Sorry New Yorkers, when it comes to saving money, we stink.
According to a recent study by MagnifyMoney, a financial services website, New York ranked the third-worst state for socking away money.
It could be worse. Our friends in the Lost Frontier finished dead last. A high unemployment rate and poor wage growth, combined with relatively expensive housing when compared to earnings make Alaska the worst state for savings. The Sunshine State fares only slightly better — cast as the second-worst state to save — thanks to stronger wage growth and lower unemployment.
A high median income here in New York helps offset the high housing costs, according to the study, giving us an edge over Florida and slightly better conditions for saving.
We need only look to the east to see the real staunch savers. When it comes to squirreling away cash, Vermonters are the most disciplined savers. A low unemployment rate and rising wages help. From May 2020 to May 2021, the state has posted a 10.1 percent job growth rate along with a 2.6 percent unemployment rate, the second-lowest in the nation behind New Hampshire.
You could always hop over to a more financially solvent state. Cutting costs is one of the most popular reasons consumers decide to move. In recent months, the proliferation of remote work has inspired some to move to a cheaper or generally more desirable location, but MagnifyMoney senior director of content Ismat Mangla encourages those people to weigh all the factors.
“Will your company adjust your salary according to where you live?” Mangla asks. “If you have to leave this job, will there be other opportunities for you in your new area? Just make sure you’re going into a decision like that with a clear head, and that you consider all the scenarios.”
Since saving money is the foundation of financial security, the struggle remains real here in New York. You can vow to spend less and save more, but somehow every time you commit to stashing more cash something comes up. One week your hot water heater goes kaput. The next week, someone sideswipes your car and doesn’t leave a note.
The reality is, the right time or conditions to save money may never roll around no matter where you live. But, if you aspire to achieve fruitful savings, here are some tips, courtesy of MagnifyMoney.
- Keep track of your budget. Creating a monthly budget can help you track your spending, save money and reach financial goals. The first step is to find out how much money you bring in each month. Then, make note of your fixed expenses and your variable expenses. Once you have a clear picture of what money is coming in and what is going out, set some financial goals. Do you want to grow your savings, or create an emergency fund? Great. Now, come up with a strategy. The 50/30/20 rule is popular among personal finance experts: 50 percent of your income goes toward “needs,” 30 percent to “wants” and the remaining 20 percent to savings or debt repayment.
- Automate your savings. The easiest and most effective way to save is to do it automatically. America Saves, a subsidiary of the Consumer Federation of America, suggests having your employer direct a certain amount from your paycheck each pay period to a savings account. You can also have your bank or credit union transfer a set amount from your checking account to a savings vehicle. You can even stash away your virtual spare change — various financial apps, like Acorns, Qapital and Chime allow you to automate savings by “rounding up.” Every time you swipe your debit or credit card your purchase gets rounded to the nearest dollar, and the cyber coin you accumulate gets stashed in a savings account or investment fund.
- Add to your savings regularly. If you have a high-yield savings account, no matter your situation, make sure your savings are always growing by making regular deposits. According to the folks at MagnifyMoney, even a few dollars a week can grow with interest, helping you build a financial safety net and work toward your goals.
- Minimize unnecessary spending. Take a look at your monthly spending and look for recurring expenses you might be able to downgrade. Do you keep getting hit with ATM fees? Sure, a buck or two may seem small here and there, but it adds up. Consider switching banks to save. How about streaming services? Do you really need Netflix, Hulu, HBO Max, Spotify and Pandora? If you’re looking to save a few bucks, you might want to consider canceling one (or more) at least temporarily.
- Seek professional advice. Staying on top of your budget and making the best financial moves to align with your goals is daunting. Consider hiring a financial adviser to help guide you through important financial decisions. There are also a variety of websites offering free tips. For inspiration, also check out personal finance and investing podcasts, like “Stacking Benjamins” and “Millennial Money.”