Housing costs make saving for a rainy day harder in these metros

An analysis of the top 50 US metros has established the best and worst places for homeowners to save a 6-month emergency fund.

Perhaps unsurprisingly, the five metros that rank the worst are all in California according to the report from Bankrate.com, which includes factors such as mortgage payments, insurance, and property taxes – as well as essential cost of living expenses like groceries, transportation, health costs and utilities.

The full study is available at https://www.bankrate.com/banking/savings/rates/#best-metros-for-savers-2019.

San Jose tops the list. Despite the highest after-tax median income ($86,041), an average-spending household would be $31,119 below break-even after a year and would therefore have no chance of saving the $58,580 they would need to cover expenses for 6 months.

Bottom 5 Cities to Build an Emergency Fund:

Conversely, the 5 metros where homeowners will have an easier time saving for a rainy day are Memphis, Cincinnati, Cleveland-Elyria, Pittsburgh, and Detroit-Warren-Dearborn.

In Memphis, a typical household could save $15,761 in a year, more than $500 above the required 6-month buffer.

“Now more than ever, Americans need to start stashing away money to cover any financial emergencies,” said Bankrate.com analyst Adrian Garcia. “This year’s government shutdown highlighted how thousands of Americans are living paycheck to paycheck. Establishing an emergency fund in hard-to-save areas may require cutting spending in some areas but being ready for the next financial crisis is priceless.”

Top 5 Cities to Build an Emergency Fund:

Out of the top 10 metropolitan areas in the US, Atlanta is the easiest to build a six-month savings cushion and Los Angeles is the hardest.