Best US Cities for Saving Money

Americans know they need to save more. Nearly half of taxpayers who expect to get a tax refund want to save the money for a rainy day, 90% of younger millennials are saving money, and then there’s the fact that many Americans, even highly compensated physicians, are facing a retirement savings shortfall.

Unfortunately, saving money in a bank doesn’t offer much return these days. The average savings account rate is just 0.11% APY, according to GOBankingRates.com. However, some cities are kinder to savers.

“Even the most frugal family will struggle to grow a savings fund if they can’t get a decent job, earn a sufficient income or afford to pay taxes,” said Casey Bond of GOBankingRates. “These rankings show that if Americans want to stop living paycheck-to-paycheck and start saving money, they might have to move to a city with greater opportunity.”

GOBankingRates ranked the top 100 largest cities to see which ones offered the best opportunity to grow savings. These cities reported higher yields, more jobs with higher incomes and less expensive homes.

While New Orleans, Birmingham and New York actually boasted the highest average rates among the 100 cities examined, they fell further down the list (31, 34, and 44, respectively) because of high property values and high taxes.

Texas has the most cities on the list, by far, but Florida also has multiple entries. It doesn’t hurt that neither of these states have a state income tax rate.

10. Orlando, Florida

Population: 249,562

Cost of living index: 100

State income tax: There is no state income tax for Florida

Median household income: $42,418

Median home value: $217,500

Median property taxes: $1,317

Downtown. Photo Bill Dickinson/Commons.

Overall, Orlando’s cost of living is equal to the national average, with goods and services, groceries and utilities slightly more, and healthcare, housing and transportation less. Housing in Orlando is 3.7% less than the Florida average and 8.5% less than the rest of the nation.

Seeing a doctor costs $78.25 on average, which is 17% less than the national average, but going to see a movie costs $10.03 compared to the national average of $9.08.

9. Fort Worth, Texas

Population: 777,992

Cost of living index: 87

State income tax: There is no state income tax for Texas

Median household income: $51,105

Median home value: $120,300

Median property taxes: $1,240

Downtown. Photo David/Commons

In general, the state of Texas has a much lower cost of living than the national average. Fort Worth’s is 13.4% less than the national average with utilities costing more, but housing costing significantly less. Electricity costs 30% more than the rest of the country ($123 vs $94.28), but a trip to the optometrist will cost you 26% less in Fort Worth.

Fort Worth is located just half an hour west of Dallas, which ranked 12 out of 100 countries.

8. Plano, Texas

Population: 272,068

Cost of living index: 97

State income tax: There is no state income tax for Texas

Median household income: $83,193

Median home value: $210,500

Median property taxes: $3,252

The cost of living in Plano is 3.4% less than the national average, which makes it the most expensive of the Texas cities to make the top 10. Of course, Plano’s median household income is also far higher than the rest of the state (and the nation).

Groceries, healthcare, transportation, and utilities all cost more than the rest of the country. Plano is less than half an hour north of Dallas and 15 minutes away from another Texan city coming up.

A newspaper will cost a whopping $31.98 in Plano, according to areavibes.com, which is 97% more than the national average of $16.20. On the other hand, a trip to the beauty salon will cost 18% less than the rest of the country.

7. (tie) Arlington Texas

Population: 375,600

Cost of living index: 88

State income tax: There is no state income tax for Texas

Median household income: $53,341

Median home value: $132,500

Median property taxes: $2,021

Located in between Fort Worth and Dallas, the cost of living in Arlington is 12.4% less than the national average and 3.6% less than the rest of the state. However, utilities (110) will cost more than the rest of the country.

Prices in Arlington are almost identical to those in Fort Worth.

7. (tie) Garland, Texas

Population: 233,564

Cost of living index: 92

State income tax: There is no state income tax for Texas

Median household income: $53,060

Median home value: $118,700

Median property taxes: $1,641

Historic Downtown Garland Square. Photo by William Addington.

Goods and services, healthcare, transportation and utilities in Garland all cost more than the national average, but groceries are on par and housing is, like most of Texas, well below the rest of the country. The median home value in Garland is 40.8% less than the national average.

Just 15 minutes away from Plano, the price of a newspaper is actually even more expensive ($33.95). Also, residents of Garland might want to consider the drive to Plano for healthcare. A visit to the optometrist costs $65 in Plano and $90.80 in Garland; and a doctor visit is $86.52 in Plano and $102.40 in Garland. However, the dentist is cheaper in Garland ($84.43 vs $95).

6. Lubbock, Texas

Population: 236,065

Cost of living index: 82

State income tax: There is no state income tax for Texas

Median household income: $42,584

Median home value: $106,600

Median property taxes: $1,119

Texas Tech University is located in Lubbock. Photo by Johan Hendrikse.

Transportation costs are more than the national average, but housing is 46.8% less. In general the cost of living in Lubbock is 18.2% less than the rest of the country. Insurance, electricity, other energy and phone are all at least 15% cheaper in Lubbock compared to the rest of the country.

5. Anchorage, Alaska

Population: 298,610

Cost of living index: 114

State income tax: There is no state income tax for Alaska

Median household income: $76,495

Median home value: $269,500

Median property taxes: $2,523

Kincaid Park coastline in winter. Photo by Paxson Woelber.

The cost of living for Anchorage may be 15.3% less than the state’s average, but it’s still 14% greater than the rest of the country, which might be okay considering the median household income is 144% greater. Whether residents are getting a haircut, dry cleaning clothes or seeing a movie, prices are more expensive in Anchorage.

The only thing in Anchorage that costs less than the national average was utilities, while seeing a doctor can cost 68% more than the national average and ibuprofen costs 13.2% more.

4. Houston, Texas

Population: 2,160,821

Cost of living index: 83

State income tax: There is no state income tax for Texas

Median household income: $44,648

Median home value: $123,800

Median property taxes: $1,361

Discovery Green Park

By far, the most populous city on the list, the cost of living in Houston is not just 17.1% less than the national average, but also 8.7% less than the state average. In particular housing is cheap with an index rank of 59. The median home value in Houston is 38.2% less than the national average.

Utilities are also much less than the rest of the country: electricity is 9.4% less and other energy is 38% less. Plus, gas is $3.45, which is 4.7% less than the national average.

3. Honolulu, Hawaii

Population: 374,701

Cost of living index: 146

State income tax: 8.25% on income of $48,001 and over

Median household income: $57,479

Median home value: $539,500

Median property taxes: $2,899

Honolulu as seen from Diamond Head. Photo by Chriso Vlahos.

Okay, so living in Hawaii isn’t exactly cheap, but the median household income is slightly better than the national average. The average savings account rate is slightly better than the national average at 0.12% APY. The cost of living is a full 46.1% greater than the national average and 12.6% greater than the Hawaii average.

Utilities are the most expensive thing with electricity costing $218.28 (198% more than the rest of the country) and other energy also 15.6% more than the national average. However, phone costs 18.4% less.

2. Jacksonville, Florida

Population: 836,507

Cost of living index: 92

State income tax: There is no state income tax for Florida

Median household income: $48,143

Median home value: $171,500

Median property taxes: $1,032

Downtown. Photo Rob Bixby/Commons.

Although Jacksonville’s groceries, transportation, and utilities are all more expensive than the national average, housing and healthcare are significantly cheaper. Not only is Jacksonville’s cost of living 8.3% less than the national average, but it’s also 6.2% cheaper than the rest of the Florida average.

A visit to the optometrist will only cost $63.80 and the doctor is only slightly more expensive at $69. While ibuprofen costs more than a dollar more than the rest of the country, Lipitor is 15.6% less.

1. Atlanta, Georgia

Population: 443,775

Cost of living index: 99

State income tax: 6% on income of $7,001 and over

Median household income: $46,146

Median home value: $231,800

Median property taxes: $1,723

Atlanta’s cost of living is just 1.3% less than the national average (100), but it’s significantly cheaper on the housing index (89). Also, Atlanta’s average savings account rate is 0.14% APY.

Homeowners insurance costs 15.6% less, other energy is 20% less and phone is 6.8% less than the rest of the country. Plus a visit to the optometrist costs 17.6% less and ibuprofen only costs $6.11.

On the other hand, a movie ticket will run you $11.10 and a trip to the beauty salon costs nearly 40% more than the national average.