How Much Does It Cost to Live in Minnesota?

The cost of living in Minnesota involves various financial considerations, including housing, daily expenditures, and the tax environment. Evaluating these elements helps individuals and families plan budgets. Minnesota generally offers a cost of living that is often lower than the national average, making it an attractive option for many. This affordability is influenced by various factors.

Housing Expenses

Housing is a substantial monthly expense. In Minnesota, the median rent is around $1,505.37, which is slightly below the national median. For renters, a one-bedroom apartment typically costs about $1,062 per month, while a two-bedroom unit averages $1,273 monthly. Larger family homes, such as those with three or four bedrooms, have median rental costs of approximately $1,500 and $1,642 per month, respectively.

For individuals considering homeownership, the median home price in Minnesota is approximately $360,000, although recent data indicates the average sale price rose to $404,512 in 2024. This figure can vary, with the Minneapolis-St. Paul metropolitan area seeing a median home price of $373,500 in the first quarter of 2024. A typical mortgage payment on a median-priced home with 10% down is $2,500 in 2024.

Property taxes also contribute to the overall housing cost for homeowners. Minnesota’s effective property tax rate is around 0.98% of a home’s value. This places Minnesota’s property tax rates among the higher tiers nationally.

Daily Essential Expenses

Groceries are a significant portion of daily expenses. A typical Minnesota household spends approximately $395.39 per week on food. Individuals might spend $250 to $350 monthly, while families of four might allocate $600 to $900 for groceries each month. Grocery costs in the state tend to be about 11% higher than the national average.

Transportation costs include fuel, vehicle maintenance, and public transit. A gallon of regular gasoline is around $3.22. For car owners, the average annual auto insurance premium is approximately $986.19. Public transportation options are available, with a standard bus fare costing about $2.00 per ride, and monthly passes ranging from $65 to $120 depending on usage restrictions. Annual vehicle maintenance expenses are roughly $1,200.

The average monthly electric bill in Minnesota is around $110.19. Natural gas costs are approximately $11.85 per thousand cubic feet. When combining electricity, water, heating, and garbage, monthly utility bills average about $306, increasing to around $585 when internet and phone bills are included.

Healthcare and Miscellaneous Personal Spending

Healthcare expenses include insurance premiums, out-of-pocket medical costs, and prescription medications. Employees in Minnesota typically pay about $1,537 annually for employer-sponsored health insurance coverage. For those utilizing the health insurance marketplace, the average monthly premium for a benchmark plan is around $343.

Out-of-pocket costs for medical services can vary. A routine doctor’s check-up without insurance might cost approximately $150. Specific medical services like dental care average between $113.66 and $123.83, while doctor visits can range from $167.07 to $226.01. Prescription medication costs vary significantly, with generic drugs typically costing $10 to $20 with insurance, whereas brand-name prescriptions can exceed $200 monthly.

Miscellaneous personal spending includes items like clothing, personal care products, and entertainment. Discretionary spending on these categories may range from $100 to $300 per month. For families, childcare is another significant expense, with full-time daycare costs typically falling between $800 and $1,200 per month. Private school tuition averages around $8,000 annually.

State and Local Tax Considerations

Minnesota’s tax structure impacts the cost of living. The state imposes a graduated individual income tax. For the 2024 tax year, rates range from 5.35% for lower incomes up to 9.85% for higher brackets. An additional 1% tax on net investment income exceeding $1 million was introduced starting in 2024, bringing the effective rate on that portion to 10.85%.

The state sales tax rate in Minnesota is 6.875%. Local sales taxes can be applied in addition, ranging from 0.5% to 3%. This results in an average combined state and local sales tax rate of approximately 8.04% to 8.12%. While most groceries are exempt from sales tax, certain food items like candy and soda remain taxable.

Property taxes are collected by local governments to fund essential services. The amount of property tax is determined by a property’s estimated market value and its classification. Most property tax payments are due in two installments, typically on May 15 and October 15.

Regional Differences in Living Costs

The cost of living varies considerably by geographic region. The Twin Cities metropolitan area, encompassing Minneapolis and St. Paul, generally presents higher living expenses. The average rent in Minneapolis was $1,396 per month as of August 2025, and the median home price was $340,000 in April 2024. St. Paul’s median home price was slightly lower at $300,000 during the same period.

In contrast, rural or smaller urban areas throughout Minnesota offer more affordable living options. Cities like Moorhead and St. Cloud have lower average rental costs, with a one-bedroom apartment in Moorhead averaging $930 and in St. Cloud averaging $875. Some smaller towns may even offer rental homes for less than $700 per month.

Regional differences extend beyond housing. Grocery costs are generally 10% to 15% higher in urban centers compared to smaller cities. Transportation expenses, such as car insurance premiums, can be higher in more densely populated areas. Public transportation systems are also more developed in metropolitan areas, influencing commuting costs.