Finance Buzz, the personal finance website that compiled the data, named two other North Texas cities in the top 10 easiest places to save money in the U.S: Irving and Frisco. The website compiled the list of cities using data from the U.S. Census Bureau and the Federal Reserve. It looked at items like debt, living and housing expenses, and taxes.
Amarillo had the lowest cost of living of any city in the compiled Texas data. Tax burdens are also low in the city, but housing costs and credit card debt remain high. Irving is tied for the lowest debt-to-income ratio of any city in the U.S. while also boasting one of the lowest effective tax burdens in the country. Frisco has the fifth-highest median income of any city in the country and benefits from the same low tax burdens as Irving. However, it has a much higher debt-income ratio.
Then there’s Dallas, the city in Texas where it's hardest to save money. Low earnings and high costs of living make it difficult to save cash in Big D, Josh Koebert, a researcher for Finance Buzz, said.
“If the median annual income in a given city is particularly low, a higher percentage of your paycheck has to go to cover basic living expenses, leaving less money left over to put into savings,” Koebert said. “Related to that, cost of living is another major factor that can hurt or hinder one’s ability to save money, as cities where everyday items like food and clothing are more expensive regularly demand a larger chunk of someone’s money than cities where the cost of living is lower.”
Another contributing factor was residents' debt-to-income ratio. If you have too much debt, you may not have anything at the end of the month to set aside. Dallas in particular scored poorly in two key areas: debt-to-income ratio and mortgage as a percent of income, Koebert said. According to census data, Dallas homeowners spend about $2,228 on mortgage and other home costs every month, which is one of the 30 highest mortgage costs of any of the cities Finance Buzz looked at. At the same time, Dallasites make a median annual income of $51,020, which is one of the 50 lowest incomes of any city the website analyzed.“I would say it would help to see communities be welcoming of affordable housing coming into their neighborhoods." – Ashley O. Brundage, Dallas Area Habitat for Humanity
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The median rent for a one-bedroom apartment in the city is $1,350, according to The Dallas Morning News. These prices have decreased about 10% since last year, the News reported based on data from the rental platform Zumper. Despite the decrease, Dallas represents the eighth-most expensive rental market in the North Texas area.
“Taken together, that means that Dallas homeowners tend to spend an outsize chunk of their earnings just paying off their homes, leaving a lot less for them to spend on other expenses, in turn leaving even less that can be put into savings after that,” Koebert said.
Ashley O. Brundage, CEO of Dallas Area Habitat for Humanity, said she wasn’t surprised at all to hear people have trouble saving money in Dallas. “What we’re seeing here in Dallas has been rising costs of rent and rising costs of mortgage rates because the sale of the home has become so much higher than what it was in the past,” Brundage said. “Your monthly mortgage payments have gone up and that impacts people’s ability to save money.”
She said when housing payments go up, people have to cut costs in other areas, and the easiest place to do that is their savings account. Of course, you need to save money to obtain housing in the first place. People who hope to get housing through Habitat for Humanity need to have good credit and a good amount of savings. “So, if you don’t have that good amount of money in a savings account, then it can usually lead to you not being eligible to get a mortgage,” Brundage said.
In addition, many apartments require large deposits, which can also be cost-prohibitive. And if you can’t save, you likely won’t have the money to pay the deposits.
People who make it into a home in Dallas may find they’re housing cost-burdened, Brundage said, meaning they're paying more than 30% of their income on housing. This, too, can make it hard to save money. If people can’t save up, it'll be harder for them to pay for emergency expenses, and then even harder to pay for their housing.
Part of the solution, Brundage said, is to make housing more affordable. There’s no silver bullet, but Dallas is taking steps toward affordability. For example, the city recently approved millions of dollars for affordable housing in Dallas’ 2024 bond package. But there’s even more the city could do.
“I would say it would help to see communities be welcoming of affordable housing coming into their neighborhoods,” Brundage said. “We see a lot of stereotyping of people who are purchasing affordable housing by other community members out there, and that prevents that affordable housing from getting built, which then impacts our community in the long run as well.”
She said if people want to help, they can join the organization Dallas Housing Coalition to help advocate for more affordable housing policies across the city.
Without an adequate amount of money in savings, people are left to make difficult decisions.
“They‘re having to decide how much and what type of food are they putting on the table,” Brundage explained. “Can they afford child care or do they risk leaving their children home alone or in the care of a stranger? There are a lot of critical decisions that are made when you cannot save money and afford all the things that you need in your life to be able to have a stable home life.”
