2021’s Best & Worst Cities at Money Management

Money management is a life skill that unfortunately isn’t taught as often as it should be. It’s a skill that everyone should want to learn too, as it can bring about flawless credit and freedom from debt. But a survey of consumer financial literacy reflects a growing need for financial instruction in U.S. households. Only 55% of adults, for instance, give their knowledge of personal finance high marks, and just two in five maintain a budget and keep an eye on their spending. Good money management skills are more important now than ever during the COVID-19 pandemic, as many Americans are dealing with unemployment, lower wages or costly medical bills.

It’s clear that some Americans are better than others at handling their finances. In order to determine where they live, WalletHub compared more than 2,500 cities based on 10 key indicators of money management. Our data set ranges from the average credit score to average number of late payments to mortgage debt-to-income ratio.

Curious to know how your own money-management skills compare to those of the average person in your city? Join WalletHub to see a free daily-updated analysis of your credit report and score.

Main Findings

Money Management by City

Ranking by City Size

Note: For readability purposes, the above table displays only 250 of the 2,259 small cities ranked.

Credit Card Debt by State

Ask the Experts

Even with all the resources available today, many Americans still manage their money poorly. For advice and insight, we asked a panel of experts for their thoughts on the following key questions:

1. Should financial skills be taught as a mandatory part of the high school curriculum?
2. What is the most common mistake people make when it comes to managing their money?
3. What is the best way for parents to teach their children how to manage money?
4. Has the growth in mobile personal-finance apps actually helped people more effectively manage their money?
5. What are some short-term financial goals people should consider in order to better manage their money in uncertain times?

Methodology

In order to identify the cities where residents have the best money-management skills, WalletHub compared 2,572 U.S. cities based on 10 key metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the best money-management skills.

We then determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample. For our “Ranking by City Size,” we categorized each city according to the following population-size guidelines:

• Large cities: More than 300,000 people
• Midsize cities: 100,000 to 300,000 people
• Small cities: Fewer than 100,000 people

The metrics are based on data from TransUnion (dating September 2020, the most recent available) and Renwood RealtyTrac. Each city in our sample refers to city proper and excludes the surrounding metro area.

Debt Level – Total Points: 50

• Credit-Card Debt-to-Income Ratio: Full Weight (~10.00 Points)
• Mortgage Debt-to-Income Ratio: Full Weight (~10.00 Points)
• Car-Loan Debt-to-Income Ratio: Full Weight (~10.00 Points)
• Student-Loan Debt-to-Income Ratio: Full Weight (~10.00 Points)
• Average % of Credit Used: Full Weight (~10.00 Points)

Financial Behavior – Total Points: 50

• Median Credit Score: Double Weight (~16.67 Points)
• Average Number of Late Payments: Full Weight (~8.33 Points)
• Share of Delinquent Debtors: Full Weight (~8.33 Points)
• Share of Adults with a Recent Bankruptcy: Full Weight (~8.33 Points)
• Foreclosure Rate: Full Weight (~8.33 Points)

Sources: Data used to create these rankings were collected from U.S. Census Bureau, TransUnion and Renwood RealtyTrac.

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