In an attempt to track consumer spending trends, a recent study by LendingTree ranked the 50 largest metro areas based on where consumers can most or least afford their financial obligations. According to LendingTree writer Vivian Giang, contrary to popular belief, some of the most expensive cities in U.S have people living well within a budget. The report draws attention to the link between good education and higher incomes, both factors that are of paramount significance to affordability.
LendingTree analysts based their findings by comparing anonymized credit reporting data of LendingTree users from August 2018 and average household income from the latest U.S. Census Bureau data. The resulting ranking was based off info such as the number of credit inquiries in the past two years, the use of revolving credit lines, non-housing debt, and mortgage balances.
Based off of a 100-point scale, the top 10 cities where people are best at spending within their means are:
- San Jose, California - 73.6
- San Francisco - 70.6
- Raleigh, North Carolina - 68.0
- Minneapolis - 67.5
- Boston - 66.5
- New York - 66.2
- Milwaukee - 63.9
- Pittsburgh - 62.5
- Kansas City, Missouri - 62.3
- Denver - 62.1
San Jose, San Francisco, Raleigh topped the list because they have a large number of residents earning high-incomes, which in turn helps them pay their bills and exorbitantly-priced houses.
In sharp contrast, San Antonio was ranked at No. 50 on LendingTree’s list. While there is a general consensus that people are flocking to markets such as San Antonio, the report clearly reveals the plight of many in cities such as these to be struggling with their monthly payments. Las Vegas and Riverside are also among cities that have low-income earners, higher rates of unemployment and an increased expenditure on vehicles often beyond purchasing powers.
The report also touches upon the perils of poor financial habits and a lack of financial education. Consolidating loans to cut down on multiple payments, free credit report monitoring to adjust debt repayment strategy, refinancing existing loans or mortgage to lower interest rates, avoiding hard credit inquiries, timely payment, and planned budgets are some of the solutions the report suggests as tools to manage money more efficiently.
A better financial insight that emphasizes the need to spend wisely and education that ensures a high income seems to be the need of the hour to thrive in expensive and economically lucrative markets across the country.
To view the full report, including the ranking of all 50 metros, click here.