While all fifty states in the US are great, some of them are better for saving money than others. For a variety of reasons, the states have varying costs of living, different opportunities, and just completely unique economic situations. Here are the five best (and five worst) states for saving money.
Best: Iowa
You didn’t think the best states for saving money would be coastal, did you? Unsurprisingly, they’re all Midwest states, they border each other, and they’re mostly farmland. Iowa is a great place for saving money, with extremely affordable housing and a surprisingly great median household income of $76,320. The tax rate is also acceptable, around 5.7%. The local landscape might not be thrilling, but you’ll be thrilled while your savings account fills up.
Worst: California
This isn’t going to win me any awards for economic research, but Californians find it hard to save money. The state has a famously high tax rate, brutally massive cost of living, and few opportunities to save money. It doesn’t help that housing costs in California are absurdly high compared to other nearby states. It turns out that living in a place with perfect weather and access to the coast is pricey! Who knew?
Best: Nebraska
Nebraska, like neighboring Iowa, has a great median household income and a very low sales tax rate. Housing is affordable, job opportunities are plentiful, and you can save substantial amount of money with the right budgeting plan. You just need to be okay with seeing a lot of cornfields when you travel across the state!
Worst: Hawaii
Hawaii is a beautiful island and an awesome place to visit, but the remoteness and massive individual income tax rate are twin pressures on residents’ finances. What’s more, the tourism industry makes homes in the state extremely pricey, coming in much higher than the national average. It’s just very hard to save money in Hawaii. Once again, beautiful locations prove expensive to live in.
Best: North Dakota
You might not find North Dakota’s place on this list to be surprising. After all, it’s got a low population density, plentiful affordable housing, and a stunningly high median household income of $78,000. The top marginal state income tax rate is also much lower than the national average.
Worst: Florida
People initially assume that Florida is a great place for saving money because it has no state income tax. That’s great for retirees (and that’s on purpose) but it’s not enough to offset the tremendously overinflated housing costs and genuinely appalling cost of living for the coastal state. Hey, at least Disneyworld and the beaches are fun!
Best: South Dakota
And, of course, South Dakota also appears on this list alongside its northern neighbor. While the state’s median household income is substantially lower than North Dakota’s, coming in at only $67,000, it has the lowest percentage of cost-burdened housing in the country. Also, like Florida, South Dakota has no income tax. That’s a huge boon for savers!
Worst: Massachusetts
On paper, it would look like Massachusetts is a great place to save money. After all, the median household income is the second highest in the US at $93,000. Still, the tremendous housing costs and cost of living makes it extremely difficult for residents to put anything back into their savings.
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Best: Kansas
Kansas has the third-lowest cost of living in the country and extremely average tax percentages compared to the rest of the US. This, combined with its extremely affordable housing, makes the Midwestern state a great place for people looking to save money! Just make sure you’re comfortable with the idea of wide, open spaces and fields of grain.
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Worst: New Jersey
New Jersey gets a bad rap, and I promise I’m not dog piling here. New Jersey’s housing costs are just enormous compared to the national average, and the marginal individual tax rate is 10.75%. That makes it tough to meaningfully save up any money in the Garden State.
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