Saving money presents significant challenges that vary widely based on the cost of living in different states. Factors such as housing prices, taxes, and the general cost of essential goods and services can substantially impact an individual’s or family’s ability to save.
In states with a higher cost of living, even those with moderate incomes may find it difficult to set aside funds due to the higher expenses associated with daily necessities. These discrepancies highlight the complex interplay between location-specific economic conditions and personal financial strategies.
To better understand how this varies across the country, Scholaroo’s data team analyzed publicly available data on metrics related to the average cost of living and the average income of inhabitants in all 50 states. This analysis aimed to rank the states and identify the best places to save money.
Where is it easiest to save money?
Overall Rank
Methodology
To establish a ranking of the 50 best and worst states in the US for saving money, Scholaroo's data team identified five key metrics related to basic expenses and average income and then analyzed publicly available data, listed below with their corresponding weight. Each metric was rated on a 100-point scale, with a score of 100 being the maximum.
Finally, we determined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.
Personal Debt to Income Ratio: Regular Weight (22.22 points)
The ratio between the average income and personal debts, such as car finance, credit cards, student loans, personal loans, and other debts.
Cost of Living: Regular Weight (22.22 points)
The cost of living considering basic expenses such as loans and credit cards, food, education, health, and much more.
Mortgage: Regular Weight (22.22 points)
The average monthly mortgage.
Effective Income Tax Rate: Half Weight (11.11 points)
The average tax rate divided by the total gross income.
Income Spent on Housing: Regular Weight (22.22 points)
Considering the three-year variation in housing costs, housing costs as a percentage of income, and the percentage of renters who spend at least half their income on rent.