People do crazy things to save money -- like washing clothes in the shower, reusing sandwich bags and paper towels, and dumpster diving for food. In comparison, relocating to a new city or state to save a few bucks doesn't seem that wacky, particularly for retirees and remote workers.

The impact moving can have on your household's bottom line could be significant, too. Consider how gas and housing prices fluctuate across the 50 U.S. states. According to GasBuddy, you'll pay $2.78 for a gallon of gas in Texas, but $3.64 a gallon in Hawaii. Hawaii also has the most expensive homes, with a median value of $617,400. That's more than five times higher than the $119,800 median home value in West Virginia.

Older woman smiling and holding money

Image Source: Getty Images.

When relocation won't help your budget

Before you start packing your bags, know that relocation isn't a universal solution to an unbalanced budget. To determine if lower living costs will actually help you, you'll have to dive into your spending habits. Using your bank statements or favorite budgeting app, carefully review how you're spending money today.

Divide your expenditures into four categories and compare each to your take-home pay:

  • Must-pay bills like rent, utilities, and healthcare should be about 50% of your income.
  • Nice-to-haves like dining out and gym memberships should no more than 30% of your income.
  • Contributions to your retirement accounts should be 15% of your income if you are working. If you are retired, add this 15% to your must-pay bills category to cover higher healthcare costs in retirement.
  • Debt repayments and savings for non-retirement financial goals should be about 5% of your income.

Let's start with the bad news. If your budget feels tight because you spend too much in the "nice-to-have" category, moving may not help. When you routinely overspend on discretionary items, lowering your required expenses may only fuel that habit. Unless you develop some real purchasing discipline, you're likely to spend any extra money you generate by moving. 

In this case, a better strategy is to directly tackle your discretionary spending. Try hiding all your credit cards and switching to a cash budgeting system. You can do this by withdrawing your spending limit in cash each payday, and then making that money last until the next paycheck arrives. Whether you're working or retired, this strategy forces you to make thoughtful spending decisions. Develop that skill, and you'll make great strides in getting your spending under control.

When relocation will help your budget

Now, for the good news. Lowering your living expenses by moving does make sense in two situations. First, if your must-pay bills are more than 50% of your income -- 65% if you're retired -- you would probably benefit from relocating to a cheaper city. Second, if your debt repayments are more than 10% of your income, lower living expenses will create some breathing room in your budget. You could use that cash cushion to raise your debt repayments and shorten your payoff period, ultimately paying less in interest.

10 best cities to save money

One place to look for cheaper cities is a 2019 report from House Method, an online resource for homeowners, which analyzes yearly and daily costs of living to identify the best big cities for saving money. The analysis compiled data on grocery expenses relative to income and state income taxes, in addition to housing and gas prices for the 100 largest cities in the U.S.

The table below shows the top affordable cities, according to House Method:




Plano, Texas


Gilbert, Arizona


Chandler, Arizona


Chesapeake, Virginia


Irving, Texas


Scottsdale, Arizona


Henderson, Nevada


Wichita, Kansas


Arlington, Texas


Anchorage, Alaska

Data source: House Method

10 worst cities to save money

A relocation to save money has the most upside if living costs are high in your current city. As you can see in the table below, the 10 worst cities for saving money, according to the House Method report, are spread across eight states, from Hawaii to New Jersey.




Honolulu, Hawaii


Long Beach, California


Cleveland, Ohio


New York, New York


Detroit, Michigan


Los Angeles, California


New Orleans, Louisiana


Hialeah, Florida


Miami, Florida


Newark, New Jersey

Data source: House Method

Understand why your budget isn't working first

You know this already, but it's worth repeating: All money problems point back to the budget. Before you settle on moving to lower your living expenses, take the time to understand why money feels tight. If your income doesn't support high housing costs in your neighborhood, then relocating is the right call -- especially if it'll keep you from digging through dumpsters for food.