Aspiring millionaires rank living frugally behind only hard work and education as the most important wealth creation factor. But some cities make it harder than others.
Aspiring millionaires rank frugality behind hard work and education, and above smart investing, as the primary factor in their wealth creation, according to wealth level research conducted by Spectrem Group’s Millionaire Corner. But some cities make living frugally harder than others.
A new GoBankingRates survey of the worst and best cities for saving money finds that you might not just leave your heart in San Francisco; you might also leave most of your money. In fact, you might just want to stay clear of the West Coast altogether. Nine of the cities deemed to be the worst for saving money are located in California.
There is definitely a price to pay for living in the fabled City by the Bay with its skyrocketing housing costs, astronomical rents and sales tax (8.75 percent) and gas prices ($2.66 a gallon) that are among the highest in the country. On the plus side, the survey notes, the robust tech industry keeps unemployment below the national average (4.6 percent).
Just down the coast is Los Angeles, the City of Angels, but a devil of a place to live frugally. The second-worst city to save money has a high unemployment rate (9.1 percent) coupled with a high sales tax (9 percent) and gas prices ($2.46 a gallon). The survey quotes one analysis that finds a Los Angeles resident earning the median income would have to spend almost half of his earnings on rent, well above the recommended 30 percent.
Next up is Irvine, another California city with high median property values, rent, and sales tax and gas prices. But it does boast an impressive median income ($96,278) and low unemployment rate (3.9 percent). And, the survey adds, it is known for its excellent schools.
Our tour of the worst cities for saving money leapfrogs across the country to New York City, the only non-California city on the list. The Big Apple is infamous for its high median monthly rent ($1,196), sales tax (8.875 percent) and unemployment (7.7 percent). Still, if you can make it there….
It’s back to California and Oakland, now considered one of the most expensive places to live in the Bay Area. Between 2012 and 2013, the survey notes, the median sales price for a home in Oakland jumped 76 percent. It, too, has a high unemployment rate (9 percent) and sales tax (9 percent).
Rounding out the top 10 worst cities for saving money, according to the survey: San Jose; Long Beach; Fremont; Stockton and Santa Ana.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.