Study Ranking: The Easiest and Hardest States to Save Money in 2025
When it comes to growing your savings, your location can make a significant impact. A recent study by Bankrate sheds light on the easiest and hardest states to save money in 2025, considering factors like cost of living, tax rates, employment growth, and interest rates on deposit accounts. If you’re contemplating a move to boost your savings, this guide will help you understand where you might get the best bang for your buck.
Key Takeaways
- Tennessee emerges as the easiest state to save money, benefiting from low taxes and a favorable cost of living.
- Hawaii ranks as the hardest state to save money, weighed down by high living costs and a declining employment rate.
- States from the South and Midwest are more conducive to saving, while Northeastern and Western states generally present a tougher economic environment for savers.
The Easiest States to Save Money
Overview of the Top 5 Easiest States
The five states where saving money is most achievable share key characteristics:
- Lower-than-average tax rates
- Affordable living expenses
- Stable employment growth
Residents in these states are more likely to have disposable income to put towards savings, thanks to favorable economic conditions. Here’s a closer look at the top five.
| Easiest States to Save Money | Ranking |
|---|---|
| 1. Tennessee | 1 |
| 2. Missouri | 2 |
| 3. Texas | 3 |
| 4. Oklahoma | 4 |
| 5. Florida | 5 |
1. Tennessee
Tennessee steals the spotlight as the best state for money savers. With an average combined tax rate of just 7.6%, it allows residents to keep more of their earnings. Notably, Tennessee has experienced 6.2% growth in nonfarm employment over the last five years, indicating robust job prospects.
2. Missouri
Coming in a close second, Missouri combines a low cost of living with a 9.3% tax burden. The state ranks particularly well in the local economy category, scoring an eighth place with competitive interest rates of 1.6% APY on MMAs.
3. Texas
With zero state income tax, Texas offers a saving-friendly environment. The state provides stable job opportunities, boasting a 10.8% increase in employment. However, while it has many positives, its deposit account yields rank lower among the top five.
4. Oklahoma
Fourth on the list, Oklahoma shines with an affordable cost of living. Although the tax rate stands at 9%, it ranks high for its average MMA rate of 1.7% APY, offering good returns for savers.
5. Florida
Florida rounds out the top five, supported by a 10.5% increase in employment since 2019. Its cost of living, though higher than midwestern states, is offset by robust job growth and an increase in household incomes.
The Hardest States to Save Money
Overview of the Bottom 5 Hardest States
In stark contrast, the following five states represent the struggles of savers, burdened by high living costs and taxes.
| Hardest States to Save Money | Ranking |
|---|---|
| 50. Hawaii | 50 |
| 49. Connecticut | 49 |
| 48. Vermont | 48 |
| 47. California | 47 |
| 46. New Jersey | 46 |
1. Hawaii
Hawaii, while often a dream destination, ranks as the least favorable state for savers. The highest cost of living paired with an employment rate decline of 2.3% makes it a challenging environment for anyone looking to set aside funds.
2. Connecticut
Occupying the second spot, Connecticut suffers from a considerable tax burden of 15.4%. It has also reported sluggish job growth, affecting residents’ ability to save effectively.
3. Vermont
Vermont’s high taxes and weakened job market—showcasing a 0.5% employment decline— leave residents in a tough position. It ranks poorly in both the job growth and interest rate categories.
4. California
Despite its glamorous reputation, California holds the fourth position in terms of difficulty saving. With its high tax burden (13.5%) and one of the highest living costs, budget-conscious individuals often find it hard to keep money in their savings.
5. New Jersey
New Jersey combines high taxes (13.2%) with stiff living expenses, securing its spot as the fifth hardest state to save money. Its interest rates for deposit accounts are only slightly better than some of the other difficult states.
How Each State Stacks Up
Below is a comprehensive comparison of the two extremes regarding interest rates, taxes, and local economies.
| State and Overall Rank | CD & MMA Interest Rates | Taxes | Local Economy |
|---|---|---|---|
| 1. Tennessee | 14 | 3 | 10 |
| 2. Missouri | 6 | 13 | 8 |
| 3. Texas | 28 | 5 | 2 |
| 4. Oklahoma | 13 | 10 | 12 |
| 5. Florida | 5 | 11 | 21 |
| 50. Hawaii | 50 | 48 | 50 |
| 49. Connecticut | 37 | 49 | 43 |
| 48. Vermont | 48 | 47 | 22 |
| 47. California | 3 | 46 | 49 |
| 46. New Jersey | 29 | 45 | 44 |
Bottom Line
Your geographical location greatly influences your financial well-being. States like Tennessee, Missouri, and Texas provide a supportive environment for savings through favorable tax structures and job growth. Conversely, if you’re situated in Hawaii, California, or Connecticut, the combined weight of high costs and taxes could stifle your saving efforts.
In pursuit of your financial goals, consider not just the economic landscape of your state, but also explore your options for increased savings through high-yield accounts and opportunities to manage living expenses. If a move isn’t feasible, focus on improving your income or reducing your outgoings—these changes could still significantly impact your ability to save effectively.
For further information on maximizing savings and creating a budget, check out these resources for more tips on navigating personal finances today!
