Alaska's REAL Cost of Living

Do you have what it takes to face polar bears and glaciers? If that's the case, you might be able to justify Alaska's high cost of living. Alaska is the ideal place to live for people who enjoy cold weather and long nights due to the state's vastness, amazing scenery, and abundant wildlife.

Sadly, Alaska is also known as one of the costliest states. The Alaskan cost of living index was 24.6 in January of 2021. That's 0.9% more than the typical American  

You should figure out whether or not you can afford to live in Alaska before you pack your winter coats and head west.  

Can I manage the Alaskan price of living?

Depending on the city you settle in, the cost of living in Alaska may or may not be within your means. The sheer size of the state means there is a great diversity in housing options, from bustling metropolises to sleepy little towns.  

Larger urban centers typically have higher costs. Salary.com reports that Anchorage is 37% more expensive than the national average, making it the most expensive city in Alaska. Juneau, the state capital, has a similar cost of living to Anchorage, at $36. 5 percentage points above the average for the country  

However, the price of living varies considerably from one Alaskan city to the next. It's true that many locations, especially smaller towns, have lower housing costs. And real rural areas could be cheaper in some ways (housing) while costing more elsewhere (because of the additional distance goods must travel).  

Use a cost of living calculator online to figure out if Alaska is within your financial means. Enter an Alaska city and see how it stacks up against the rest of the country. The cost of living in your current city can be compared to that in your (potential) future Alaskan hometown using this calculator.  

Several Variables Contributing to Alaska's High Cost of Living

There are many factors that can affect your monthly expenses after a big move, such as to a new state.  

Housing 

The cost of housing in Alaska should be one of the first things you consider when planning your budget.  

In 2020, the average Alaskan home cost $265,385, just slightly more than the median price across the country of $263,000. This figure varies, of course, from city to city.  

Anchorage has an average home price of $303,601

Juneau's Median Home Cost is $364,295

Fairbanks' Typical House Costs: $238,576

You can save or lose almost $125,000 depending on which of these three cities you choose to call home.  

A real estate agent in Alaska can help you figure out where you want to live and what kind of budget you have to work with.  

Utilities

There is one area in which Alaska is significantly more expensive than the rest of the country: utilities. The cost of electricity accounts for the bulk of this total. The long Alaskan winter brings with it freezing temperatures and the accompanying high cost of heating.  

Utilities, like housing, can vary widely depending on where in the state you live. Energy costs could be 5-10% lower in a warmer city like Miami than in Anchorage. The cost of keeping warm in the winter can easily exceed $300 a month in some areas.  

Food

A major factor in Alaska's high cost of living is the price of food. Due to its remote location, many restaurants and grocery stores require long transport times for food. Particularly in rural areas, where housing costs are lower but food costs are higher, this is the case. And if gas prices rise, so will food costs.  

Anchorage has some of the lowest food prices in Alaska; a gallon of milk costs about $4, and a loaf of bread costs about $3. 38 Alaskans can expect to spend a minimum of $451 per year on food. 71, which is significantly lower than the average of $323 across the country 72  

A meal at a moderate restaurant will set you back about $15 if you opt to eat out. If you travel to Fairbanks, where the average cost of a meal is $20, this will increase by more than 30%.  

Transportation

In Alaska, most people have their own cars because public transportation is so scarce. If you plan on getting around Anchorage by car, you should prepare for higher expenses like monthly payments, repairs, insurance, and gas.  

The average price of a gallon of gas in Alaska, as reported by the AAA, is $0. 20 to $0 35 points above the national average The national average price of a gallon of gas in January 2021 was $2. 38 The price increased to $2 in Alaska. 58  

Premiums for auto insurance in Alaska are, on the whole, about 19% cheaper than the national average.  

Taxes

When compared to the rest of the United States, Alaska fares quite well here. There is no statewide sales or income tax (though some localities do impose their own). Even though it may not seem like much now, the lack of taxes in Alaska can result in a substantial increase in the amount of money you keep each month.  

Alaska has a property tax rate of 11 percent. 9%, which is about the same as the rest of the country.  

Traveling

Alaska's remoteness is a factor in the state's high cost of living. Because of its relative isolation from the rest of the country, trips to see loved ones can break the bank.  

To hell with making the quick trip to another state When traveling, you should budget for a sizable expense.  

How to Adjust to Alaska's High Living Costs

If, after careful consideration of all costs, you still think Alaska is the place for you, then it's time to start looking for a real estate agent. A real estate agent can guide you through the process of deciding which city is best suited to your financial and personal needs.  

UpNest, a free service owned by Realtor.com, can streamline and simplify this procedure. We'll put you in touch with the best Alaska real estate agents so you can get bids from multiple agencies. Once you've found the right real estate agent in Alaska, the two of you can set out to search for your future home.  

You can find local real estate agents' ratings, fees, and track record of closing deals side-by-side on the UpNest platform.

UpNest customers can take advantage of the competitive, below-average commission rates offered by our carefully vetted network agents. You are under no compulsion to work with a member of our Realtor network; however, if you can save thousands of dollars in commission, why wouldn't you? Just type in your zip code below to get started.