Which States Have Been Hit the Hardest by Inflation?

Inflation, or a rise in prices and decrease in buying power, is hitting American families hard. Rates have been spiking for months and currently stands at 7.7%. When it will slow down is anybody’s guess. This makes it increasingly difficult to afford necessities like food, transportation, and housing. Put simply, when inflation is escalating, your dollar buys less than it did in the past.

How much of an impact has inflation had on the U.S. and where is it at its worst? A report from the Joint Economic Committee provides up-to-date data as of July 2022 on how much prices have changed for everyday items, for an average family, in each state since January 2021.

This information can help you make informed decisions about your spending and your future. If you’re living in a state with surging inflation, you may want to pay special attention to balancing your budget so you don’t wind up depleting your emergency savings or ringing up credit card debt.

According to the report, these are the 25 states with the highest inflation rates over the year reviewed, arranged in descending order, with the steepest figure at the top. They are ranked by the impact on monthly spending in dollars vs. the percent of inflation.

Read on to see if your state made the list.

25 Highest Inflation Rates by State

1. Washington D.C.

OK, it’s not technically a state, it’s a district, but our nation’s capital tops the list of locations feeling the impact of inflation. With an inflation rate of 13.9%, DC saw a monthly uptick in expenses due to inflation at an eye-watering $1,037 in the year studied. That kind of impact can certainly give a household reason to take a fresh look at making a budget and perhaps even consider moving to a less expensive area.

2. Colorado

There are several main causes of inflation, and they seem to have conspired to raise prices in Colorado. There, the cost of living has increased by a staggering 15.4% since January 2021. This means that the average household in the state will spend about $937 more this year than last year. The main driver of this inflation is transportation costs, representing an increase of $410/mo.

3. Utah

In Utah, inflation has been rising, with the total inflation up 15.4% or $910 per month for the average family. While this may not seem like a lot if you earn a high salary, that kind of price hike can significantly impact residents, particularly those on a fixed income.

4. Arizona

Arizona has seen a significant increase in inflation over the past year, with prices rising by $833. This figure represents a significant burden for residents and may well encourage them to find ways to save money daily.

While the cost of living in Arizona is still relatively low compared to other states, the increasing cost of goods and services puts pressure on households as the prices have increased at what is among the highest rate in the United States, a challenging 15.4%.

5. Nevada

Inflation has been rising by 15.4% in Nevada, with families now shelling out an average of $831 more per month than in January 2021. Rising energy and transportation costs seem to be fueling this surge.

Additionally, many goods and services have become more expensive as businesses attempt to offset their own rising costs. This has decreased purchasing power for Nevada residents, making them adjust their budgets and spending habits to keep up with inflation.

Although it can be challenging to cope with rising costs, it’s important to remember that there are pros and cons of inflation. It is a natural part of the economy and will continue to fluctuate over time.

6. Minnesota

Life has gotten considerably more expensive in Minnesota. With inflation soaring 13.8% over a recent year, residents are shelling out $831 more just to keep up.

With this kind of price trajectory, it can be worthwhile to consider whether to pay down debt or save money when trying to make ends meet. When your money doesn’t go as far, you need to be smart about prioritizing your available funds.

7. Wyoming

Average monthly expenses in Wyoming hiked up $812 a month as of July 2022, compared with January 2021, putting it the seventh highest position on the ranking of U.S. states.

The main drivers behind this increase have been higher transportation, energy, and housing costs. These factors can put a strain on Wyoming households already struggling to make ends meet and can also leave other families with less disposable income to put towards long-term money goals, such as investing for retirement.

8. California

America’s most populous state with more than 39 million residents, California clocks in as the 8th most inflationary state in the nation. Residents paid an average of $794 in monthly expenses in July 2022 vs. January 2021. That’s a lot of people feeling the pinch at the gas pump, supermarket, and elsewhere.

9. Alaska

Our northernmost state has experienced intense inflation over the past year or so. The average Alaskan household is now spending 12.5% more, which equals an additional $790 per month. Of that figure, $345 went to rising transportation costs and $197 towards energy costs.

10. Montana

Inflation in Montana is up 15.4 percent, or $790 per month for the average family, which puts the state in the number 10 position of states being hit hardest by rising prices.

When dealing with this kind of pressure on your income, it may be wise to think about bringing in more income. That’s one of the benefits of a side hustle and can help make ends meet when prices zoom upward.

11. Illinois

The cost of living in Illinois has been increasing steadily over the past few years; between January of 2021 and July of 2022, the typical household is shelling out $787 more per month to pay for the same expenses. That reflects rising costs of housing, energy, and transportation, among other factors, to the tune of 14.1%.

If you are grappling with the impact of inflation and feel as if you can’t keep up with bills, especially credit card charges with their high interest rates, you might consider a balance transfer credit card. These can give you a reprieve from high interest rates for a period of time, which may help you pay down your debt.

12. Florida

Since January 2021, inflation has increased significantly in Florida, with the average Sunshine State household paying $784 more every month to maintain their standard of living. This is a significant increase of 13.9% and can certainly have an impact on how far one can stretch a salary.

If you’re a Floridian looking for ways to enhance your income, you might consider downsizing some of your gently used possessions (clothing, electronics, etc.); there are many options for places to sell your stuff that’s no longer wanted.

13. Maryland

Brace yourself, Marylanders: You’re paying $774 more for your living expenses over the past year and change. That represents inflation of 13.9%, and it can certainly stress a budget.

If you’re residing in Maryland, now might be a good time to review your outflow of cash and see where you might economize. How many streaming platforms do you have vs. really need? How many fancy coffees and take-out dinners are you paying for? A bit of belt-tightening can help bring expenses back under control

14. Hawaii

While the rate of inflation in Hawaii is “only” 12.5% currently, the fact that the Aloha state has such a high cost of living to start with means it’s number 14 on the list. Every month, inflation has lifted household costs on an average of $768.

15. Idaho

Next up is Idaho, a state that has been hard hit by inflation. Prices have increased by 15.4%, or $763 per month for the average household. This spike reflects a combination of factors, including the state’s growing population, which is driving up demand for goods and services.

16. Delaware

In Delaware, the average family is paying $760 more per month for their expenses than in January 2021, representing an uptick of 13.9%. With rising gas prices and housing costs, many families may have to slash their budgets. When doing so, it’s worthwhile to research tips to hedge against inflation.

17. North Dakota

If you live in North Dakota, you’ve likely felt the pinch over the past year and change as inflation has zoomed up 13.8%. For the average family in the state, that means they are spending $760 more per month to make ends meet and pay their bills.

18. South Dakota

Right behind its neighbor to the north comes South Dakota. Here, prices have also ticked up 13.8%, resulting in $759 more being paid out per average household. That’s a whole lot more money for most families to come up with.

If you live in South Dakota or elsewhere and feel stretched too thin, it can be wise to look into how to pay off outstanding debt and open up some breathing room in your budget.

19. Nebraska

Things have gotten pricier in the Cornhusker state: With an inflation rate of 13.8%, the typical household is shelling out an additional $754 a month in July 2022 vs. January 2021. That’s a steep increase and could inspire a person to look for a low-cost side hustle to bring in some additional income.

20. Texas

Inflation has been on the rise in Texas, with the total inflation coming in at 14.8%. If you’re a Texan, that means you are likely needing to come up with an extra $747 per month to make ends meet. Every time you fill your vehicle’s gas tank and pay your energy bill, you may well realize that the amount is significantly higher than before.

21. Virginia

Inflation is a significant problem in Virginia. Prices have ratchet up by 13.9% since January 2021. This means, for instance, that $20 buys less gas than it used to, and residents’ grocery bills are likely to be noticeably higher since they aren’t protected from inflation. It may be a struggle to make ends meet as the average household is forced to come up with an additional $741 per month to cover their expenses.

22. Missouri

Missouri comes in at number 22 on the list of states feeling the impact of inflation. With the inflation rate hitting 13.8%, that means a typical family has to shell out $737 more per month to buy the same goods and services vs. January of 2021.

That can put a tremendous amount of stress on one’s pocketbook. This can be a good moment to review discretionary spending and look for easy ways to save money.

23. Kansas

The next hardest-hit state in terms of inflation is Kansas, according to the Senate’s Joint Economic Committee. The rate of prices rising is 13.8%, with the average household needing to spend $730 per month more to afford the same expenses as in January of 2021. Whether purchasing food or gas, paying rent or the energy bill, costs are rising at a notably high rate.

24. Massachusetts

While the rate of inflation is “only” 10.7% in Massachusetts, that calculates as a $726 expense hike for the typical family, which is significant.

To push back against inflation, you might consider trying to lower some bills. Perhaps you can get your credit card interest rate taken down a notch or negotiate your medical bills to help bring costs under control. It never hurts to inquire and could help you reap savings.

25. New Mexico

Inflation has increased in New Mexico by a significant 15.4%. This represents an average of $720 in additional monthly spending for the average household. The main reason for this price hike lies in the rising cost of energy and transportation.

The Takeaway

Inflation has been in the news over the past year or so, and for good reason: It’s making life more expensive for Americans. Some states have been hit harder than others by this inflation, which means certain households are shelling out even more than others for the same typical monthly necessities, like housing, utilities, food, and transportation. This article shows whether your state lands in the top half of locations most impacted by inflation.

Regardless of where you live, you probably are grappling with the impact of inflation. One way you can push back is with the right banking partner. When you open an online bank account with SoFi, you’ll earn a hyper competitive APY and pay no account fees, which can help your money grow faster so you can pay those bills. Plus, with our Checking and Savings, you can spend and save in one convenient place.

Photo credit: iStock/VioletaStoimenova

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