Who wouldn’t want to live in Hawaii? Made up of a chain of islands with an ocean coastline of about 750 miles, Hawaii fulfills every person’s dream of relaxing under the palm trees on a tropical oasis. However, Hawaii has been classified as the worst state to make a living.
Residents also pay the most state taxes in the country. The cost of living is high in the entire state. Honolulu, the capital, has the highest cost of living; however, on the bright side, it is nearly 7% lower than the price of living in New York City.
Because many goods must be imported from the mainland, the cost of living is astronomical. The average monthly expenditure for a single person in Honolulu, for example, is over $3,000, making it more expensive than 90% of the cities in the United States and more than 94% of the cities in the world.
Electricity costs are also exceptionally high. The average price of electricity is twice as expensive per kilowatt-hour as Alaska, the next costliest state, making it more than three times the national average.
If these figures haven’t deterred you and you still want to create a life full of sun, sand, and warm tropical breezes, continue reading as we discuss how to live in Hawaii for cheap. It might not be as easy to live inexpensively, but with careful management, it can be done.
Choose Your Island Paradise Wisely
Hawaii is made up of a chain of islands. The eight largest islands range from unpopulated to bustling international tourist destinations. The cost and amenities, or lack of facilities, on each island vary, so it is crucial to choose your ideal Hawaiian destination wisely.
Tourist areas are much more expensive than remote villages. However, you may not be up to living in a shack on the side of a volcanic crater or deep in the jungle just to cut back on expenses. Let’s look at the eight islands to see what conditions are like.
Niʻihau
Niʻihau is the seventh-largest inhabited island and is known as The Forbidden Isle. There are still a few tours and hunting safaris available by appointment only. It has a population under 200 and is mostly off-limits to anyone who is not a member of the Robinson family that owns the island or US Navy personnel.
However, if you can find a way to take up residence on the island, there are some advantages. Residents live rent-free and are provided with free meat. Solar power provides all the electricity on the island while water comes from a system of rainwater catchment, saving you bundles on utilities.
On the other hand, there is no telephone service, nor are there any paved roads. Horses and bicycles are the primary forms of transportation. There is also no plumbing to speak of. Groceries are delivered via barges from Kauaʻi, so no quick trips to Walmart for you.
Kauaʻi
Kauaʻi is the oldest geologically and fourth-largest island in Hawaii. It has a total population of about 68,000. Kapaʻa is the largest town on the island, and Līhuʻe the second largest. Princeville is another notable town. Tourism is the primary income industry on the island. It is also the home of the Pacific Missile Range Facility Barking Sands.
Līhuʻe Airport is the only commercial airport on the island. The island has a bus service that operates nine local bus routes. Kukui Grove Center, an open-air shopping center, is also in Līhuʻe along with several movie theaters, restaurants, and car dealerships.
So life on Kauaʻi has many modern advantages, but because it is a tourist attraction, it won’t be the cheapest place to live in Hawaii.
Oʻahu
The third-largest island is Oʻahu and has over one million people living on it. The island relies heavily on tourism and shopping. The island has many lovely beaches as well as cultural and historical attractions, including Pearl Harbor.
The state capital is Honolulu, which has been rated the twenty-second most liveable city in the world and the second safest city in the United States. Honolulu is a major center for military defense and international business.
Although not inexpensive, the island, and especially Honolulu, has a stable economy making it more feasible for many to live there.
Molokaʻi
Molokaʻi is the fifth most populated island in Hawaii. It has a small tourism economy. Most residents earn an income from ranching, pineapple, and sugarcane production and small farms. This island has the highest unemployment rate in Hawaii.
Believed to be the birthplace of the Hula, the Molokaʻi Ka Hula Piko festival is celebrated there annually. There are several protected areas and parks, but most do not have restroom facilities, service staff, or potable water. You’ll need to take a plane to get to Molokaʻi. Maui Economic Opportunity has public bus service on the island.
Molokaʻi provides a more agrarian lifestyle, which may be too rustic for many who wish to move to Hawaii. However, if your dream is to live close to nature in a beautiful land, then just maybe Molokaʻi is the place for you.
Lānaʻi
The smallest publicly accessible inhabited island is Lānaʻi, known as Pineapple island. The only notable town is Lānaʻi City, which has a population of about 3,000 inhabitants. Tourism, primarily golf-related, has been the mainstay of the island’s income recently.
There are no traffic lights and no shopping malls on the island. The resorts supply public transportation. Many of the island’s landmarks are accessible only by dirt roads that require a four-wheel-drive vehicle. Access to the island is provided by ferry.
Off-road vehicles and bicycles can be rented. Most attractions that are not at the resorts or in the town of Lānaʻi City are only accessible by ATV. There are three golf courses on Lānaʻi, The Experience at Koele, The Cavendish, and The Challenge at Manele. The Cavendish is a free, nine-hole public golf course.
If you envision your life made up of golf and resort living, then Pineapple Island might be ok. Otherwise, it is sparsely populated and difficult to traverse.
Kahoʻolawe
Kahoʻolawe is the smallest of the eight islands and has no permanent residents at this time. There is a lack of fresh water, which makes inhabitation difficult. Currently, Kahoʻolawe can only be used for native Hawaiian spiritual and cultural activities.
Maui
Maui is the second-largest island and has the third-highest population with approximately 150,000 residents. The retail, financial, and commercial center is the city of Kahului. The airport is also located in this city, although the city is not generally considered a tourist destination.
The Air Force Maui Optical and Supercomputing observatory and The Haleakala Observatory are both located on Maui. There are three airports on the island, making it more accessible by plane than many of the other islands. Travel around the island is provided by the Maui Bus and is relatively inexpensive. The city of Lahaina is a popular cruise ship destination, making it one of the most expensive places to live in the state.
The island is popular with retirees and tourists. However, the rapid population growth has put a strain on the island’s resources leading to housing shortages, traffic congestion, and limited access to potable water. Outside of the tourist areas, Maui’s living expenses are high but not impossible.
Hawaiʻi
Hawaiʻi is known as the Big Island or Hawai’i Island and is the largest island in the state. It has an approximate population of less than 200,000. The largest city is Hilo. Hawai’i has both dormant and active volcanoes. When an eruption occurs, vog (volcanic fog) covers the entire island, which is a hazard to human, plant, and animal health.
Hawaiʻi’s economy is grounded in tourism. It has been making strides in sustainable tourism, as evidenced by the Hawaii Ocean Science and Technology Park in Kailua Kona. Car rental, taxi service, and island-wide bus service are available. There are also two commercial airports and several commercial ports.
Hawaiʻi is not as affordable as some of the other islands. On the other hand, it is the central hub of the state.
How to Live Frugally in Hawaii
Now that you have a general idea of what to expect on each of the eight islands, let’s look at how to live in Hawaii for cheap in more detail.
Be Aware of Steep Housing Costs
Unless you are ok with living in a shack with no running water or electricity in the jungle, expect to pay more than you would like for a place to live in Hawaii. The island of Oʻahu is somewhat less expensive to live on than the other islands, as long as you aren’t in the capital Honolulu where the average rent is $2,257 a month.
Some experts propose Kaneohe as the cheapest city on Oʻahu island, followed by Kailua, where rent is often less than $1,784 per month. Honolulu isn’t cheap, but the availability of work in the city makes it doable. The next least expensive place to live according to the medium income and home value is Kahului on Maui. Also, consider Hilo on Hawai’i Island for affordable living.
Even in these more economical locations, you’ll still probably need to downsize your housing expectations. Look for a studio or one-bedroom apartment. You may also consider a room to rent in a larger apartment or house so that the utilities and rent can be shared among several roommates.
House sitting is an often overlooked housing option for Hawaii. When you are a house sitter, you are in charge of someone’s house for a certain period while they are away. You may be asked to take care of the owner’s pets, water the plants, maintain the pool and lawn, keep trespassers away, and readdress the mail.
In return, you can stay in the home rent-free, although the owner may request you pay for utilities and internet service while you are there. Many make a lifestyle of house sitting, moving from island to island as vacancies come up. This mobile life allows you to enjoy different localities cheaply.
Budget Your Food Costs
Eating out is relatively expensive in most parts of the state. If you must go out, do so for breakfast or lunch, avoiding the higher-priced dinner menu altogether. Stay away from touristy areas. Instead, choose places that the local residents frequent to save some cash.
Save even more by preparing your meals at home. Shop at the local farmer’s markets. Choose local Hawaiian fruits and vegetables when they are in season. Your in-season selection might be limited, but the price will be better.
On the other hand, there is a wide variety of delicious food that is grown in Hawaii. Look for locally sourced pineapples, sugarcane, macadamia nuts, and coffee. Additionally, Hawaii produces avocados, bananas, guavas, papayas, and tomatoes as well as beans, corn, lettuce, potatoes, and taro.
Being an island state means there plenty of seafood options for a reasonable price. The islands also have a thriving production of beef cattle, dairy, eggs, and pigs, so you won’t have to be vegetarian to live on a budget in Hawaii.
If you live in an area where there are large discount stores like Costco or Sam’s Club, making monthly trips and stocking up might be less expensive than buying your groceries by the week. Bear in mind that in many instances, you’ll have to factor in the cost of transportation too.
Find a Way to Lower Transportation Costs
Travel like the locals and save! Public transportation on the islands is typically very affordable. Most islands have bus service that will get you where you need to go for about $2 a trip. Walking or cycling are two other affordable ways to get around. About 6.5% of the population of Honolulu walk to work daily.
If you don’t want to invest in your own bicycle, you can rent one for as little as $10 a week. Motorcycles and mopeds can also be rented at a daily or weekly rate, or you can pick up your own from an ad on Craigslist. Keep in mind that gas is costly in Hawaii too. The average price for a gallon of gas in Honolulu is $3.42 in 2020 compared to the national average of $2.62.
The most expensive form of land travel is by taxi, and even that’s not available in all areas. Taxis charge between $2.50 and $3 per mile. A long trip can get pretty pricey. A journey between cities or attractions could cost you up to $70.
Traveling between islands can be a bit of a problem. There is one ferry that travels between Maui and Lānaʻi. A ferry ticket costs $30 each way. Most island hopping is done by plane. The majority of the flights are less than an hour and can cost anywhere between $50 and $250 round-trip.
Because of the prohibitive cost of regular inter-island travel, it is cheaper to choose the island that meets your housing, work, and entertainment needs rather than be forced to switch islands regularly.
Get Yourself Some Employment
As we mentioned earlier, some areas of Hawaii have a very high unemployment rate. Hawaii is one of the 16 states in the US with a higher than average poverty rate.
One of the reasons is the lack of workplace diversity. Approximately 90% of the state’s gross income is related to service and tourism. Areas that don’t have tourist attractions have severely limited occupational opportunities.
Even if you have a stable job, wages are lower in Hawaii than in most other states. With the higher cost of living, it may be a struggle to make ends meet. If you can work online, you may be able to command a higher wage and live more comfortably. Additionally, working from home means you’ll save on daily commuting costs too.
Pay Your Taxes (or Not)
Local taxes can be variable but overall are very favorable for living on the cheap. Hawaii’s average property tax rate is just 0.27%. On the other hand, income taxes range from 1.4% to 11%, which is one of the highest in the country.
Hawaii is generally a great place to retire as it pertains to taxes. Social security retirement benefits and public pension incomes are exempt from state taxes, while private pensions and retirement savings accounts are fully taxed. The state also has an estate tax, but don’t worry so much about that. It only applies to those who own property that is valued at more than $5.49 million.
Reduce Electricity Expenditures
Hawaii has the highest electricity costs in the country. Local residents are conscious of this and have learned to manage their electrical consumption. If you are moving from an area where you didn’t need to monitor your electricity, you might be in for quite an adjustment period.
It’s not unheard of to live in the countryside without any electricity in Hawaii. If the primitive life isn’t for you, here are some energy-saving tips you can implement instead.
Even though Hawaii is a chain of tropical islands, you may need to go without an air conditioner. Fortunately, regular warm breezes crisscross the islands, keeping the temperature from getting out of control. If you must use an electrical device to cool down, invest in a small fan.
Closing the blinds will help keep intense sun rays from heating your apartment in the afternoon. A quick shower or some Hawaiin shave ice will lower your body temperature in a jiffy. Of course, learning to dress like the locals will also help. Shorts, loose, brightly colored shirts and sandals are cooler than sweaters and jeans.
Unplug your appliances and devices when not in use. Up to around 75 percent of the energy used by our appliances is drawn when they are off. So unplug microwaves, computers, fans, and chargers and save big.
Take advantage of the warm weather in Hawaii, and line dry your clothes instead of using a dryer. A typical dryer uses between 1800 and 5000 watts of energy. Since Hawaii electricity averages $0.24 kilowatt-hour, not using a dryer can save you substantially.
Your fridge is another appliance that merits your attention. Depending on the type you have, your refrigerator can use between 201 kWh to 500 kWh per year. Reduce the amount of energy needed to keep the interior temperature cold by stocking your fridge to the hilt. Another way to increase energy efficiency is to check and clean the coils every three months.
Switch out your bulbs for LED or energy-efficient lights. LED lights can lower your lighting energy consumption by up to 90 percent. Remember to turn off the lights when you leave the room, and if you can see without them, don’t even turn them on.
Your electric water heater may also be costing you dearly. It is estimated that an average water heater uses over 1,000 kWh of electricity each year. If you can’t abide a cold shower, then at least lower the temperature of the water heater to save money. Use only cold water for laundry as well.
If you like to sit out back in the evenings and enjoy the breeze, consider using solar lights instead of the traditional porch light. Solar motion detector lights over the doorways are another money-saving option.
Take Advantage of Free and Low-Cost Entertainment
Your low-cost entertainment options are dependent on the island that you are living on. Each of the islands have several free beaches to enjoy. Hiking and biking in the national parks are other low-cost or free activities to experience. Local festivals are fun and occur at regular intervals.
On Oʻahu, the Pearl Harbor National Memorial and the National Memorial Cemetery of the Pacific are free to visit. The Koko Crater Trail and Makapu’u Point Lighthouse Trail are free to hike. Waikiki Beach, Lanikai Beach, Kailua Beach, and Manoa Falls are lovely, free places to enjoy some sun and water.
If you are living on Lānaʻi, then you can enjoy the sands of Hulopoe Bay and Polihua Beach. You also might hike through Keahiakawelo, the desolate “Garden of the Gods,” or drive along the Munro Trail. The Lānaʻi Culture and Heritage Center, Lānaʻi Cat Sanctuary, and the Mike Carroll Art Gallery are also available with free admission.
On Hawai’i island, you can see molten lava at the Kalapana Lava Viewing Area and the Lava Tree State Park, or you can scale Mauna Kea, a dormant volcano. The Mokupapapa Discovery Center is a UNESCO World Heritage site with free admission from Tuesday to Saturday.
On Kauai, you can enjoy nature at the Wailua River State Park and the Waimea Canyon. The Spouting Horn is a spout of 50-foot spray formed by a natural lava tube. Take a tour of Kauaʻi Coffee Company or visit the Kilauea Lighthouse while you are on this island.
On Maui, the Keanae Arboretum is worth your time, as is the Banyan Tree in Lahaina. The Dragon’s Teeth lava formation and the Ali’i Kula Lavender Museum are also free for viewing.
Even Molokaʻi has numerous free and inexpensive activities. You can visit Hawaii’s oldest settlement in Halawa Valley or the former leper colony at Kalaupapa. Enjoy nightly live music at Hotel Molokai or send a coconut to your friends and family in Ho’olehua.
Recap
Choosing the least expensive island for your needs is of primary importance. While transportation on each isle is reasonable, airfare between the islands can get mighty expensive. So if your primary purpose is to surf off the coast of Maui, find a place to live on that island rather than the less expensive island of Oʻahu. You’ll save more in the long run.
Eating like the locals will save you some money. Choose restaurants that serve local fare and cook at home using fresh in-season produce and fish. If you must travel, walking, biking or taking the bus are the least expensive transportation options.
Working from home will save you on a daily commute cost. If you have reached retirement age and are living off social security or public pension retirement funds, you’ll get to enjoy more of that money since Hawaii won’t tax them.
Electricity is costly in Hawaii. Practice energy conservation and find ways to reduce your electricity consumption. Use a fan rather than an air conditioner. Consider adding solar lights to illuminate your world. Line dry your clothes and take cooler showers.
Your entertainment does not have to cost an arm and a leg. If you have your own gear, scuba diving and surfing locations are readily available. Taking the sun at the beach or hiking in one of the many national parks are other free activities.
Living in Hawaii might just be the experience of a lifetime and doesn’t have to end with you living in a tent on the beach. With careful money management, along with realistic expectations, you can live out your days, months, and years in the tropical paradise that Hawaii promises.