Are you ready to brave grizzlies and glaciers? If so, the cost of living in Alaska might be worth it for you. Known for its vast expanses, amazing scenery and abundant wildlife, Alaska is the perfect home for anyone who enjoys the cold weather and long nights.
Unfortunately, Alaska is also known for being one of the most expensive states. As of January 2021, the cost of living in Alaska was 24.09% higher than the national average.
So before you pack your winter coats and head west, make sure you do all the necessary calculations to ensure that you can actually afford the cost of living in Alaska.
Can I afford the cost of living in Alaska?
Yes, you can probably afford the cost of living in Alaska, but it depends mainly on which city you choose. Because the state is so large, you will have a wide variety of choices in relocating, from big cities to rural towns and everything in between.
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The bigger cities are more expensive. According to salary.com, Anchorage is the most expensive city in Alaska, coming in at 37% higher than the national average. Its capital, Juneau, isn’t too far behind, with a cost of living 36.5% higher than the national average.
But the cost of living in Alaska varies greatly from city to city. Many places, especially smaller towns, are much more affordable. And the truly rural areas might be more affordable in some ways (housing) and more expensive in others (goods must be transported a longer distance, raising prices).
The best way for you to determine whether you can afford to live in Alaska is to use an online cost of living calculator. You can enter a city in Alaska to find out how it compares to the national average. Or use it to compare the cost of living in your current city versus your (possible) future hometown in Alaska.
Cost of Living in Alaska Factors
When considering a large move, such as to another state, there are many factors that will influence your cost of living.
Housing
Since housing represents so much of your budget, whether you can afford a home in Alaska should be one of your first calculations.
In 2020, the average home price in Alaska was $265,385, barely above the national average of around $263,000. Naturally, this number changes from city to city.
Average Home Price, Anchorage: $303,601
Average Home Price, Juneau: $364,295
Average Home Price, Fairbanks: $238,576
The difference in just those three cities is almost $125,000, so the city you move to will make a big difference in the price you pay for a home.
A licensed Realtor in Alaska can help you decide which city is the best fit, then find a home that falls within your budget.
Utilities
Utilities are an area where Alaska tends to be much more expensive than the rest of the nation, averaging roughly 33% higher than the national average. A large portion of this is the electricity bill. Due to its frigid temperatures, the cost of heating will cause utility bills to skyrocket during the long Alaskan winter.
Like housing, utilities can be dependent on your location within the state. Residents living in a warmer city might see bills 5%-10% lower than in a colder city such as Anchorage. In some particularly cold regions, electricity bills in the winter can be as high as $300 per month, just to stay warm.
Food
Food prices can significantly contribute to the high cost of living in Alaska. Due to its location, food often needs to be transported long distances to get to grocery stores and restaurants. This is especially true for more rural areas, where lower housing prices are paired with higher food bills. And if gasoline prices go up, food prices will go even higher.
When it comes to food prices, Anchorage is one of the most affordable cities in the state; milk costs around $4 per gallon, and a loaf of bread will cost you $3.38. On average, the minimum grocery bill for one person in Alaska is estimated to be $451.71, compared to the national average of $323.72.
If you prefer dining out, a meal at a mid-range restaurant will cost you about $15. This price increases by over 30% if you go to Fairbanks, where the average meal runs around $20.
Transportation
Public transportation is virtually nonexistent in Alaska; most residents own a car. Car payments, maintenance, insurance, and fuel costs will all likely have to be added into your budget if you move to Alaska.
According to the AAA, gas prices in Alaska usually run $0.20 to $0.35 higher than the rest of the country. In January 2021, the national average for a gallon of gasoline was $2.38. In Alaska, that price rose to $2.58.
On the plus side, car insurance premiums in Alaska come in at around 19% lower than the national average.
Taxes
This is one area where Alaska comes out much better than the rest of the country. There is no state income tax or state sales tax (although some cities do have their own sales tax). While this might seem like a small thing, over time, living in Alaska the lack of taxes can really add up to significantly more money staying in your pocket.
The property tax rate in Alaska is 11.9%, which is right in line with the national average.
Traveling
One important thing to consider when calculating the cost of living in Alaska is its location. It is so far from the rest of the states that visiting friends and family can be expensive.
Forget about a short drive to another state. You will have to be prepared to spend quite a bit of money whenever you travel.
Moving to and Understanding the Cost of Living in Alaska
If, after looking at all possible expenses, you’ve decided that Alaska is the state for you, your next step will be to find a real estate agent. A Realtor can help you choose the best city for your budget and lifestyle and then help you find your dream home.
The free service from UpNest, whichis owned by parent companyRealtor.com, can make the process quick and simple. We will connect you with the top real estate agents in Alaska, and you will receive competitive proposals from each of them. Once you’ve chosen the best real estate agent for you, together you can find the perfect Alaskan home.
The UpNest platform allows you to compare multiple agents in your area so you can compare reviews, commission rates, previous sales, and more.
Our network agents have been carefully vetted and often offer competitive, lower than averagecommission rates to UpNest customers. There is no obligation to sign up with one of our network Realtors, but when you can potentially save thousands on commission – why wouldn’t you? If you’re ready to get started, just enter your zipcode below!
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How much do you get paid to live in Alaska per month?
Alaska gives out a portion of the state’s oil royalties to each resident through an annual dividend, so it is not a monthly stipend. In 2018, that dividend came out to$1,600 per person. That comes out to just over $100 per month per person.
How much is a gallon of milk in Alaska?
Milk is a good benchmark for the cost of groceries for many people. Depending on where you live, the cost of milk can vary considerably. According to the USDA, the average gallon of whole milk is $3.59 a gallon. In Alaska, the price was higher, at $3.79 a gallon.
