Looking to maximize savings? It may be time to head west
(GlobeNewswire) July 7, 2015 – The Midwest produces some of the most savvy consumers in the country, with three states in the region placing in the top five of The Best States for Saving Money and Getting Ahead 2015 from personal finance site GetRichSlowly.org.
South Dakota earned top honors in the study, followed by their neighbors in North Dakota in second, while Illinois came in fifth.
To determine the best states for savers, GetRichSlowly looked at four factors:
- Savings deposits per capita in federally insured banks (Federal Deposit Insurance Corporation)
- Average credit card debt per household (Equifax)
- Highest marginal income tax rate
- Coupons printed per state (Coupons.com)
This methodology also applied to states that make it difficult to save: The worst in our study went to Oregon, followed by Hawaii, which has among the highest cost of living in the United States.
“If the Great Recession taught us anything, it’s to save for a rainy – or even stormy – day. Unfortunately, though, we are no longer a nation of savers. Since 1975, the amount of our income saved to income earned has steadily declined, down to about 5 percent, according to government data. We wanted to find out what was driving this and where families might be bucking this trend,” GetRichSlowly analyst Megan Wells said. “Americans want to save, but taxes and household debt present a real problem in many states.”
Key Takeaways:
- Taxes play a major role in how much someone can save, with three of the Top-10 states collecting no individual state income tax. States like Alaska that don’t compound tax savings with strong savings deposits find themselves towards the bottom of the list.
- Conversely, Missouri cracks the top-10 best states despite an income tax rate higher than the national average, thanks to well-rounded savings metrics.
- Credit debt (or lack thereof) helped boost the profile of several states, with six in the top-10 boasting average household debt balances less than the national average of $5,116.
- South Carolina has an average credit card debt lower than six of the states in the best states’ list, but the fourth worst deposit rate in the country, landing the Palmetto State among the worst states for saving.
- While total coupons printed per state can rely heavily on population size, North Carolinians prove to be extra-savvy clippers, placing sixth in total coupons despite a population rank of ninth.
- Don’t venture too far west for savings. While Nevada placed fourth on the best states for saving list, Oregon, Hawaii, Alaska, Idaho, California and New Mexico all scored in the bottom-10 of the study.
Best States for Saving Money and Getting Ahead
1. South Dakota
2. North Dakota
3. North Carolina
4. Nevada
5. Illinois
6. Texas
7. Utah
8. Pennsylvania
9. Missouri
10. Oklahoma
“So what’s a consumer to do? It’s obviously tough to change your tax rate, but we advocated finding other ways to save, such as getting the best interest rates on your savings deposits, clipping more coupons and, obviously, paying off your credit cards each month and maybe even using them to your advantage with rewards,” added Wells.
Worst States for Saving Money and Getting Ahead
50. Oregon
49. Hawaii
48. Alaska
47. Idaho
46. Vermont
45. Maryland
44. California
42 (tie). New Mexico
42 (tie). South Carolina
41. New Jersey
The full rankings, along with an interactive map, as well as full methodology can be found here.
About GetRichSlowly.org
GetRichSlowly.org is a personal finance blog that has provided readers with a forum for sharing and discussing practical everyday financial strategies andhelpful tools since 2006.GetRichSlowly.org is among Liz Weston’s “Best Money Websites” for 2011 and 2012, has been named "The Most Inspiring Money Blog" by Money magazine and was named oneTime.com’s Best Blogs of 2011.
