Why are New Yorkers so bad at saving money?

Finance

(AP Photo/Elise Amendola, File)

(NEWS10) — A new study by MagnifyMoney ranks the states by how good (or bad) they are at saving money. New York is ranked the third worst state.

Why do New Yorkers have trouble saving money? The study points to housing costs and jobs as potential reasons why.

In New York:

  • 39.4% of people’s monthly income goes toward housing costs
  • It takes 1.63 years of income for a down payment on a house
  • Job growth from May 2020 to May 2021 was 11%

Compared to Vermont, the number one ranked state for saving money, these numbers don’t seem too bad. In Vermont:

  • 38.4% of people’s monthly income goes toward housing costs
  • It takes 1.31 years of income for a down payment on a house
  • Job growth from May 2020 to May 2021 was 10.1%

The real problem appears with wage growth and the unemployment rate. In Vermont, wage growth is 8.4% and the unemployment rate is 2.6%. In New York, they’re 3.2% and 7.8% respectively. Wage growth is smaller and the unemployment rate is higher.

The problems don’t stop there. The study ranked each state (1 through 51) in several different categories, some of which were already mentioned. Compared to every other state, New York ranks:

Rank
41Down payment to income ratio
38Housing costs as % of income
49Homeownership rate (younger than 45)
20Job growth (April 2021 to May 2021)
7Job growth (May 2020 to May 2021)
36Wage growth
47Unemployment rate

New York is doing relatively well in job growth, but not great in housing costs and unemployment. These combined rankings brought New York down to the third worst state for saving money,

The study does note the COVID-19 pandemic as making it harder to save money. Also, it finds the Midwest states as the best at saving money, whereas coastal states are among the worst at saving money.

To see where your state ranks, check out the study on MagnifyMoney’s website.

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