How Much Does It Cost to Live in Minnesota?

The cost of living represents the financial outlay necessary to maintain a specific standard of living in a particular location. It encompasses various expenditures, including housing, food, transportation, taxes, and healthcare. Understanding these costs provides a benchmark for evaluating expenses across different geographic areas. While Minnesota generally offers a moderate cost of living, expenses can vary significantly based on individual lifestyle choices, household size, and whether one resides in an urban center or a more rural setting.

Housing Expenses

Housing typically constitutes the largest portion of an individual’s or family’s budget. In Minnesota, the median rent is around $1,505.37 per month, which is lower than the national median. For specific apartment sizes, the statewide average rent is approximately $1,124 for a studio, $1,332 for a one-bedroom, and $1,639 for a two-bedroom apartment.

Rental costs show considerable variation across the state. In the Twin Cities metropolitan area, including Minneapolis and St. Paul, average rents are generally higher, with a one-bedroom in Minneapolis averaging about $1,391 and a two-bedroom around $2,067. Conversely, cities like St. Cloud and Moorhead offer more affordable options, with Moorhead’s two-bedroom apartments averaging around $1,020 and St. Cloud’s one-bedroom units at approximately $875. Rural areas often present even lower rental prices.

The median home price in Minnesota stood at approximately $360,000 as of recent data, which is below the national median. For those purchasing a home, the typical monthly mortgage payment, assuming a 10% down payment, rose to around $2,500 in 2024 from $1,450 in 2020.

Utility costs are an additional component of housing expenses. The average monthly electric bill in Minnesota is approximately $110.19, while natural gas costs about $11.85 per thousand cubic feet. When considering all utilities, including electricity, natural gas, water, internet, and trash removal, the average monthly cost can range around $306, potentially increasing with internet and phone bills. These costs can fluctuate, particularly with higher energy bills during the colder winter months.

Transportation Costs

Transportation expenses in Minnesota vary based on reliance on personal vehicles versus public transit. The average price per gallon for regular gasoline in Minnesota has recently been around $2.932 to $3.22.

Auto insurance premiums in Minnesota average around $986.19 annually for liability, collision, and comprehensive coverage. Minnesota operates under a no-fault insurance system, requiring drivers to carry personal injury protection coverage.

For those in urban centers, public transportation offers an alternative to car ownership. The Metro Transit system in the Twin Cities provides bus and light rail services. A single ride fare is typically $2.50 during rush hour and $2.00 during non-rush hour, with daily passes available for $5.00. Monthly passes offer unlimited rides for $80.00. While public transit is a viable option in the most densely populated areas, personal vehicles remain essential for residents in more rural parts of the state due to limited public transport access.

Food and Daily Necessities

Food expenditures contribute significantly to the overall cost of living. A typical Minnesota household spends approximately $250.56 per week on groceries for home consumption. For a family of four, monthly grocery expenses can range from $900, while a single adult might spend between $300 to $400 per month. These figures can vary, with urban areas like Minneapolis-St. Paul generally experiencing higher grocery costs compared to smaller cities such as Rochester or Duluth.

Dining out also forms part of the food budget. Minnesota residents spend an average of $97.07 weekly on food prepared outside the home. The cost of dining out can range widely, from casual meals at around $15-$20 per person to more upscale experiences exceeding $50 per person.

Beyond food, daily necessities include personal care items, household cleaning supplies, and other general merchandise. These items, along with clothing and personal care services like haircuts, contribute to monthly expenses.

Healthcare and Other Essential Services

Healthcare costs in Minnesota represent a notable portion of living expenses. For individuals, the average monthly premium for a benchmark health plan through the marketplace is around $343, which is lower than the national average. Employer-sponsored health insurance costs for employees in Minnesota average about $1,537 annually, with employers typically covering a larger portion of the total premium.

Out-of-pocket healthcare expenses, including deductibles, co-pays, and prescription costs, also affect the overall financial burden. Minnesota’s overall cost of medical care can be higher than national averages.

Childcare expenses can be substantial for families with young children. Full-time daycare costs in Minnesota generally range from $800 to $1,200 per month. This represents a significant financial consideration for many households. Other essential services, such as home maintenance and personal services, also factor into the budget.

Tax Considerations

Taxes significantly influence the overall financial burden on residents in Minnesota. The state implements a progressive income tax structure, with rates ranging from 5.35% to 9.85%. An additional 1% tax on net investment income exceeding $1 million was introduced starting in the 2024 tax year, bringing the top rate for such income to 10.85%.

Minnesota’s state sales tax rate is 6.875%. When local sales taxes are included, the average combined state and local sales tax rate can reach 8.04%. While most groceries are exempt from sales tax, other goods and services are subject to this rate.

Property taxes in Minnesota are collected at the local level and contribute to funding schools, counties, cities, and other services. The effective property tax rate, which is the median property tax paid as a percentage of median home value, averages 0.98% across Minnesota. This rate can vary considerably based on the specific county and local taxing jurisdictions. Property taxes are typically due in two equal installments, generally on May 15 and October 15.