Americans who are looking to build up a six-month emergency fund should look at where they are living.
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A new study by Bankrate revealed where people were able to save the most money while living in the 50 largest cities in the U.S.
People were able to save the most while living in Memphis, Tenn., along with Cincinnati and Cleveland, Ohio. Residents in these cities were able to build up enough savings to cover a six-month budget in about 12 to 13 months — but only if they watched their spending closely.
“People who live in lower-cost communities have an additional opportunity to accomplish their savings goals,” Bankrate senior economic analyst Mark Hamrick said in the study.
Pittsburgh, Pa., and Detroit, Mich., rounded out the five best cities for savers, while Louisville, Ky., also made it in the top 10 cities to save. Louisville residents were able to build up a six-month emergency fund of about $16,500 in an estimated 15 months.
Those who were looking to save money but lived in the New York area — including parts of New Jersey and Pennsylvania — or the California cities of San Diego, Los Angeles, San Jose and San Francisco struggled to build up savings even if they made compromises in their lifestyle choices, according to the study. The lack of money saved is mainly due to high housing costs.
“It’s not uncommon to see people spending over 30 percent of their income on housing. When it approaches 40 percent or more, it would make sense to start talking about other options,” Todd Christensen, an education manager at Money Fit, told Bankrate.
It will take an average of 520 months or more to build up roughly $30,000 worth of savings for those living in the New York area, the study showed. San Jose, Calif., named the worst city for savers, will take an undermined amount of time to build up a $58,580 emergency fund.
“It’s not about cutting expenses,” Christensen told Bankrate. “It’s about focusing on your top priories and knowing what your financial priorities are.”
Portland, Ore., Boston, Mass., Seattle, Wash., Miami, Fla., and Sacramento, Calif., also made the list of worst cities for savers.