4 Best States To Grow Your Savings To $50,000 on an Average Salary
When it comes to growing savings on a typical income, your ZIP code is pivotal. Experience the harsh reality of high-tax, high-cost areas siphoning funds before they even hit your bank account? Well, say goodbye to those savings-draining locations and hello to the personal finance-friendly promised lands ripe for stashing away cash.
GOBankingRates tapped money experts to reveal the regions that’ll have your net worth blossoming in no time — even if your salary is nothing to write home about. From no-income tax paradises to affordable Midwestern meccas, get ready to map your course toward $50,000 in the bank and early retirement bliss.
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The Lone Star Savings Paradise
“I may be a little biased, but Texas, with its zero state income tax, allows more of your hard-earned money to go into savings rather than taxes,” said Taylor Kovar, CFP and CEO of 11 Financial. And that’s just the start of the Lone Star State’s savers’ spoils.
“The state’s economy is particularly strong backed by technology and energy, which helps safeguard against economic fluctuations,” Kovar continued. “Additionally, the cost of housing generally sits below the national average, which makes it easier to manage expenses and save.”
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The Not-So-Humid Path To Making Bank in Florida
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“Florida is more than just beautiful beaches and a cartoon mouse; it’s a powerhouse for growth, especially in international trade and tourism,” Kovar said. “The lack of state income tax is a significant perk, and with one of the fastest-growing populations in the country, the job market is constantly expanding.”
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Rugged Good Looks AND Money in the Bank? Wyoming Delivers
Sure, Wyoming is a scenic masterpiece carved by Mother Nature herself. But Kovar insists the state delivers far more than just beautiful vistas. “In Wyoming, the scenic views are matched by financial benefits like no state income tax and low property taxes, thanks to its low population density and efficient use of resources.”
This diamond in the rough also packs serious economic might for its size. “The state’s economy is surprisingly strong, with a high GDP per capita driven by the mining and extraction industries,” Kovar added.
The Midwestern Money Machine
While the trio of no-income tax hotbeds offer plenty of appeal, budgeting expert Todd Stearn of The Money Manual has his sights set on America’s heartland as the prime region for mega-savers.
“According to a recent analysis from Forbes Advisor, the Midwest is the place to be if you’re looking to maximize your savings. That’s because they found that 8 of the 10 best states for saving money can be found there,” Stearn said.
More specifically, Stearn points to the Dakotas as the leaders of the pack. “North Dakota wrapped up last year with the nation’s third-lowest debt-to-income ratio, while South Dakota had the 11th lowest. Meanwhile, both North and South Dakota’s residents spent on average less than 15% of their income on what is for most people their biggest expense: housing.”
You Don’t Necessarily Need To Move To Save Money
Of course, not everyone can just get up and go for greener savings pastures. If relocating isn’t in the cards, Stearn insists you can still improve your situation locally.
“If you want to save money by moving to a more affordable state, look at all the states that rank well for things like debt-to-income ratio and percent of income spent on housing,” he advised. “Also look at how you can move the needle on these items in your own life. For example, could you downsize your home and spend a lower percentage of your income on housing? That could give your savings a huge boost without necessarily leaving the state.”
Additionally, Stearn recommends getting a tighter grip on debt obligations, which can quickly sabotage any savings efforts. “Set a budget if you haven’t, looking for ways to pay off your debts and take on less debt to improve your debt-to-income ratio. Budgeting apps like Rocket Money and Simplifi can help.”
From the prime income tax-free zones to the surprisingly affordable Midwest corridor, countless locations across the nation are ripe for accelerating your $50K savings goals. With smart decisions on where to live, how to manage housing costs and a plan for dismantling debt, achieving a comfortable nest egg is entirely possible, even on an average income. The path to wealth might just start with examining your area code.
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