Trying to Save Money? You Might Be Living in the Wrong State

Between high rents, expensive gas, and $15 drinks, it can feel near impossible to save in California. Sure, you get used to decimating your savings every weekend. But then you take a trip outside the California bubble, see the prices, and remember that you live in one of the most expensive regions in the world. Relatable? Then it might be time to move to a more affordable state, one where you can actually save some money. Here are the top five best (and worst) states to live in for savers, according to a Forbes analysis.

Note: The cost of living index numbers range from 85-184, and the lower the index, the cheaper the cost of living.

Cheap housing, low income-tax rates, and a manageable cost of living make North Dakota the best state to save money in. As a resident, the most you’d ever pay in income taxes is 2.9%, four times lower than California’s top rate.

It’s no surprise that South Dakota comes in at No. 2, as it shares many of the traits that make its sister state so cheap: low taxes (income isn’t taxed at all) and cheap housing. According to Forbes, the Mount Rushmore State has the lowest percentage of residents who spend at least half their income on rent.

West Virginia is one of the poorest states, with residents earning the lowest median household income in the country. Even then, Forbes argues that living in the Mountain State is great for saving given its cheap housing and low tax rates.

Notice a pattern? It’s easiest to save in states that are cheap (duh). And with its low rents, maximum 5% income tax rate, and low cost of living, the Show-Me State fits into that mold without suffering from West Virginia’s high poverty rates.

While the Buckeye State boasts robust aerospace and medical industries, the state remains relatively cheap, possessing one of the lowest median rents in the country. Ohioans also have low debt-to-income ratios, Forbes reports, which speaks to the state’s affordability.

Moving to Hawaii may seem like a dream — until you see the cost of living. Not only does Hawaii rank as the most expensive state to live in the U.S., but the archipelago also has the highest debt-to-income ratio, according to Forbes. Bottom line: It is the absolute worst state to move to if you’re looking to save money.

California is the polar opposite of a state like North Dakota. Rents are absurd, the income taxes are the highest in the country, and a can of watery beer can cost you upwards of $9. The only silver lining is that salaries remain high, with the average tech worker making $215,130.

Maryland is another state that remains unaffordable despite the average resident’s high income. Unsurprisingly, the problem is the cost of housing, which is compounded by the fact that many Marylanders are renters.

New York is home to the Big Apple, aka the most expensive 302 square miles to rent in the entire U.S. Nearly 30% of the state’s residents spend half their income on rent — not to mention the high cost of food, healthcare, and, well, just about everything else.

If you cross the George Washington Bridge from New York to New Jersey, you might notice that everything is a bit cheaper — but not by much. Like its next-door neighbor, the Garden State will eat away at your savings account with expensive rents. And homeowners aren’t off the hook either, as New Jersey has the highest property tax rate in the country.