New York Is the Second-Worst State at Saving Money

Why are New Yorkers so terrible with money?

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The Best States for Money Savers

A study by TollFreeForwarding ranked all 50 U.S. states based on a resident's ability to stash away money for a rainy day. This study was inspired by the exploding cost of living due to inflation, supply chain issues, and maybe a dash of corporate greed.

The study explained:

To obtain our rankings, we looked at ten factors: average income, median rent, utility costs, median home price,  state and local sales taxes, tax burdens, cost of groceries, childcare costs, gas prices, and the average cost for a cup of coffee. For each category, states were able to earn up to 10 points for a maximum of 100.  

South Dakota came in as the best state for saving money, with a score of 73.6 out of 100. Rounding out the top five, in respective order, were Missouri, Kentucky, North Dakota, and Oklahoma.

For those wondering where New York fell on the list, you would have to scroll all the way to the bottom to find the Empire State one spot above last-place finisher, California.

New York scored an overall 27.3 out of 100 while California scored a 25.4.

Why Can't New Yorkers Save Money?

New York may be one of the richest states in the nation, but it is also one of the most expensive when it comes to costs relating to necessities like food and energy. The state also habitually comes in the top 5 most expensive states for homeowners, whether it be home prices or costs associated with maintaining a house.

Interestingly, it seemed the Empire State lost points because of one particular city that is also one of the nation's most populated.

TollFreeForwarding added:

New York City is one of the most expensive cities in the entire U.S., driving New York to the bottom of the list. In addition to high rent ($2,639) and home prices ($531,000), New York scored poorly in the following categories: state and local taxes, cost of groceries, and cost of childcare.  

Expert Todd Stearn, founder and CEO of The Money Manual, said that Americans in states like New York are paying more to keep a roof over their head and the IRS off their back.

Said Stearn:

The best states to save money are going to typically be those with the lowest cost of owning or renting your home, as this is the biggest expense for most people. Another major expense is tax. States like New York, California, Hawaii, Vermont, and New Jersey have some of the highest taxes in the country, making it harder to save money.

In short: Blame NYC and taxes for why New York is such a difficult state to grow your nest egg.

How Much Money Should Americans Have in Savings?

GoBankingRates recently released a report about how much money the average American should have stashed in a safe spot.

It's been widely advised that working Americans should have 6 to 12 months of living expenses, costs that pay for items like utilities, gas and groceries, stashed away into a savings account. They provided an example, saying if living expenses cost around $3,000, then "you'll need to have at least $18,000 tucked away in your savings."

It was also found that just 7 percent of Americans between the ages of 18 and 24 have at least $10,000 in reserves. Additionally, only 20 percent of those between the ages of 55 and 64 have that same amount of money in a rainy day fund.

However, saving money can only be done if you have surplus cash at the end of the month. With the cost of everything going up, more and more Americans are living from paycheck to paycheck, which is leaving even less surplus money to be put aside.

That said, if you want to start seriously saving up some cash, move to South Dakota. It's #1 for a reason.