount that you end up paying will vary based on a number of factors.

You can also expect utility costs in Arizona to fluctuate fairly drastically throughout the year. For example, Arizona residents can save lots of cash in the winter because they don’t need to run their heaters 24/7. In fact, Arizona’s per capita energy consumption is less than almost four-fifths of states per the Energy Information Administration, thanks in large part to the state’s temperate climate.

But, the opposite is true during the summer when Arizonans need to run their air conditioning around the clock to compete with the intense heat.

Transportation Costs in Arizona

The Bureau of Economic Analysis estimates that the average Arizonan spends $2,195 annually on transportation, which comes out to roughly $183 each month. Additionally, data from AAA shows that gas prices in Arizona are on par with the national average. As of October 2024, the average price for a gallon of gas in Arizona was $3.34, slightly higher than the nation’s average of $3.20.

However, keep in mind that you’ll almost certainly need your own car if you move to Arizona. The state is massive, and driving between major cities will easily take you a few hours. If you’re driving through the entire state from North to South then you can expect it to take you roughly eight hours (not including stops or traffic). Many of Arizona’s natural wonders are also out in the desert so they may take quite a bit of driving to get to.

All of this is to say that while gas in Arizona is not necessarily super expensive, you might end up spending more on gas than you’re used to because of all the driving you’ll be doing. This means that even a small uptick in gas prices can be enough to impact your monthly budget. 

Public transportation within the state is also lacking, which means you don’t have many other options when it comes to getting around the state.

Taxes in Arizona

Taxes play a major role in determining your cost of living in Arizona. As the saying goes, it’s not about how much you make—it’s about how much you keep. Fortunately, Arizona is a fairly tax-friendly state, according to the experts at AARP. Here’s a quick snapshot of what you need to know about Arizona’s tax environment:

1. Income tax: 2.5% flat tax
2. Social Security taxes: 0% state tax. But Arizona residents pay federal taxes on SS. 
3. Estate taxes: None
4. Inheritance tax: None 
5. Sales tax: 5.6%
6. Property tax: Arizona charges an average of 0.63% of a home’s assessed value, which means it has relatively low property taxes compared to other states.

Arizona is becoming increasingly popular with retirees due to its lack of Social Security taxes, estate taxes, and inheritance taxes. If you live in a high-tax state, moving to Arizona is a quick way to immediately boost your take-home pay, even if your paycheck stays the same.

Miscellaneous Costs of Living in Arizona

Another bright side of living in Arizona is that you can have lots of fun without breaking the bank. Arizona is home to lots of local, state, and national parks. For a modest entry fee, you can enjoy dozens of free activities such as biking, hiking, camping, fishing, swimming, or stargazing.

According to the Bureau of Economic Analysis, Arizona residents can expect to spend $158 per month on recreational goods and $182 per month on recreational services. But, again, this cost will fluctuate depending on what you like to do for fun.

How Much Do I Need to Live Comfortably in Arizona?

Everyone has a different idea of what it means to live comfortably. But, for the sake of simplicity, we’ll assume that “living comfortably” means you’re earning enough to meet your basic needs. 

The amount you need to live comfortably will depend on your living situation (single person, married, kids, etc). Using MIT’s Living Wage Calculator, here’s how much you need to earn to live comfortably in Arizona: 

• 1 Adult, 0 Children: $23.40 per hour
• 1 Adult, 1 Child: $40.48 per hour
• 1 Adult, 2 Children: $50.42 per hour
• 1 Adult, 3 Children: $66.27
• 2 Adults, 0 Children: $32.18 per hour (combined wage)
• 2 Adults, 1 Child: $38.40 per hour (combined wage)
• 2 Adults, 2 Children: $43.13 per hour (combined wage)
• 2 Adults, 3 Children: $47.14 (combined wage)

Again, this amount will vary drastically depending on your lifestyle as well as where you choose to live within the state. To get a better idea of how much money you need to live or retire in Arizona, be sure to contact the team at ARQ Wealth Advisors. We are a fee-only firm that specializes in providing retirement planning, investment planning, tax planning, asset management, and comprehensive wealth planning services. 

Frequently Asked Questions

Here are some FAQs many people have about the cost of living in Arizona: