3 States That Are the Best at Saving Money
Written by
Cameron Diiorio
Edited by
Cory Dudak
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It is well-known that places like California, Florida, and Hawaii — while great places to live — are high-cost-of-living states. These coastal states offer prime real estate, but living in these places may not be helping their inhabitants financially.
“Despite beautiful weather and scenic beaches, Hawaii, California and Florida are the most difficult states in which to save,” said USA Today.
Residents trying to save in these high-cost, high-rent states often struggle to make their income stretch far.
So, if not this oceanside paradise, which states are the best at saving money? A little background on America’s saving habits should shed some light on the situation.
American Saving Habits
According to a recent survey, 46% of Americans had no money put into retirement.
There are many factors that contribute to less than half of Americans not saving up for retirement. One could be a lack of financial education — they may not know how to navigate different retirement plans such as Roth IRAs or 401ks.
Another reason could be that with the recession, leading to heightened rates of inflation, Americans may be struggling to stay afloat and stay on tops of bills.
If many Americans have trouble paying for essentials, how should these citizens put money comfortably toward a retirement fund?
The answer is possibly found in three states, which, according to a poll by TollFreeForwarding.com, are the best at saving money. A low cost of living and a cheap housing market contribute to the ability of people to save in these states.
South Dakota, Missouri, and Kentucky have been regarded as the best states for saving money.
“Although none of these states have particularly high average incomes (none of them rank in the top half of all states), they all makeup for it by providing a low cost of living,” said TollFreeForwarding.com.
A low cost of living and a cheap housing market contribute to the ability of people in these states to save.
Top 3 Saving States
South Dakota
With a low-income tax rate of 4.2%, South Dakotans are saving money with every purchase.
Compared to a state and local average of 8.8% sales tax rate in California, one of the aforementioned high-cost-of-living states, it is no surprise that South Dakota residents can save up and prepare for retirement.
Additionally, low rent costs contribute to the ability to save up money.
“South Dakota has one of the lowest median rent costs in the country, with a median monthly rent of $1,105,” said TollFreeForwarding.com in their survey.
With a low rent and a low sales tax, it is no surprise that South Dakota tops this list.
Missouri
“Missouri also scored highly for median rent, with the average rental property costing $1,235 per month,” said TollFreeForwarding.
A median monthly rent of $1,235 is much cheaper than the exorbitantly high prices in other states. According to Zillow, rent is, on average $2,700 in Hawaii, one of the other costliest places to live in the US.
“Other categories where Missouri scored well include the cost of groceries, childcare costs, gas prices, and the cost of a cup of coffee,” said TollFreeForwarding.com.
Kentucky
Kentucky is the third and final state on this list, and another Southern state that saves well.
“Kentucky also has comparatively low state and local taxes, as well as affordable groceries, childcare, and gas,” TollFreeForwarding said.
According to a survey by the Tax Foundation, the combined sales and local state tax in Kentucky is 6%. Compare this to Florida, whose average combined tax is 7.02%, or California’s 8.85%.
It does not come as a surprise that Kentucky residents can save more, pay less taxes per purchase, and live cheaper.
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