With around 74% of Americans with a budget citing increasing costs as the biggest challenge they currently face when trying to stick to a budget, WalletHub today released its report on 2025’s Cities With the Best and Worst Budgeters to congratulate those handling their finances well and shine a light on the places that need to improve.
To determine where the best budgeters live, WalletHub compared more than 180 cities across 12 key metrics, ranging from the average credit score to debt-to-income ratios to foreclosure rates.
| Cities With the Best Budgeters | Cities With the Worst Budgeters |
| 1. Seattle, WA | 173. Toledo, OH |
| 2. Fremont, CA | 174. Tulsa, OK |
| 3. Honolulu, HI | 175. Montgomery, AL |
| 4. Pearl City, HI | 176. Mobile, AL |
| 5. San Jose, CA | 177. Huntington, WV |
| 6. Minneapolis, MN | 178. New Orleans, LA |
| 7. South Burlington, VT | 179. Jackson, MS |
| 8. St. Paul, MN | 180. Gulfport, MS |
| 9. Huntington Beach, CA | 181. Memphis, TN |
| 10. Tacoma, WA | 182. Shreveport, LA |
To view the full report and your city’s rank, please visit:
https://wallethub.com/edu/
“Creating a budget is essential because it helps you avoid overspending and enables you to meet your financial goals like paying off debt, building an emergency fund or saving for retirement. Budgeting can also improve your credit score by helping you develop responsible financial habits, and can make it easier to catch fraud.”
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“Seattle has the best budgeters in the U.S., with residents having some of the lowest debt-to-income ratios in the U.S. for credit card debt, student loan debt and car loan debt. Seattle residents also have one of the lowest credit utilization ratios in the country, with residents using less than 33% of their credit limits, on average. This is very close to 30%, the recommended maximum credit utilization ratio. Another way people in Seattle show their ability to stick to a budget is the fact that they have one of the lowest 90-day mortgage delinquency rates in the country.”
- Chip Lupo, WalletHub Analyst
Expert Commentary
What is the biggest obstacle for consumers trying to stick to their budgets?
“One of the biggest budget downfalls is that people underestimate variable, but necessary, expenses like groceries and gas for their vehicles. It's best to overestimate these types of expenses and then track these expenses for a few months. Budgets should be reassessed on a regular basis and need to be routinely adjusted to reflect actual spending at least every three to four months. It's a dynamic process, not just a one and done event to set a budget. Also, too often people think about cutting expenses rather than increasing their income. It seems to be what many financial gurus emphasize as well. Often, the answer is some combination of looking for a job with better pay, finding a side gig of either another part-time job or something entrepreneurial (which can also provide multiple tax advantages), and/or investing in further education or certifications to make oneself more qualified and competitive for better paying positions with more advancement opportunities. Some employers will even pay for further education if it will make you better at the job you are currently doing.”
Julie Mull, Ph.D., CFP®, ChFC®, MBA – Business Department Chair; Program Director, CFP Board Registered Programs, Carroll College
“The biggest obstacle for consumers trying to spend less than they earn is lack of sufficient funds set aside in savings for unexpected expenses. Life happens--it can't always be controlled. But having money set aside to help with unexpected expenses or unexpected life events, whether emergencies or not, will alleviate or prevent some mental and financial stress. In addition, most consumers are not fully aware of expected expenses that don't occur every month. These expenses are not emergencies and could be planned in advance, such as automotive maintenance and repairs, holiday and special occasion expenses, back-to-school registration fees or tuition, or home maintenance or appliance replacement. Consumers would benefit from reframing their approach to such expenses and treat them as a regular, planned expenses. This can be done by making a list of these expenses expected to occur within the next year. Total the estimated cost of these, divide by how many paychecks you have, and then put that money into a savings account named specifically for these non-monthly expected expenses. When new tires are needed or the holiday season arrives, you have the money set aside ready to pay for it. Those expenses become planned and accounted for instead of obstacles.”
Melanie D. Jewkes – Extension Professor, Utah State University Extension - Salt Lake County
What tips do you have for consumers looking to make a budget and stick to it?
“My biggest tip is to start by tracking your spending to make sure that the budget you plan is a realistic change. By tracking your spending for a month or two, you can get an idea of what your current financial habits actually are. Then, when you plan your budget, check back to see how big of a change you are planning to make. I've often seen people I work with set up a budget that looks reasonable, but actually represents a significant shift from their current habits. Making smaller changes is more sustainable in the long term, but you have to know your current spending to know what sort of change you are planning.”
Carrie Sorenson, MPH, AFC® – Family and Consumer Sciences Educator, University of Maryland Extension
“One of the best things you can do to create a budget and stick to it is to build awareness of your spending habits. To do this, you can keep a list of what you spend money on for a few weeks, or you can review bank or credit card statements. The purpose is to get a really good handle on what you spend and on what type of expenses. This can become a starting point to create a budget that matches your spending habits and will likely be a more realistic starting point. Next, having a purpose in mind can help keep you motivated. Why do you want to budget? Is it to save more for retirement? Do you anticipate a decrease in income? Do you want to save toward a few specific goals? When you have a purpose in mind, create spending around the goals by treating a goal as an expense. For example, if you want to go on a vacation abroad, create a savings account with the name of the vacation destination, and include the destination as a line item in your budget. Remember that an intentional spending plan can take time to make it flow without hiccups, but a check-in weekly or a few times a month can help you stay on track to meet your goals and stay within the spending boundaries you create.”
Melanie D. Jewkes – Extension Professor, Utah State University Extension - Salt Lake County
How should parents teach children about the importance of budgeting?
“A great way to teach children about budgeting is to get them involved with your budgeting process. This does not mean creating anxiety in children by exposing them to every detail of the budget, but explaining why, and how, you are budgeting can help create buy-in from everyone. Giving children control over one section of the budget can be especially beneficial. This could be a category such as entertainment or clothing. Explain the size of the budget for this category and see what creative ways they develop to stay within that budget.”
Mark Scanlan – Professor, Stephen F Austin State University
“There are so many great ways to teach children about budgeting! You can use children's stories and activities to help kids learn about the value of money and the importance of budgeting. The Consumer Financial Protection Bureau has some great resources for that through their Money as You Grow Bookshelf. You can also find ways to, as much as you feel comfortable, share your own budgeting process with your children. For example, at the grocery store, you might show how you can buy the same thing from different companies but pay different amounts or compare the cost to buy something or make it yourself. The idea is to let kids see a bit of your thought process and how you make decisions about when to spend, how much to spend, when to save, and what to save for.”
Carrie Sorenson, MPH, AFC® – Family and Consumer Sciences Educator, University of Maryland Extension
5 Tips for Better Budgeting
- Start with a plan: You're more likely to succeed and stay on track if you have a solid plan. The budgeting process involves gathering information about your finances, setting goals for what you want to accomplish, allocating money based on how essential each expense is and tracking your progress. Understanding budgeting is important because it can help stop you from overspending, improve your credit score, prepare you for the future and more.
- Use free budgeting tools: You can take advantage of online budgeting tools to build your ideal budget, whether you prefer to micromanage every expense or just create a few general categories.
- Keep your priorities straight: Your monthly debt payoff should be your first priority. Then comes essential expenses, like bills, groceries, and gas, along with saving money for the future. Only after these things are taken care of should you allocate money for “wants.”
- Try out different budgeting methods: There are a variety of budgeting strategies you can use, and the best one may differ from person to person. Some strategies (like the 50/30/20 budget) recommend spending specific percentages of your budget on needs, wants and savings, while others emphasize making sure every dollar is accounted for (zero-based budgeting method) or focus on setting strict spending limits on different spending categories (envelope method). The key is to find out which one works best for you.
- Stick to your budget: Track your spending on a daily basis so you constantly know your progress, or just sync your bank accounts and credit cards with a budgeting app. In addition, keep your long-term budget goals written down in a place where you’ll see them often, and partner with a family member or friend to hold each other accountable.
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