Cost of Living in Texas

Thinking about making the move to the Lone Star State? You're not alone. From Austin to Dalls, Texas continues to attract thousands of new residents each year, and one of the biggest draws is its relatively affordable cost of living. With wide-open spaces, no state income tax, and a diverse economy, Texas offers an attractive lifestyle without breaking the bank.

Whether you're considering a move from a high-cost state or just curious about what it takes to live comfortably in Texas, this comprehensive guide will break down all the essential expenses you need to know about.

Key Takeaways

• Texas’s cost-of-living index is 93 (about 7% below the U.S. average), translating to thousands in annual savings compared to many other states.
• Housing costs take up 25–35% of most budgets, with rural areas offering more affordable options than cities like Austin or Dallas.
• Deregulated electricity markets create competitive pricing, but summer air conditioning can significantly raise monthly bills.
• Texas’s lack of state income tax is a major financial advantage, though higher property taxes offset some of the benefit.
• Cities like San Antonio, El Paso, and Amarillo offer more budget-friendly living, while Austin and Dallas rank among the priciest.

What's the Average Cost of Living in Texas?

The average cost of living in Texas is $1,962.11 per month in 2025, though this varies significantly depending on your location within the state. Urban areas like Austin and Dallas will have higher costs, while rural areas and smaller cities offer more budget-friendly options.

As of 2024, Texas has a cost-of-living index of 93, indicating that living expenses are approximately 7% below the U.S. average. This makes Texas an attractive option for families and individuals seeking to stretch their dollars further. Understanding the overall picture and specific expense categories will help you plan your budget effectively.

Here's what contributes to this monthly average:

• Housing typically represents the largest expense, accounting for 25-35% of most budgets
• Transportation costs vary based on whether you live in a walkable city or need a vehicle for daily commuting
• Food and grocery expenses are generally reasonable compared to national averages
• Healthcare costs are competitive with national standards

The 7% savings compared to the national average means that for every $1,000 you might spend elsewhere, you'd spend approximately $930 in Texas. Over a year, this can translate to thousands of dollars in savings.

Average Monthly Living Expenses in Texas

Utility Costs in Texas

Texas has a unique energy market with deregulated electricity, giving consumers the power to choose their energy provider. This competition often leads to competitive rates, but costs can vary significantly based on:

Electricity Costs

• Average residential rate ranges from $0.08 to $0.15 per kWh
• Summer months see higher usage due to air conditioning demands
• Choosing the right provider and plan can save hundreds annually

Other Utilities

• Natural gas: $30-60 per month for average homes
• Water and sewer: $40-80 monthly, depending on city and usage
• Phone and Internet: $50-100 for high-speed connections
• Trash collection: Often included in city services or $15-30 monthly

Related: 20 Proven Tricks to Lower Your Monthly Phone Bill

The hot Texas climate means higher cooling costs in summer, but mild winters keep heating expenses low. Many residents see their highest utility bills from June through September when air conditioning runs continuously.

Suggested: Best temperature to set your heat and save money

Groceries and Food

Texas offers reasonable food costs that align closely with national averages, with some categories even running below average due to the state's agricultural production.

Grocery Shopping

• Monthly grocery budget for a family of four: $400-600
• Single person monthly groceries: $150-250
• Texas produces significant beef, poultry, and produce, often leading to competitive local prices

Recommended: 25 ways to save money on groceries

Dining Out

• Fast-casual meals: $8-12 per person
• Mid-range restaurant dinner: $15-25 per person
• Fine dining: $40-80+ per person
• Food trucks and local BBQ joints offer excellent value

Texas's food scene is legendary, from authentic Tex-Mex to world-class barbecue. The state's agricultural diversity means fresh produce and locally-sourced ingredients are often more affordable than in other regions.

Transportation

Transportation costs in Texas vary dramatically based on where you live and work. The state's size means most residents rely on personal vehicles, but major cities offer public transportation options.

Vehicle Ownership

• Average monthly car payment: $400-600
• Auto insurance: $100-200 monthly (higher than the national average)
• Gasoline: Typically $0.10-0.20 below the national average per gallon
• Vehicle registration and inspection: Under $100 annually

Public Transportation

• Dallas DART: $96 monthly pass
• Houston METRO: $96 monthly pass
• Austin CapMetro: $75 monthly pass
• Most smaller cities have limited public transit options

Other Transportation

• Ride-sharing services are widely available in urban areas
• Toll roads are common in major metropolitan areas
• Airport access is generally affordable, with multiple major airports

Texas's car-friendly infrastructure means most residents find vehicle ownership necessary, but lower gas prices and reasonable registration fees help offset costs.

Health Care

Healthcare costs in Texas generally align with national averages, though access and quality can vary between urban and rural areas.

Insurance Costs

• Individual health insurance: $300-600 monthly
• Family coverage: $800-1,500 monthly
• Many employers offer competitive health benefits packages

Medical Services

• Primary care visit: $150-250 without insurance
• Specialist consultation: $200-400
• Emergency room visit: $1,000-3,000+
• Prescription medications: Generally competitive with national pricing

Texas has excellent medical facilities in major cities, including world-renowned institutions in Houston's Medical Center. Rural areas may have limited options, requiring travel to larger cities for specialized care.

Child Care

Childcare, which averages $8,759 annually in places like Austin, represents a significant expense for families with young children.

Daycare and Preschool

• Infant care: $800-1,200 monthly
• Toddler care: $700-1,000 monthly
• Preschool: $500-800 monthly
• Before/after school programs: $200-400 monthly

Other Child-Related Costs

• Summer camps: $100-300 per week
• Youth sports and activities: $50-200 monthly
• School supplies and fees: $200-500 annually per child

Quality childcare can be competitive in major metropolitan areas, so many families research options well before moving or starting families.

Further Reading: Nanny vs daycare costs

Taxes

One of Texas's biggest financial advantages is its tax structure, particularly the absence of state income tax.

Tax Advantages

• No state income tax on wages or investment income
• Sales tax rates: 6.25% state rate plus local taxes (total typically 7.25-8.25%)
• Property taxes vary by county but tend to be higher than the national average

Property Taxes

• Average effective rate: 1.6-2.2% of home value annually
• Homestead exemptions are available for primary residences
• Agricultural and senior exemptions may apply

Other Taxes

• Vehicle registration and inspection fees
• Franchise tax for businesses
• Hotel occupancy taxes for travelers

The lack of state income tax can save residents thousands annually, though higher property taxes help fund local services and schools.

Miscellaneous Costs

Beyond the major expense categories, several other costs contribute to your overall budget:

Entertainment and Recreation

• Movie tickets: $12-16
• Gym memberships: $30-80 monthly
• State park entry: $3-7 per person
• Professional sports tickets: $20-200+, depending on team and seating

Personal Services

• Haircuts: $15-60, depending on the salon
• Dry cleaning: $3-8 per item
• Pet care: $30-100+ monthly for dogs
• Home services: Competitive rates due to lower labor costs

Shopping and Retail

• Clothing: No significant difference from national averages
• Electronics: Standard national pricing
• Home goods: Often competitive due to no state income tax
• Online shopping: Standard shipping rates and times

How Much Money Do You Need to Live Comfortably in Texas?

For general expenses (excluding rent), a family of four typically spends around $3,900 monthly, while single individuals need about $1,100 in cities like Austin. The amount needed to live comfortably in Texas depends heavily on your location, family size, and lifestyle preferences. 

Single Person Budget

• Housing: $800-1,500 monthly
• Other expenses: $1,100 monthly
• Recommended annual income: $45,000-65,000

Family of Four Budget

• Housing: $1,500-3,000 monthly
• Other expenses: $3,900 monthly
• Recommended annual household income: $85,000-125,000

These figures assume moderate lifestyle choices and building some savings. Higher-income areas like Austin, Dallas, and Houston require budgets on the upper end of these ranges, while smaller cities and rural areas allow comfortable living at the lower end.

Financial experts typically recommend that housing costs shouldn't exceed 30% of your gross income, and total monthly expenses shouldn't exceed 80% of your take-home pay to allow for savings and unexpected expenses.

What City Has the Lowest Cost of Living in Texas?

Crockett County is the cheapest place to live in Texas, with a median property tax bill of only $466 and median home prices around $140,000 for 2025.

Most Affordable Cities in Texas

Other Small Town Options

• Harlingen: Affordable groceries and housing in the Rio Grande Valley
• Brownsville: Low overall costs, border town advantages
• Beaumont: an Industrial city with reasonable housing prices

Larger Affordable Cities:

• San Antonio: Major city amenities with moderate costs
• El Paso: Diverse culture, reasonable housing market
• Corpus Christi: Coastal living without extreme prices
• Amarillo: Panhandle location with very affordable housing

What Makes These Cities Affordable

• Lower housing demand compared to Austin/Dallas/Houston
• Reduced commercial and retail costs
• Lower local tax rates in some areas
• Less competition for services and amenities

Most Expensive Cities in Texas

Want to know where living costs hit the hardest? These are the priciest places to live in Texas:

When choosing an affordable Texas city, consider factors beyond just cost:

• Job market and career opportunities
• The quality of schools, if you have children
• Healthcare facility access
• Entertainment and cultural amenities
• Climate preferences and weather patterns

The most affordable areas often require trade-offs in terms of amenities, job opportunities, or proximity to major metropolitan areas. However, many offer strong communities, lower stress levels, and the ability to achieve homeownership and financial goals more easily.

Ready to Make the Move?

Texas offers a compelling combination of affordability, opportunity, and quality of life that continues to attract new residents from across the country. From the bustling energy of Houston and Dallas to the laid-back charm of smaller Hill Country towns, there's a Texas community that can fit almost any budget and lifestyle preference.

The key to covering moving expenses is thorough research and realistic budgeting based on your specific situation and goals. Consider visiting potential destinations, connecting with local real estate professionals, and carefully calculating your expected expenses before making the move.

If you need fast deposits for your move, or have unexpected costs during your transition, Simple Fast Loans can provide quick funding with flexible installment loans in Texas from $200 - $1500, even if you have less-than-perfect credit. This can help bridge the gap while you settle into your new home and start enjoying everything the Lone Star State has to offer.

With proper planning (and the right financial tools), Texas can give you the chance to live comfortably, save money, and start your next chapter with confidence.

Sources

U.S. Bureau of Economic Analysis – Regional Price Parities & Cost-of-Living Data
https://www.bea.gov/data/prices-inflation/regional-price-parities

Texas Comptroller of Public Accounts – Taxes in Texas: No State Income Tax
https://comptroller.texas.gov/taxes/

U.S. Department of Energy – Electricity Prices and Consumption Data
https://www.eia.gov/electricity/

Note: The content provided in this article is for informational purposes only. Contact your financial advisor regarding your specific financial situation.