Saving Money Is Easiest If You Live In This US City

According to Statista, rising inflation had major impacts on the cost of living in the United States. After climbing to 9.1% in June 2022, the inflation settled at 8% before falling again to 3.1% in 2023. Since then, inflation has remained relatively steady but still below pre-2022 rates. Yet, the damage has already been done for 34% of Americans who have admitted to struggling to keep up with their living costs, as reported by Ramsey Solutions. Although ~65% of Americans are homeowners, the cost of housing has risen to an average of $511,100 (again, per Statista), no doubt influencing the rising number of renters, which accounted for 44 million occupied housing units as of 2022.

Bankrate's 2024 Annual Emergency Savings Report, meanwhile, found that 59% of Americans are concerned about their lack of emergency savings, with 63% pointing to high interest rates and 45% calling out inflation as contributing factors. Twenty-seven percent of respondents said currently they had no emergency savings. Add to this, the fact that 36% answered that they have more credit card debt than savings (though 55% have more savings), while another 36% aim to pay down debt and save money, it becomes clearer that the cost of living is a big issue for many.

The good news, though, is that just by changing your location on the map, you can create a better situation for both saving and paying off debt. In fact, there's one city in particular that makes saving money pretty easy, at least according to a new study. The city? The Glass City aka Toledo, Ohio.

With U.S. household debt rising to $17.69 trillion in the first quarter of 2024, and $1.12 trillion of that existing as credit card debt, one simple tip for paying off that debt would be to live somewhere with a cost of living that allows you to save enough money to do so. Whether you're one of the 9% of delinquent card holders, in danger of becoming delinquent, or being held back from your financial goals because of your card debt, a move to Toledo, Ohio, could help.

Per a 2024 FinanceBuzz study of 125 U.S. cities, Toledo, Ohio, emerged as the easiest city to save money. One of the biggest factors? Average credit card debt, which sits at $2,220 in Toledo, good for a top-three spot on the list for lowest median credit card debt. The city has a debt-to-income ratio of 1.08 and an overall affordability score of 73.7.

In comparison, Oxnard, California — the hardest city to save money — has an affordability score of 18.8. This city's debt-to-income ratio is more than double Toledo's, at 2.51. Also, Toledo's 1.08 score is 32.5% better than the average for all 125 cities, at 1.60. With the lower debt load and better cost of living in Toledo, consumers just need to figure out, is it best to save money or pay off your credit card debt first?

According to the Harvard Joint Center for Housing Studies, the cost of housing — after settling in 2023 — rose 6.4% by February 2024, representing a 47% leap from 2022. Where homeownership is concerned, between 2019 and 2022, the number of Americans spending over 30% of their income on housing rose from 3 million to 19.7 million, which is considered cost-burdened homeownership. For renters, the financial picture isn't much better. The JCHS survey found that more than half of renter households in the U.S., or 22.4 million, are also paying over 30% of their income into rent.

Returning to Toledo, the FinanceBuzz study found that rent in Toledo as a percentage of income accounted for 22% of household income, well below the 30% threshold for cost-burdened housing. As far as what your mortgage should be based on your income, Toledo also boasts an average 27% of income going toward mortgages, which is again a budgetary sweet spot. Keep in mind, that's with a median income of $46,637. To put that in perspective, the average across all 125 cities for rent and mortgage as a percentage of income was 30% and 41%, respectively. Put simply, whether saving money or paying off debt is your goal, Toledo is a city that offers a great opportunity to do either.