Your Salary Will Stretch The Furthest in These Key States, Study Finds

See where life is a little easier if you're not wealthy.

Struggling to make ends meet on a low salary can be as frustrating as it is difficult. In fact, without the money to build an emergency fund, a good place to buy necessities on the cheap or the option to buy a decent house, you might find yourself spending more money on basic costs than your wealthier counterparts. Where you’re living can play a big role in your ability to stretch your budget to fit your life.

So, the residents of Pennsylvania, West Virginia and Vermont who are in the lowest-income groups have an easier time, on average, than people on low salaries in Hawaii, Oregon or Colorado. At least, that’s what the results of a recent study from GOBankingRates indicate.

 

 

 

 

The GOBankingRates study examined eight different data pieces relevant to working-class and lower-income residents, scoring all 50 states in each category. Those scores were then combined to form a cumulative ranking. The factors in the study include: median list price for homes, the average monthly mortgage bill, cost of living, state income taxes on incomes below the national median, the income for people in the bottom 20 percent of earners, the state’s per capita spending on public welfare, property crime rates and the average ACT score for the state.

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All told, the study’s results provide an overview of how the local economy, public education system and state government all combine together to create an environment for the less financially fortunate.

Don’t Miss: Best and Worst States for the Middle Class

Here’s a look at all 50 states and how they ranked:

Rank State Median List Price Estimated Monthly Mortgage Cost-of-Living Index 20th Percentile Household Income Individual State Income Tax Percentage Expenditure per Capita, Public Welfare Property Crime per 100,000 People Avg. ACT Score
1 Pennsylvania $198,900 $971 102 $21,771 3.07 $2,094.19 1,742.7 23.1
2 West Virginia $150,000 $750 95.9 $16,726 4.00 $2,379.23 2,047.2 20.7
3 Vermont $250,000 $1,215 120.7 $23,122 3.55 $2,764.72 1,697.4 23.4
4 Ohio $154,900 $772 92.3 $20,122 2.969 $1,729.65 2,577.5 22.0
5 New Hampshire $289,900 $1,394 115 $28,412 0.00 $1,622.80 1,512.9 24.5
6 Kentucky $175,000 $869 93.7 $17,020 5.80 $2,450.51 2,189.7 20.0
7 Indiana $170,000 $841 91.1 $21,094 3.23 $1,741.80 2,589.4 22.3
8 Iowa $179,900 $890 91.3 $22,713 6.12 $1,980.30 2,086.0 22.1
9 Maine $229,900 $1,123 113.6 $20,636 5.80 $2,223.60 1,645.7 23.6
10 Michigan $169,500 $837 89.7 $20,186 4.25 $1,650.42 1,909.9 20.3
11 Rhode Island $290,000 $1,379 123.6 $21,459 3.75 $2,475.52 1,898.7 23.3
12 South Dakota $228,250 $1,097 99.5 $21,860 0.00 $1,223.62 1,980.6 21.9
13 Arkansas $165,000 $820 87.8 $16,996 4.50 $2,236.80 3,268.6 20.2
14 North Dakota $229,000 $1,113 99.7 $23,066 1.10 $1,848.72 2,295.9 20.3
15 Wisconsin $199,900 $978 96.2 $22,830 6.27 $2,078.27 1,933.3 20.5
16 New Jersey $299,000 $1,424 121.9 $28,266 1.75 $1,940.30 1,544.6 23.1
17 Delaware $279,990 $1,338 102.9 $26,178 5.55 $2,452.04 2,766.0 23.6
18 Minnesota $265,900 $1,282 99.7 $25,575 7.05 $2,569.86 2,133.3 21.1
19 Wyoming $240,000 $1,169 95.6 $25,432 0.00 $1,386.50 1,957.3 20.0
20 Tennessee $229,900 $1,124 89.8 $18,425 0.00 $1,621.02 2,854.1 19.9
21 New York $384,900 $1,845 132.5 $21,792 6.45 $3,109.95 1,545.6 23.9
22 Kansas $175,000 $865 90.2 $22,635 4.90 $1,383.12 2,695.5 21.9
23 Mississippi $175,500 $872 85.1 $15,356 5.00 $1,955.89 2,768.1 18.4
24 New Mexico $219,000 $1,063 94.9 $18,149 4.90 $2,750.88 3,937.1 19.9
25 Connecticut $315,000 $1,499 125.7 $27,383 5.00 $2,073.45 1,808.0 24.5
26 Nebraska $205,000 $1,003 92.9 $22,865 5.01 $1,421.83 2,263.3 21.4
27 Illinois $224,900 $1,094 97.2 $23,045 4.95 $1,633.74 2,049.0 20.8
28 Massachusetts $429,900 $2,013 132.9 $24,887 5.10 $2,739.49 1,561.1 24.8
29 Oklahoma $179,900 $894 89.2 $19,341 5.00 $1,659.42 2,982.9 20.4
30 Texas $273,990 $1,315 91.2 $21,523 0.00 $1,289.67 2,759.8 20.6
31 Alaska $278,000 $1,345 131.3 $31,700 0.00 $2,726.14 3,353.0 20.0
32 Idaho $289,900 $1,397 92.2 $21,181 7.40 $1,413.38 1,744.2 22.7
33 Virginia $299,900 $1,431 102.2 $26,783 5.75 $1,375.17 1,859.4 23.3
34 Missouri $170,000 $845 89.9 $20,236 6.00 $1,404.19 2,799.1 20.2
35 Louisiana $205,000 $1,005 94.4 $17,171 4.00 $1,772.75 3,297.7 19.5
36 Florida $289,000 $1,386 99.3 $20,330 0.00 $1,341.17 2,686.8 19.9
37 Maryland $300,000 $1,432 128.7 $31,285 4.75 $2,049.53 2,284.5 23.0
38 Alabama $194,500 $966 90.3 $17,087 5.00 $1,392.89 2,947.8 19.1
39 Arizona $275,000 $1,319 95.6 $21,401 2.88 $1,495.37 2,978.4 20.1
40 Washington $369,900 $1,743 107.1 $25,461 0.00 $1,630.47 3,494.1 23.1
41 Nevada $299,900 $1,440 104.7 $23,456 0.00 $1,384.81 2,586.6 17.7
42 Georgia $248,000 $1,207 90.8 $19,825 6.00 $1,176.72 3,004.5 21.1
43 North Carolina $259,000 $1,245 94.6 $19,418 5.499 $1,368.24 2,737.5 19.1
44 Montana $311,700 $1,500 100.4 $20,092 6.90 $1,522.32 2,683.5 20.3
45 California $515,000 $2,410 141 $24,516 4.00 $2,637.40 2,553.0 22.6
46 South Carolina $242,995 $1,177 99.5 $18,233 7.00 $1,499.88 3,243.8 18.5
47 Utah $349,000 $1,661 95.7 $26,970 5.00 $1,135.41 2,951.5 20.2
48 Colorado $416,050 $1,958 102.3 $25,002 4.63 $1,438.63 2,740.7 20.6
49 Oregon $365,000 $1,729 129.3 $21,196 9.00 $2,375.76 2,964.4 21.7
50 Hawaii $599,000 $2,801 188.3 $28,952 7.60 $1,769.16 2,992.7 18.7

Did You Know? These 19 Metro Areas Have the Biggest Wealth Gaps, Study Finds

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The scores of two states in the middle of the pack are also interesting. Overall, Massachusetts ranks No. 28 and New York ranks No. 21, but both states finished among the top or bottom five in almost every category. However, New York has the seventh-highest state income tax rates on lower incomes while Massachusetts places lower. Aside from that, both states feature very high home prices, cost of living and per capita spending on public welfare, as well as low property crime rates. 

The study also revealed some interesting trends. For example, there’s a perfect correlation between cost of living and the income levels for the bottom fifth of earners, with the states ranking identically for those two categories. On the one hand, it shouldn’t come as a shock that the cost of goods is driven — at least in part — by what people in the area can afford. Still, it’s a little surprising that results are consistent across the board.

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Click through to see the best and worst states to be rich in America.

More on the Economy: 

Methodology: GOBankingRates determined the best and worst states to be in the lower-income tax bracket by using eight different factors and scoring them in order to reach a cumulative ranking from 1-50 for each state. The factors used were: 1) monthly mortgage, 2) median home list price, 3) cost of living, 4) individual state income tax percentage for those earning less than the national median income, 5) income for people in the bottom 20 percent of earners, 6) state spending per capita on public welfare, 7) property crime rate per 100,000 people and 8) average ACT score.

About the Author

Joel Anderson

Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.

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Your Salary Will Stretch The Furthest in These Key States, Study Finds
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