I'll try to explain but someone please correct me if I'm wrong... Basically cost of living is tied to the value of the dollar. The way they figure the value of the dollar is to take into account ALL the expenses you may have in a certain state and compare it to another state. For example in California I pay a lot in rent and goods (everything else) meaning the value of my dollars is lower than someone in South Dakota. This could be because they pay less rent OR maybe they pay less rent and less for goods. Both are taken into account. Something that is important to remember though is that usually in the higher cost states jobs pay more to compensate for the difference. So in South Dakota I may get $10 an hour to work at a gas station where as California will pay $14 and hour. To use an anecdote; I have a friend who moved to Texas because rent was cheaper and they ended up taking a $3 an hour pay cut. They complain a lot because even though rent is cheaper they have almost the same lifestyle. Anyway, I would recommend looking into jobs in the state you would like to move to and deciding from there. If you can get a job that pays better then the higher rent may not matter so much. Plus, I hear Vermont is amazing :)