Where you live plays a big role in how easy or difficult it is to save money. Taxes, real estate prices, employment opportunities are just a few of the things that can be different by location and impact your savings.

I live in Dallas, Texas which makes saving pretty darn easy for me. Here’s why:

No State Income Tax

I used to live in Missouri where the state income tax was 6% for every dollar earned over $9,000. As a frame of reference, I contribute 6% to my 401k every year. In Texas, 6% gets you a nice contribution to your retirement savings. In Missouri, it gets you all the same public services that are already available in Texas without an income tax.

Texas wins.

Employment Opportunities

The unemployment rate for Texas is currently sitting at 7.1%, which is 20th best in the nation. Missouri is 7.4%. I already have a job so this doesn’t directly affect me at the moment, but could in the future. However, the 7.4% rate seems to be a bit misleading where I live. There are lots of new buildings and companies all the time in my area and skilled workers should have no problem finding a job.

If you want a job, just move to North Dakota where the unemployment rate is 3.1% due to newly discovered oil that is providing so many jobs that workers can’t even find places to live. If you can’t find a job in Nevada, you aren’t alone: they have the highest unemployment rate at 12.3%.

Real Estate Prices

dallas downtown

photo credit: flickr.com/kenlund

Dallas real estate is cheap. I have a work colleague who moved from Dallas, TX to St. Louis, MO and was PISSED when he found out how much housing was in St. Louis. He had to pay a heck of a lot more for a home in St. Louis than he would have paid in Dallas (although the St. Louis homes do have basements).

Real estate prices also vary dramatically within states and even cities. My theory is that I’m willing to pay for safety and proximity to work, so I’ll spend a little more to get an apartment or house where I’m safe and don’t have an hour long commute.

Transportation

It’s expensive to get around in Dallas. I’m thinking about going without a car when my lease is up, but that’s going to be very hard because the infrastructure in the city was built for people with personal vehicles. If I lived in a place like New York City or Boston I could manage without a car, but I almost need one here which costs me about $500 a month.

Psychology

One of the biggest ways I save money is Texas is the psychology of the city of Dallas in general. I compare my social lifestyle here to that of my friend who lives in New York City and there is really no comparison. The young people I know in Manhattan spend money on going out many nights every week, expensive clothing, shows, and more.

Of course people spend money in Dallas as well, but not to the degree of New Yorkers (at least in my personal experience). It’s not that someone CAN’T save money in New York; it just seems like it’s a lot harder to do it there.

TeacHer Finance just did an article about how applicable financial advice is to people in different locations. She believes personal finance advice is better the more localized it is.

Readers: Do you think location plays a big role in how well someone is able to save money? If so, do you think taxes and real estate are more or less important than the collective psychology of the location?