Holiday Budgets by City
Besides bringing good cheer, the holidays also can invite seasonal stress, a primary source of which is our addiction to spending. The National Retail Federation predicts that 2019 holiday spending will increase by about 4 percent over 2018, with a total of over $727 - $730 billion in retail sales excluding car dealers, gas and restaurants.
Although spending a little extra around the holidays might seem negligible, it’s important to put it in the context of American spending, and credit card debt, as a whole. In 2019, the average household credit card debt is $8,602, according to WalletHub’s data. At the beginning of the year, there was over $1 trillion in total credit card debt, and WalletHub projects a $70 billion net increase this year.
To help consumers avoid post-holiday regret, WalletHub calculated the maximum holiday budget for each of 570 U.S. cities using five key characteristics of the population, such as income, age and savings-to-monthly expenses ratio. Read on to get a better sense of your area’s spending range. Below the ranking you’ll find invaluable holiday-spending advice from WalletHub’s panel of financial experts, as well as our full methodology.
Are you in danger of wrecking your Black Friday spending plans? WalletHub will calculate custom holiday budgets for all WalletHub members between now and Dec. 25, so make sure to join our community today. And if you want to get ahead of the shopping crowds, check out our preview of 2019’s Best Black Friday Ad Leaks.
Holiday Budget by City
*No. 1 = Biggest
Ask the Experts
Holiday spending is driven largely by the current economic climate, among other factors. In order to help consumers keep their holiday budgets in check, we asked a panel of experts to share money-saving advice and insight on factors that affect holiday spending. Click on the experts’ profiles below to read their bios and thoughts on the following key questions:
- What tips do you have to help people avoid holiday overspending?
- How do you think the current social and economic environments are influencing household holiday spending decisions?
- Where should people draw the line in determining who to purchase a gift for?
- How can people show love and appreciation over the holidays without spending money on gifts?
- Nearly one in 15 adults are shopaholics. How can someone tell if he or she is a shopaholic?
In order to determine the cities with the biggest holiday budgets, WalletHub compared 570 cities across five key metrics: 1) Income, 2) Age, 3) Debt-to-Income Ratio, 4) Monthly Income-to-Monthly Expenses Ratio and 5) Savings-to-Monthly Expenses Ratio. Our calculation is based on WalletHub’s proprietary algorithm, which takes into account the aforementioned five factors to determine the holiday budget for a particular city.
At a high level, our algorithm considers a consumer to be in a comfortable financial position to engage in holiday spending if they have: 1) enough emergency savings to cover at least six months of expenses and 2) a debt-to-income ratio smaller than 22 percent for a renter or 43 percent for a homeowner. Depending on a city’s specific characteristics, the algorithm adjusts upward or downward to create a custom estimate.
Finally, we use the same algorithm to provide a personal holiday-budget estimate for all WalletHub members between now and Dec. 25.
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Sources: Data used to create this ranking were collected from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, SimpleTuition, Pitney Bowes, Tax Foundation, IRS.com and TransUnion.
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