In the current economic climate, it’s a challenge to have any spare cash to save and many people are living paycheck to paycheck with nothing left over for unexpected circumstances and certainly very little to put aside for a rainy day or into any kind of nest egg for the future.
This article looks at the worst states for saving money and information has been analyzed from both governmental and private data and is based on:
- Deposits Per Capita – States with a low amount of deposits made into federally insured banks were given the lowest scores.
- Taxes – States which scored the lowest were those with the highest marginal income taxes.
- Debts – States with the most amount of credit card debts per household were scored low.
- Saving Interest Rates – States with low interest rates scored low in this section.
- Coupon Snipping – States which offered the least coupons through “coupons.com” were ranked low.
The method used to determine which states were the worst places for saving are based on the weighted-average and those with the lowest overall average were believed to be the least favorable places to save.
The worst states for saving were mostly found along the West Coast and scored low due to a combination of the low amount of deposits made per person and high income tax rates which together create a very challenging situation for savers.
States Which Present a Savings Challenge
The following states are those that demonstrate the worst case scenario for savers according to the data collected and analyzed:
Oregon has a very high income tax rate making it hard for people to save and it has the lowest amount of money deposited per person which makes it the lowest ranking state for saving.
The income tax rate in Hawaii is the second highest and also has the third worst credit card debt in the nation. This combination is not a great climate for savers.
Households in Alaska have the highest credit card debt and even with zero per cent income tax they still struggle to make any significant saving deposits which proves that even with the best possible income tax laws, saving can still be a challenge.
The lowest amount of savings deposited in the entire nation are made in Idaho per person and this is surprising because the population in this state is considerably small.
This northeastern state has the second lowest population in the United States and yet it has the seventh highest income tax rate in the nation.
Maryland’s credit card debt is the fourth highest per household on average in the country. They are also have a high value of coupon clipper savings but overall their savings potential was still not enough to keep them off this list.
With the highest income tax rate in the nation and high credit card debt, California has money in the bank but the high population offsets this and makes saving more difficult. However, California does make the highest amount of coupon clipper savings in the country.
This state has the second lowest amount deposited per person in the United States but overall they scored competitively in all categories.
South Carolina is the fourth lowest state for the amount each person deposits out of all the states. They have a tax bracket of 7% which is mandatory for anyone who earns more than $14,401.
New Jersey has the second highest average credit card debt which is just a little lower than Alaska’s and this is the reason along with the income tax rate which has determined State’s rank as one of the worst places to save.
The following table shows the information about the deposits made per capita, the income tax rate, the average credit card debt and how much was saved per state by the use of coupons from “coupons.com” for each state mentioned above.
Since the 1970s there has been a gradual downward trend of the amount of personal income that has been saved compared to the amount of net income that has been earned. Savings were at their highest in 1975 when people saved around 17% of their disposable income compared to just 5% today according to the Bureau of Economic Analysis here in the United States.
[Read: The Best States to Save Money]
Some of the results in this article may be surprising and if you really wanted to, you could consider moving to a state that has a better climate for saving. However, there are ways to start saving even if you do live in one of these states. Taking control of credit card debt and taking advantage of savings through coupon schemes is a great way to make more of your income but it will still be a struggle if you’re battling against high income tax rates.