What Is the Cost of Living in Rhode Island?

This article provides an overview of the cost of living in Rhode Island, detailing the financial commitments residents typically face. It examines various expenditure categories to help individuals understand the economic realities of residing in the state and make informed financial decisions.

Overall Picture of Expenses

Rhode Island’s cost of living index is 112.2 to 112.5, meaning expenses are 12.2% to 12.5% above the national average. This elevated cost profile positions Rhode Island among the more expensive states in the United States. It is more expensive than Connecticut, with some analyses suggesting it can be 21.0% costlier.

Compared to Massachusetts, Rhode Island is 13.0% more expensive overall. However, major cities like Boston are more costly than Providence. Various factors across different spending categories influence Rhode Island’s higher overall expenses.

Key Expense Categories

Housing

Housing represents a significant portion of living expenses in Rhode Island, reflecting the state’s desirability and limited land. The average rent for a residence was $1,964 per month in 2025, which is higher than the national average. This average includes various property types, with pricing influenced by factors like proximity to employment centers and local school quality. The median home price in Rhode Island reached $492,939 in 2025, indicating a robust housing market.

Utilities

Utility costs also contribute to the overall expenditure for Rhode Island residents. Monthly costs for essential utilities include electricity, natural gas or heating oil, water, sewer services, and internet. Utility prices in Providence are estimated to be 39% higher than the national average. This can result in higher monthly outlays, especially for heating and cooling.

Food

Grocery prices in Rhode Island are generally higher than the national average, with Providence showing grocery costs about 1% above the national average. An individual’s monthly grocery bill ranges from $350 to $450. A family of four can expect to spend between $800 and $1,200. Dining out also reflects these higher costs, with a casual meal often exceeding $15 per person and coffee prices around $4-$5.

Transportation

Transportation expenses in Rhode Island encompass both vehicle ownership and public transit options. Gasoline prices in the state generally align with or are slightly above the national average. Average car insurance premiums in Rhode Island are high, often exceeding $1,500 annually, influenced by factors like population density and accident rates. The Rhode Island Public Transit Authority (RIPTA) offers bus services with a standard adult fare of $2.00 per ride, or $6.00 for a day pass.

Healthcare

Healthcare costs in Rhode Island are also elevated, with expenses for medical services and insurance premiums generally higher than the national average. Providence’s healthcare costs are 3% higher than the national average. This includes health insurance premiums, which vary based on coverage type and provider, and out-of-pocket expenses for doctor visits or prescription medications.

Childcare

Childcare costs in Rhode Island represent a significant financial burden for families with young children. Full-time daycare for one child can cost upwards of $13,000 annually, placing substantial pressure on household budgets. These expenses vary based on the child’s age, facility type, and location. For many families, childcare can be a considerable monthly expenditure, often comparable to housing costs.

Taxation and its Impact

Taxation significantly influences the overall cost of living in Rhode Island, affecting residents’ disposable income and budgeting. The state employs a graduated individual income tax system, with rates ranging from 3.75% to 5.99% for the 2025 tax year. This means higher earners contribute a larger percentage of their income to state taxes.

Rhode Island has a statewide sales tax rate of 7.0%, applied to the sale of most tangible goods and certain services. There are no additional local sales taxes, maintaining a uniform rate across all municipalities. This tax adds to the cost of consumer goods.

Property taxes in Rhode Island are notably high, consistently ranking among the highest in the nation. The average effective property tax rate is between 1.13% and 1.63% of a property’s assessed value, though this varies by city and town. These taxes are based on the market value of the property, with revaluations occurring periodically. Homeowners face median annual property tax payments ranging from $4,518 to $4,776. Various property tax exemptions, such as homestead exemptions for primary residences, and specific relief for seniors or veterans, can offer financial alleviation by reducing the tax bill.

Geographic Variations within Rhode Island

Despite its small size, Rhode Island exhibits significant variations in the cost of living depending on the specific geographic location. Major urban centers and popular coastal towns present higher expenses, particularly for housing, compared to suburban and rural areas. This disparity impacts the financial planning of residents across the state.

Newport, a prominent coastal town, is considerably more expensive than Providence, the state’s capital. Housing costs in Newport have median home sale prices of $1.4 million in July 2025, and average rents ranging from $2,100 to $3,200 per month. Providence offers a more accessible housing market, with median home sale prices around $507,000 and average monthly rents typically between $2,050 and $2,100.

Suburban areas like Warwick offer a more budget-friendly alternative. In Warwick, average one-bedroom rents are around $1,550, and median home sale prices are about $425,000. Communities such as East Greenwich command higher prices, with median home sales around $860,000, despite slightly lower average rents. The state’s smaller towns and inland regions generally provide the most affordable housing options.

Income Considerations for Residents

Understanding the income levels in Rhode Island provides important context for navigating the state’s cost of living. The median household income in Rhode Island was approximately $86,372 in 2023, which is higher than the national median. This figure represents the midpoint of household earnings.

For a comfortable lifestyle, a single adult needs an annual income of $101,338. A family of four with two working adults and two children requires $256,672 annually to maintain a comfortable standard of living.

For basic needs, a single adult in Rhode Island needs to earn $24.36 per hour, which translates to $50,669 per year. For a family of four with two working adults, the living wage per adult is $30.85 per hour, or $123,000 annually for the household. These figures highlight the financial demands placed on residents to cover essential expenses in the state.