The cost of living is calculated by taking the average cost of living in all the states of the United States. This average is taken as the base and considered as 100. Each state is then assigned an index and this index is compared with this base. An index above 100 indicates that the state is expensive than most states and an index less than 100 indicates otherwise. The cost of living in North Carolina is 90.5. This means that the state is cheaper than most other states.