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Strategies to Save

The Best Places for Raising a Family as a Single Parent

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Being a single parent is a challenge. Not only must single parents manage debt and other financial priorities, they must balance work and time spent with their children. Unfortunately, single-parent households are more likely to be impoverished, and not all states offer the same workplace benefits for parents. That could make raising children harder.

To determine where single parents may fare best, we scored the 100 largest metros on four key indicators:

  • Income score, including median income; the percentage of households living below the poverty line; and the percentage difference between median single-parent households and all households.
  • Affordability score, which considers regional price parity; income limits for in-state child care assistance; the percentage difference between single-parent household median income; and income limits for child care assistance.
  • Time score, which includes the average commute and the average number of hours worked per week.
  • Workplace protection score, which considers statewide paid family leave insurance and protected time off for school events.

Here’s what we found.

Key findings

  • Single parents in Springfield, Mass. came first in our rankings, with a score of 65.2. The city had an especially high time score and workplace protection score.
  • Sacramento, Calif. and Buffalo, N.Y. followed Springfield, with final scores of 62.2 and 61.5, respectively.
  • In McAllen, Texas, a whooping 60.8% of single parents live below the federal poverty line. Honolulu had the lowest incidence of single parents living below the poverty line, at 24.9%.
  • Houston, Texas had the lowest score among the 100 metros we studied. Its final score was 26.7. Notably, the difference between the median income of single parents and all households was -51.4%.
  • Atlanta and Birmingham, Ala., which were No. 99 and No. 98 in our rankings, didn’t fare much better, with final scores of 27.7 and 28.1, respectively.
  • So-called “blue states” tended to dominate the top of the list, thanks mostly to strong workplace protection laws for parents and generous childcare subsidies.
  • On average and across all metros, 39.2% single parents are living below the federal poverty line.

Children aren’t cheap, and raising them is hard. This map highlights locations where being a single parent may be easier or more affordable. Hover your cursor over the dots on the map to review how each metro fared across our key indicators and overall.

10 best places to live as a single parent

This table outlines the 10 best places for single parents to live from a financial perspective. California and New York parents are in luck. Three of the top 10 locations were California-based and four were New York-based. The combination of their high income, affordability, time and workplace protection scores helped determine these locations rankings.

10 worst places to live as a single parent

These locations had the lowest rankings due to their scores in our four key indicators. Single parenthood appears to be more challenging financially in Southern states, with locations in Texas, Georgia, Alabama and South Carolina ranking in the 10 worst places to live as a single parent. Most notable are these 10 locations’ nonexistent (or very low, in the case of Chicago with a score of 10/100) workplace protection scores.

Understanding these rankings

In order to understand how we ranked these locations, it’s important to look at the four following categories that we scored. The average of the scores was individually calculated for each metric within each category and was used to determine the overall metro scores. Those sub-scores were calculated on a scale of 0 to 100, based on where each metro falls between the highest and lowest values among all the metros we reviewed.

The four key indicators that were scored and the metrics within each indicator are:

Income of single parents in the community

  • Median income of single parents.
  • The difference between the median earnings of single-parent households and the median income of all households. This gives us a sense of whether single parents are having a harder time earning money than other members of the community.
  • The percentage of single-parent households that fall below the federal poverty line.

Comparing the difference between incomes of single-parent household and all households gives us a sense of whether single parents have a harder time earning money than other members of the community.

Affordability of the community, particularly related to child care

  • The income limit for child care subsidy assistance from the state.
  • The difference between median earnings for single-parent households and the child care assistance income limit.
  • Regional price parity, which compares local costs – including housing, goods and services – to the nation as a whole. The regional price parity for the U.S. is set at 100, so a number lower than that means that costs are lower and a number above that means costs are higher.

Child care expenses are an absolute necessity for single working parents. So, we wanted to see whether or not a typical single-family household would qualify for assistance from its state, and how much below the qualifying line they fall. This is significant because many assistance programs offer graduated subsidies depending on family income.

However, some states have long waiting lists for assisted child care, so falling within the qualification limit for subsidies doesn’t necessarily mean that parents will actually get the child care they need to earn a living for their families.

Time devoted to work

  • Average commute time in minutes for the metro.
  • Average hours worked each week within the metro.

How much time a single parent spends working impacts their time spent with family and can increase the amount spent on child care costs, such as if the parent needs to put their child in day care while they are away at work or commuting.

Workplace protections for parents

  • The number of weeks under the Family and Medical Leave Act that a state will pay an employee from a state insurance program. Under federal law, workers of certain tenure can’t be reprised for taking up to 12 weeks of leave to care for themselves or close family members per year, however that time is unpaid, barring workplace policy or short-term disability insurance. A handful of states have created insurance programs, similar to unemployment insurance, to pay employees a portion of their usual earnings while they are on approved leave.
  • Protected time off for school events. Because participation in children’s schooling is so important, some states have passed laws to guarantee that parents can take a certain number of hours away from work to attend events and meetings related to their children’s schooling.

Parents in general, but especially single parents, can benefit from regulations that protect them when they take time off work due to family-related issues.

Full rankings: 100 best places for single parents

The following table breaks down the overall score for the 100 best locations as well as presents their subscores for each factor taken into consideration. Each column is sortable in either ascending or descending order. By sorting the chart, you’ll see how the different factors contribute to their scores.

Managing your finances as a single parent

Based off our findings and further research, there are a few ways single parents can better manage their finance on one income and with children.

Consider your debt relief options: If you’ve found yourself in debt and are struggling in repayment, you could review your debt relief options. Chapter 7 or 11 bankruptcy, debt settlement and debt management plans may be available to you. Learning how these options affect your credit score is something you should also research.

Review your personal loans options: Those with credit card debt or high-interest loans may want to consider refinancing or consolidating their debt into a personal loan with a lower interest rate. Doing so could reduce your overall costs for repayment. You could also extend your repayment term to reduce monthly payments, though this could increase how much total interest you pay on your loan.

Learn about government resources for parents: Single parents who are struggling financially may qualify for assistance through government or charitable programs, such as food banks. A 2017 study found that not all single parents were aware of the help that is provided at food banks or were not certain they were entitled to support.

Know your rights: Paid time off for sick children and protections against reprisal for going to parent-teacher conferences can make a big difference, although these policies may not be well enforced. Learn your rights regarding the Family and Medical Leave Act and any protected time off for school events you may be eligible for. Knowing what your rights are will help you protect yourself against employer repercussion.

Methodology

Limiting our research to the current 100 largest metropolitan statistical areas (“MSAs”), we tracked each metro across four categories. The data was derived from the 2017 American Community Survey 5-Year Estimate from the U.S. Census (“2017 ACS”), except where otherwise noted.

Each data series was scored relative to highest and lowest values across all metros. For each category, these scores were averaged for a highest possible category score of 100 and a lowest of 0. The four category scores were then averaged for a final score. The highest possible final score was 100 and the lowest was 0.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jacqueline DeMarco
Jacqueline DeMarco |

Jacqueline DeMarco is a writer at MagnifyMoney. You can email Jacqueline here

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Strategies to Save

Review: The Aspiration Account

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The 2.00% APY has one of the highest rates in the country. If you move both your checking account and savings account into an Aspiration Account, you would be able to earn a high interest rate on your money while avoiding the risk of overdraft and enjoying the convenience of only having one account.

Aspiration is a fairly new financial services company that aims to be “the investment firm for the middle class.” In this video (that could pass for a parody if you didn’t realize they were serious), the company proclaims that it is possible to be a “capitalist with a conscience.” Lofty goals are behind the company and the products they have designed. The CEO (Andrei Cherny) was a former Clinton White House aide, and with Aspiration he is trying to take action and create a new type of financial services firm that lives up to his ideals.

All products offered by Aspiration (which includes two investment funds and a cash management account) have the same pricing model. You decide how much to pay. Yes, the fee is set entirely by you, the customer. You can set it to $0 or you can set it to any amount below $10. You can change the fee whenever you want. They provide a service and you decide what it is worth.

Aspiration is making a big bet.

With traditional banking, people are nickel and dimed every month. Make an out of network ATM withdrawal, and you could end up spending $10 in fees. Put your money into a savings account, and earn only 0.01%. By using Aspiration, you could be much better off financially than banking with your traditional bank. And you can do your own calculation and decide how much of that savings you share with Aspiration. They are hoping that you will share enough for the business to continue.

Application Process for the Aspiration Account

Opening an account used to be a bit challenging as you needed to be invited. However, Aspiration has made it as simple as ever to open an account. Simply click on the “Get Started” button on their website and enter your email address.

 

At that point, you should be directed to a page that allows you to open your account online and apply for the account.

 

Create your password, check the box to let Aspiration know you’ve read the Terms and Conditions, and click “Let’s Go!”. Since this is an online account, there will be extensive KYC (know-your-customer) and compliance questions. I was required to provide:

  • Answers to identity verification questions. These are questions generated by a credit bureau. So, you will be asked to provide your social security number, but they ensure that they won’t “run the kind of credit check that will ding your score”. You might also be asked to answer questions about your mortgage payments, car loans, and other credit bureau items to identify yourself.
  • A link to an existing bank account. This is used to provide the initial funds in the account. I put $10 into the account for a test drive. (By doing this, Aspiration also reduces its risk, because you will have gone through the compliance checks of your existing bank).

Once you finish the account opening process, it may take a few days for the account to be open and for you to receive your debit card in the mail. Aspiration has partnered with Coastal Community Bank in a way that is similar to how Simple operated. (Simple, for those who remember, was not a bank. It created the front-end user interface, but partnered with an FDIC-regulated bank).

Aspiration Mobile App

In 2016, Aspiration joined the rest of the financial industry with the launch of their mobile app. Their app allows you to view your Aspiration Account balance and transaction history, remote deposit checks using your phone’s camera, schedule transfers between the Aspiration Account and other bank accounts, pay bills, and track the impact of your spending habits. The mobile app also allows you to use fingerprint authentication to secure the data.
There are two features that stand out:

  1. Their Payments feature
  2. Their Aspiration Impact Measurement (AIM) feature

Payments

Payments is Aspiration’s bill pay feature. Not only does this feature allow you to pay your bills, but it also allows you to pay your friends. However, unlike other bill pay and money transfer features (like Zelle), Aspiration’s Payments feature sends payees a paper check with your name, address, and optional memo if you choose to include one. This feature is available at no charge to the account holder.

Since this feature is sending a paper check, you can expect the payee to receive the check within 5-7 business days from the send date. Fortunately, Aspiration doesn’t limit the number of payments that can be scheduled and they don’t limit the amount of money you can send.

Aspiration Impact Measurement (AIM)

AIM is a pretty unique feature as it allows you to see the impact you’re making on the planet and people based on your spending habits. This feature will provide you with a score that is determined by the types of businesses you frequent. The score is calculated by how the businesses treat their employees, customers, community, and environment. So, businesses are given a score and you’re given a score based on where you do your shopping.

Aspiration shares that they created AIM “so that we can all think about how our everyday spending can make the world a better place.” This may sound very “kumbaya”, but there’s no denying that they’ve created an innovative feature.

What We Like

  • Unlimited, global ATM fee reimbursement: With this account, you can use any ATM in the world and it won’t cost you a dime. Not only won’t Aspiration charge you a fee, but you will be reimbursed any fee charged by the other bank whether they are located in the U.S. or in another country.
  • Zero overdraft and stop payment fees: This is a huge perk as these are some of the “gotcha” fees that you’ll encounter at big banks.
  • Other fees are also fairly lower than big banks: Outgoing wire transfers and receiving an incoming wire transfer will only cost you 82 cents.
  • One of the best interest rates in the market: At a traditional bricks-and mortar bank, you would receive no interest on your checking account, and you would earn only 0.01% on your savings account. With this account, you earn 2.00% on your entire balance. The best online checking account in the market is currently paying 2.02%, but you need to maintain a balance to earn this APY.
  • You no longer need to have a separate savings account and checking account. With that, you no longer need to worry about overdrafts. At a traditional bank, you could end up paying $10 just to have money automatically transferred from your savings account to your checking account if you make a mistake. Because you can keep all of your money in one account, you will not need to worry about overdraft transfers.
  • All deposits are FDIC-insured, up to $250,000 per depositor.

What We Find Lacking

  • Bill pay functionality. While Aspiration does mention that they will be making updates and improvements to their Payments feature, they don’t seem to mention going away from the paper check method. While sending paper checks may be a good solution for a feature that once didn’t exist at Aspiration, it’s still not as efficient as most online bill pay features that other banks offer.

Who Could Benefit From the Aspiration Account Now?

The perfect profile for an Aspiration Account customer today would be:

  • You travel a lot, and frequently need to use ATMs that are outside of your bank’s network
  • You have a lot of cash that you keep in your account and would like to earn interest on that money
  • You are about the impact you make on people and the environment.

LEARN MORE Secured

on Aspiration’s secure website

Alternatives if This Account is Not Right For You

This account is going to get better over time. It won’t come as a surprise if this account starts to become much more competitive.

Depending upon what feature is most important to you, there are excellent alternatives:

  • If you want the highest interest rate, you can earn up to 2.30% with an online savings account with a moderate deposit amount requirement. You can find the best savings account here.
  • If you want to avoid ATM fees globally, but need better bill pay capabilities, you should open a Charles Schwab checking account. You can find that account, and others, on our checking account page.

This Looks Great and Will Get Better. But is it Sustainable?

One of the biggest worries we have at MagnifyMoney is the following: when something looks too good to be true, it usually doesn’t last long. The offer can last for a few years, but eventually market forces will catch up with it.

Providing unlimited reimbursement of ATM fees globally is expensive. Ally originally offered the same perk and then capped that benefit at $10 per month ($120 per year), because it was impossible for them to make money on the checking accounts otherwise. Aspiration does not have a magic formula, and eventually the business will need to make money somewhere.

Often, banks do not make money on checking accounts. Instead, these accounts serve as the foundation account and the bank cross-sells other products. Perhaps this is Aspiration’s plan.

Regardless, the product is very consumer friendly and potentially lucrative. According to CrunchBase, the business has raised over $67 million. Clearly, the business will need to raise more capital as it scales, especially given the low level of customer profitability expected. There is certainly limited risk to taking advantage of the great offer available now. At MagnifyMoney, we just hope that they find a way to make money sustainably. As Ally customers know all too well, it can be frustrating to switch accounts based upon a strong feature (unlimited ATM reimbursement), only to have that benefit taken away when it is deemed too expensive.

promo-checking-wide-v2

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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Reviews, Strategies to Save

American Express® Personal Savings Account Review: A Solid Choice for Online Banking

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

American Express Personal Savings Account

This account is a great option for anyone who wants the flexibility of earning a high interest rate without the withdrawal restrictions that come with a CD.

APY (%)

1.90% Variable

Minimum Deposit Amount to Open Account

$0

Minimum Balance to Earn APY

$1

Permitted Monthly Withdrawals

6

Annual Fee

$0

FDIC Insured?

Yes

Mobile App?

No

Transfer Time

Deposits will be available within five business days.
Transfers from savings to a checking account
take one to three business days.

In an American Express® Personal Savings account, your money earns 1.90% variable APY. It’s currently one of the best rates you can earn from an online savings account. The account does not have a monthly fee and they don’t require a minimum deposit, which makes it an affordable account to open. You will have to fund your account within 60 days of applying, and the FDIC insures your deposits up to full legal limit.

How the American Express Personal Savings account works

The American Express savings account compounds daily at a variable 1.90% APY, and interest earned is credited to your account on your monthly cycle date. The rate is variable, so American Express can raise or lower the interest rate at any time without notice to you before or after the savings account is opened.

Account holders must fund the account within 60 days, which you can do by setting up a bank transfer or direct deposit to the savings account, as well as by sending a check.

What we like about the American Express Personal Savings account

  • High interest rate The 1.90% variable APY is better than what you would earn putting your money in the accounts most brick-and-mortar banks offer. While there are higher rates to be had, American Express has a good offer.
  • Automatic savings It’s easy to make saving automatic when you have an online savings account. With the American Express Personal Savings account, you can easily set up a recurring deposit to pull funds from an external savings or checking account. To make it even easier to resist touching your savings, you can even have a portion of your paycheck directly deposited to the account.
  • Discourages spending With your money in an online account like the American Express Personal Savings account, you can only get your cash after making a transfer to an external checking account to which you have debit card access. The inconvenience makes it that much more difficult to spend your savings.

What we don’t like about the American Express Personal Savings account

  • No ATM card Not having card access is great when you need to prevent yourself from spending your savings, but the hassle of setting up and making an ACH transfer from your online American Express Personal Savings account can be problematic in a pinch. (American Express says transfers will take one to three business days for funds to become available in your checking account.) If you’re worried about this, you can instead turn to an online bank like Synchrony Bank that makes it easier to access your savings by issuing an ATM card tied to your high yield savings account.
  • Variable interest rate The annual yield rate American Express is offering on this savings account is high at 1.90%, but the bank can change that rate at any time for any reason, as the rate is variable. If you’re looking for a more predictable rate of return, consider a certificate of deposit.
  • Limited withdrawals Because this is a high yield savings account, banks are limited by Federal Reserve Board Regulation D to a maximum of six withdrawals and/or transfers from your online savings account per statement cycle without penalty. With that in mind, before you decide how much you’ll put away each month, make sure it’s not more than you can afford to, so you aren’t repeatedly reaching into your savings.

How the American Express Personal Savings account compares

As indicated earlier, the American Express Personal Savings account offer is strong, but how does it compare to other savings accounts?

Institution
APY
Minimum Account Balance to Earn APY
American Express National Bank
High Yield Savings Account from American Express National Bank

1.90%

$1

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Synchrony Bank – 2.15% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Synchrony Bank
High Yield Savings from Synchrony Bank

2.15%

$0

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on Synchrony Bank’s secure website

Member FDIC

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With $0 to open the account, you can earn an annual yield of 2.15% on savings account balances through Synchrony Bank and there are no monthly fees.

Savings accounts through Synchrony interest is compounded daily and is credited to the account monthly. An ATM card is offered through this account and you can still easily transfer or deposit funds through an ACH transaction or online.

Goldman Sachs Bank USA – 2.15% APY* and $0 minimum to open

Institution
APY
Minimum Account Balance to Earn APY
Goldman Sachs Bank USA
High-yield Online Savings Account from Goldman Sachs Bank USA

2.15%

$0

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on Goldman Sachs Bank USA’s secure website

Member FDIC

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Goldman Sachs Bank USA currently offers an APY of 2.15% on their Marcus Online Savings Account. You don’t need to deposit a minimum amount to open the account, but you will need to have a minimum balance amount of $1* to earn the APY. Interest on the Marcus Savings Account starts accruing the business day you deposit funds into the account. Goldman Sachs Bank USA doesn’t apply any service charges to their savings accounts.

Barclays Bank – 2.10% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Barclays
Online Savings Account from Barclays

2.10%

$0

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on Barclays’s secure website

Member FDIC

Advertiser Disclosure.

We'll receive a referral fee if you click here. This does not impact our rankings or recommendations

With $0 to open the account, you can earn an annual yield of 2.10% on savings account balances through Barclays. While there are no monthly fees, an account that has a balance that is less than $1 for 180 days or more may be closed by Barclays. Savings accounts through Barlcays will start accruing interest the day your initial deposit posts to your account, and interest is compounded daily. While an ATM card is not offered through this account, you can easily transfer or deposit funds through an ACH transaction or online through your account.

American Express CD Rates

These CDs are great for those who don’t have a lot of money to deposit, but the rates are slightly lower than the best CD rates available.

Term

APY

6 months

0.40%

12 months

0.55%

18 months

2.05%

24 months

2.15%

36 months

2.25%

48 months

2.30%

60 months

2.35%

CDs from American Express do not come with a minimum deposit amount. You’re free to deposit as little or as much as you want to begin earning interest on any of its CD terms. This is great for individuals who don’t have a lot of money to deposit in CDs offered by other online banks. The downside is that you won’t be receiving as high of an APY as you could at other online banks. While the rates aren’t terribly low, they just don’t compare to most of the best CD rates currently available.

How CDs offered by American Express work

American Express offers terms spanning from 6 months to 5 years. Interested is credited on a monthly basis and compounds until it matures. You can choose to have the interest transferred out of the CD and into the American Express Personal Savings Account on a monthy basis, transferred into a linked account, or mailed to you monthly, quarterly, or annually via a check. If you touch the principal, however, you’ll incur an early withdrawal penalty. The penalty is based on your CDs term:

  • For CDs with a term of less than 12 months: 90 days worth of interest
  • For CDs with a term of 12 months, but less than 48 months: 270 days worth of interest
  • For CDs with a term of 48 months: 365 days worth of interest
  • For CDs with a term of 60 months: 540 days worth of interest

If you’re able to keep your principal and interest within the CD, you’ll receive notice, either by mail or email, that your CD is about to mature in ten days. If you don’t tell American Express that you do not wish to renew your CD, they’ll automatically renew the CD with the same term unless they no longer offer that term. You can call American Express any time before your maturity date to tell them that you do not wish to have your CD automatically renewed.

Online banks vs. brick-and-mortar banks

Online banks have been having a moment not only because of the rise in mobile banking among consumers, but also because they can simply offer consumers more benefits because they don’t have to worry about as many overhead expenses as brick-and-mortar banks. An August 2017 study by DepositAccounts.com, another subsidiary of LendingTree, shows the annual percentage yield internet banks offer on savings accounts is more than four times what brick-and-mortar banks or credit unions offer. The same analysis shows annual percentage yields on internet bank savings accounts have surged 29 percent since January 2016.

Simply put, the main benefit of putting your money in an online savings account is your money does more for you. To show this, DepositAccounts provided an example, based on the average APYs in those savings categories: If a saver were to put $100,000 in a savings account and leave it alone for 10 years, they would earn $8,338.79 at an online bank versus $1,747.04 in a brick-and-mortar bank and $1,895.28 in a credit union, assuming a fixed APY.

Overall Review of the American Express Personal Savings Account and CDs

Overall, the American Express Personal Savings Account is a solid online savings option. The interest rate they offer is high and the features of the account are comparable to other online banks’ savings accounts. While there are certain aspects of the Personal Savings account that could use improvement, other online banks present the same obstacles. As was mentioned earlier, the American Express Personal Savings account is one of the best options available.

The CDs American Express offers, on the other hand, aren’t quite as good. The 6 and 12-month CDs are nowhere near the best rates offered by other online banks and the 18 – 60-month CDs fall short of the other rates offered. The only feature that makes American Express stand out from most of the other online banks is that this bank doesn’t require a minimum deposit to open an account or start earning interest. If you’re not quite ready to deposit a huge chunk of money into a locked account, you may want to start out with on of the CDs offered by American Express.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]