2016's Best & Worst Cities At Money ManagementVW Staff
2016's Best & Worst Cities At Money Management by Richie Bernardo, WalletHub
Money management is a life skill that unfortunately doesn’t come with a manual. If it did, and assuming everyone followed the rules, we’d all have flawless credit and zero debt. Plus, sites like WalletHub wouldn’t exist. But the average credit score in the U.S. — 668, which is considered “fair” by the most common scoring models — reflects a shortage of fiscal prowess in our nation. Nearly one in four adults, for instance, confess to not paying their bills on time. And three-quarters of all college students with credit cards admit to being unaware of late-payment fees.
Much of the ignorance begins to breed during childhood. The strength of our money-management skills as adults depends heavily on our financial role models growing up. According to a study by T. Rowe Price, “Seventy-two percent of parents experience at least some reluctance to talk to their kids about financial matters,” indicating the proportion of us who are bound to lack the know-how later in life.
Adults in our classrooms are no better, either. Fewer than one in five teachers feel sufficiently competent to teach a course on personal finance, partly explaining why only 17 states require high school students to complete such a class and an underwhelming five mandate it for graduation. But the courses seem to work. The National Endowment for Financial Education found that students who were required to learn about money management at school became better adult consumers with higher credit scores, a greater tendency to save money and a lower likelihood of compulsive spending.
In light of such need for financial instruction in our schools, WalletHub’s analysts compared 2,570 cities based on eight key metrics that speak to consumers’ ability to keep their financial house in order. Our data set ranges from “credit score” to “average number of late payments” to “mortgage debt-to-income ratio.” Scroll down to see how your city fared and what experts have to say about money matters.
Curious to know how your own money-management skills stack up against those of the average Jane or Joe from your city? Join WalletHub to see an analysis of your free credit report and score.
With only two in five adults saying they maintain a budget and keep close track of their spending and nearly one in four confessing to not paying their bills on time, the personal finance website WalletHub conducted an in-depth analysis of 2016's Best & Worst Cities at Money Management.
In order to identify where Americans are best at handling their personal finances, WalletHub’s analysts compared 2,570 cities based on eight key metrics. Our data set ranges from “credit score” to “average number of late payments” to “mortgage debt-to-income ratio.”
Comparing the Best & Worst Cities at Money Management
- Athens, Ohio, has the highest credit-card debt-to-income ratio, 113 percent, which is 23 times greater than in Cupertino, Calif., the city with the lowest, 5 percent.
- Boone, N.C., has the highest mortgage debt-to-income ratio, which is 18 times greater than in West Mifflin, Pa., the city with the lowest.
- Boone, N.C., has the highest car-loan debt-to-income ratio, 404 percent, which is 27 times greater than in Scarsdale, N.Y., the city with the lowest, 15 percent.
- East Lansing, Mich., has the highest student-loan debt-to-income ratio, 745 percent, which is 24 times greater than in Saratoga, Calif., the city with the lowest, 31 percent.
- Alice, Texas, has the highest average number of late payments, 6.96, which is 16 times greater than in Saratoga, Calif., the city with the lowest, 0.45.
- San Tan Valley, Ariz., has the highest average percentage of credit used, 61.3 percent, which is three times greater than in Laguna Woods, Calif., the city with the lowest, 20 percent.