As Americans, we are very lucky to live in a country with such diverse prospects.  Whether it be living near tropical climate or sub zero temperatures, the choice is there to be made.  Though weather is one reason to choose a spot to live, finding the right financial climate is another.  I’ve done a bit a research, as you’ll see below, to find the best and worst places to live for your money.  The list was formed with many factors in mind.  Specifically, one factor is taxes.  What does it matter how much you make if most of it is leaving your pocket?  I also considered the job market, as status of employment is an obvious must.  These two factors are the two most important things to look at if you have your bottom line in mind.  In addition to the current state of taxes and employment, we’ve also considered the future outlook of both.  If things aren’t trending upward, they will not be a candidate for a “financial” great place to live.  The beauty of this country is that you have the freedom to make your own choice, as opportunity isn’t always available where you were born.  While many will never leave their comfort zone, there are scores of citizens ready to make the move.

In my experience as a tax accountant, I’ve been paid to avoid taxes.  Please, don’t confuse tax avoidance with tax evasion, as I make sure all of my clients are doing things by the book.  That being said, we should be mindful and use the tax code to our advantage.  We’ve seen this in the recent political battle but that’s neither here nor there.  The easiest way to avoid tax is to live in a state that has a low rate or doesn’t have any at all.  Currently, the states that have no income tax are Washington, Texas, South Dakota, Nevada, Florida, Alaska, and Wyoming.  Some of the highest taxed areas are in California, New York, and New Jersey.  

Northern New Jersey (Bad)

Unfortunately, I can attest to the NJ/NY rates as it’s where I’ve always resided.  The income taxes alone are high.  When you add in property and sales taxes onto your federal bill, you realize how much the government is really in your pocket.  Indulge me in a typical NJ situation for someone making 100,000 a year.  A rough estimate is that their tax bracket will be in the 20% range, while they are paying roughly an 8% state tax.  If they own a home, it wouldn’t be a shock to hear of someone paying $8,000 a year in property tax.  So, right there you are already $36,000 or 36% of your money without including any sales tax.  I’d bet that rate goes above 40% once included.  The takeaway is that you are working till May just for the government.  Many have made the pilgrimage somewhere else for this very reason.  

Austin, Texas (Good)

With no state tax and nice weather, cities like Austin are becoming more and more popular.  Add in a low unemployment rate and this is an obvious choice for any best places to live list.  Austin currently has an unemployment rate of 3.5%, that’s 1.3% percent lower than the USA.  And no, you don’t have to be into country music.  Having visited this city in particular, I didn’t get the whole country western feel you’d expect.  Don’t get me wrong, it’s there but not as much as you’d think.  

Charlotte, North Carolina (Good)

Charlotte is on fire!  Their educational system, as well as their job market are making it a prime place for a family to settle.  With the cost of living below the national average, big companies like Wells Fargo and Bank of America have set up shot there.  If you’re in the financial field, Charlotte may move to the top of your list.

California (Bad)

I have to say, I love California.  Who can argue against living in sunny San Diego?  It’s seventy something degrees all year round and the beach is right there.  Unfortunately, the average price of house is way over the national average.  If you were to combine California sales and income taxes rates, you’d come out to 11.2%! A family of four will have to financially outperform the country in order to live comfortably in SoCal.  Florida may be a better option if weather is a high priority for you, since they have no state tax for individuals.  

I implore you to look at your situation and do what’s best for you and your family.  What’s good for you may not be good for your neighbor, so take take this list with a grain of salt.  Consider quality of life and the future opportunity of your family, as tax/employment numbers are not exactly a crystal ball.  Keep yourself informed when it comes to politics and business trends, as the next great place to live may be on the horizon.  Good luck!

Eric Estevez is a freelance writer, blogger, finance coach, and tax accountant. He has been training in the grappling art of Brazilian Jiu-Jitsu since 2010, currently holding the rank of Purple Belt. JiuJitsuFinance.com combines his passion and life's work where he teaches you how to do Financial Jiu-Jitsu! The blog focuses on financial literacy, as well as current financial issues for all ages.

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