A salary can feel generous or tight depending on one thing above all else: where you live. In some parts of the country, $40,000 might barely cover the basics. In more affordable places, though, the same paycheck can stretch surprisingly far.
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To see just how much difference location makes, I asked ChatGPT to help identify where a $40,000 salary goes the furthest in the U.S. and what that looks like in real living expenses.
The Short Answer
In a nutshell, a $40,000 annual income stretches furthest in Midwestern and Southern cities, where housing, utilities, transportation and everyday costs run well below national averages. The key is finding places with a cost-of-living index lower than the U.S. baseline of 100.
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The Specifics
Drawing from World Population Review, GOBankingRates’ studies and state-level research, ChatGPT offered up some of the most affordable options:
The States
- Missouri has a cost-of-living index of around 89, ranked as the sixth lowest cost of living in the U.S. for the second quarter of 2025, according to the Missouri Economic and Research Center.
- Mississippi has the lowest statewide cost-of-living index in the country (around 83.3, compared to a U.S. average of 100), the AI said. Housing is especially cheap, with median home values well below the national average.
- Kansas (index 86.5) and Alabama (87.9) also both offer significantly lower housing and living expenses.
The Cities
- Oklahoma City shows up frequently in analyses of paycheck-to-cost-living ratios as strong performers.
- Detroit; Cleveland; Knoxville and Chattanooga, Tennessee, and smaller Texas metros are also contenders for lower costs of living.
What Makes a Place Stretch a Salary Further
While generally speaking just saying that a place is cheaper is a little obvious — when we get down to the specifics, what makes these places more affordable than others? Here are a few of the biggest factors:
- Low housing costs: These places have cheaper rent and lower home values that translate into lower mortgage payments, freeing up a big chunk of most people’s budgets.
- Affordable transportation: These places offer short commutes, less traffic, lower gas costs and/or more walkability or public transit.
- Moderate utility and food costs: These places have lower energy costs and, a key piece of most people’s budget, lower grocery prices well below big-city averages.
- Stable job opportunities: While these places may not offer Silicon Valley wages, they typically have consistent work and lower unemployment.
- More manageable everyday expenses: From insurance and taxes to entertainment and health costs, a lower baseline of expenses can stretch a fixed income much further.
ChatGPT Put To the Test
When pressed to identify the single cheapest options, ChatGPT pointed to:
- State: Mississippi, which “consistently ranks as the most affordable state in the U.S.”
- City: Decatur, Illinois, with living costs about 20% below the U.S. average.
A Caveat
“Cheapest” isn’t the same as “best” ChatGPT said. Wages, healthcare, local amenities and job markets all matter, too. But if the goal is stretching a modest salary as far as it can go, Mississippi and cities like Decatur remain strong contenders.
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This article originally appeared on GOBankingRates.com: I Asked ChatGPT To Find Where a $40K Salary Goes Furthest in the US
