pinching pennies

How much money you need to save for an emergency fund in Houston — and how long it takes

It would take years for the average Houstonian to build up a full emergency fund, a new study finds.

boonchai wedmakawand/Getty Images

The cost of living in Houston is severely hampering residents' ability to save money — so much so that it takes years to build an ample emergency fund, according to a new study.

Financial site Bankrate.com crunched the numbers on how much Americans in the 50 largest metros need in their emergency funds — and how long it will take to save up. Houston-The Woodlands-Sugar Land ranks No. 32 out of 50, making it one of the worst metros for savers.

In Houston, residents need $22,449 in the bank to cover six months of expenses. But those earning the median income can only save $11,039 annually after covering housing costs and other necessities, according to Bankrate.com's analysis. It would take a Houston resident earning the median income 24.4 months — more than two years — to save the necessary funds.

For its calculation, Bankrate started with the metro area's 2017 household median income provided by U.S. Census Bureau data. The study then subtracted the mortgage payments and property taxes on a median-priced home; estimated state and federal income taxes; and percentages spent on other essentials, like groceries, transportation, health costs, and utilities. Bankrate assumed the remaining funds would be put into savings.

"People living in areas with high housing costs could forgo all nonessential expenses for three years, religiously saving their extra dollars month after month, and still not accumulate enough cash for their recommended emergency fund," the study says.

This is the case in Austin-Round Rock, which is the worst spot for savers in Texas, at No. 38. Median income earners there need $26,712 to cover six months of expenses but can only save $7,770 a year. That means it takes Austinites 41.3 months, or more than three years, to save up a full fund.

How much someone needs to save and how long it takes varies greatly by location.

The San Antonio-New Braunfels area ranks No. 30 on the list, the best showing of any Texas metro. Median income earners need $20,151 to cover six months of expenses. That will take 22.7 months of saving to achieve, as they can afford to set aside $10,664 a year.

Dallas-Fort Worth-Arlington ranks No. 36, slightly better than Austin. Those residents need $23,484 in their emergency funds, but median income earners can only set aside $9,704 a year. That means if DFW residents pinched every penny they could, it would take 29 months to save up a full fund.

Folks don't live like that, though, the study acknowledges. "Most of us don’t shove every extra dollar into the piggy bank, because we make 'nonessential' purchases for haircuts, toothbrushes, and other goods and services," the study says.

The best place to save money is Memphis, Tennessee, where the median income earner can set aside up to $15,761 a year, more than the $15,208 needed for a six-month emergency fund. California is home to the four worst metros for savers — it's "nearly impossible" to build savings in San Diego (No. 47), Los Angeles (No. 48), San Francisco (No. 49), and San Jose (No. 50).

income analysis

Texas families need to make this much money for one parent to stay home

Photo by CDC on Unsplash

With costs to raise a child soaring over $20,000 a year in Texas, some households might decide to have one parent work while the other stays at home to raise their child.

As the cost of raising a child balloons in major cities like Houston, many families are weighing the choice between paying for child care or having one parent stay home full-time.

A recent analysis from SmartAsset determined the minimum income one parent needs to earn to support their partner staying at home to raise one child in all 50 states. In Texas — not just Houston — that amount is just under $75,000.

The study used the MIT Living Wage Calculator to compare the annual living wages needed for a household with two working adults and one child, and a household with one working adult, a stay-at-home parent, and one child. The study also calculated how much it would cost to raise a child with two working parents based on factors such as "food, housing, childcare, healthcare, transportation, incremental income taxes and other necessities."

A Texas household with one working parent would need to earn $74,734 a year to support a stay-at-home partner and a child, the report found. If two parents worked in the household, necessitating some additional costs like childcare and transportation, it would require an additional $10,504 in annual income to raise their child.

SmartAsset said the cost to raise a child in Texas in a two-working-parent household adds up to $23,587. Raising a child in Houston, however, is somewhat more affordable. A separate SmartAsset study from June 2025 determined it costs $21,868 to raise a child in the Houston-Pasadena-The Woodlands metro.

In the report's ranking of states with the highest minimum income needed to support a family with one working adult, a stay-at-home parent, and one child, Texas ranked 32nd on the list.

In other states like Massachusetts, where raising a child can cost more than $40,000 a year, the report acknowledges ways families are working to reduce any financial burdens.

"This often includes considerations around who’s going to work in the household, and whether young children will require paid daycare services while parents are occupied," the report said. "With tradeoffs abound, many parents might seek to understand the minimum income needed to keep the family afloat while allowing the other parent to stay home to raise a young child."

The top 10 states with the lowest minimum income threshold to support a three-person family on one income are:

West Virginia – $68,099
Arkansas – $68,141
Mississippi – $70,242
Kentucky – $70,408
North Dakota – $70,949
Oklahoma – $71,718
Ohio – $72,114
South Dakota – $72,218
Alabama – $72,238
Nebraska – $72,966

texas income smartasset family

pinching pennies

How much money you need to save for an emergency fund in Houston — and how long it takes

Houston chef's hip new Italian restaurant now open in Heights hotel

Airbnb pledges over $1 million to improve Houston before World Cup

Eclectic comfort food restaurant to shutter after 21 years in Houston

income analysis

Texas families need to make this much money for one parent to stay home