With strong money management being essential for financial success, the personal-finance company WalletHub has published its report on the Cities Where People Have the Best Money Management Skills, as well as expert commentary.
To identify where Americans are most skilled at managing their finances, WalletHub analyzed over 2,500 cities using 10 key indicators of money-management ability. The data set ranges from the median credit score to the average number of late payments to the mortgage debt-to-income ratio.
| Cities with Best Money-Management Skills | Cities with Worst Money-Management Skills |
| 1. Cupertino, CA | 2534. Canton, MS |
| 2. Los Altos, CA | 2535. Hinesville, GA |
| 3. Lexington, MA | 2536. Raeford, NC |
| 4. Scarsdale, NY | 2537. Lithonia, GA |
| 5. Palo Alto, CA | 2538. Tolleson, AZ |
| 6. Redmond, WA | 2539. Hampton, GA |
| 7. Mountain View, CA | 2540. Davenport, FL |
| 8. Sunnyvale, CA | 2541. Elgin, SC |
| 9. Saratoga, CA | 2542. Bastrop, LA |
| 10. Foster City, CA | 2543. Jackson, GA |
Readers who are curious to know how their money-management skills compare with those of the average person in their city can view an analysis of their free credit score through WalletHub.
“Many Americans have unfortunately never been taught good money management skills, but it’s never too late to learn. Our study found that in the cities where people are best at money management, residents have significantly higher credit scores than average, well into the excellent credit range. This is due to a combination of low debt-to-income ratios, restrained credit utilization, and low rates of late payments and delinquency.”
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“Cupertino, CA, is the city where people have the best money management skills, in part because residents’ credit card debts are extremely low compared to their incomes. In fact, the median credit card debt ($2,881) is only 1.5% of the median income ($192,548), which is the lowest ratio in the country. This indicates that many people keep their utilization very low and pay their balance off every month. In fact, Cupertino residents only use around 25% of their available credit, the fifth-lowest percentage in the country. They have the seventh-fewest late payments per person in the past 12 months, and the fifth-lowest debt delinquency rate. The median credit score in Cupertino is 778, very firmly into the excellent credit range.”
- Chip Lupo, WalletHub Analyst
Expert Commentary
Should financial skills be taught as a mandatory part of the high school curriculum?
“Absolutely, and 30 states have made the wise decision to pass laws requiring a full semester of personal finance instruction as a graduation requirement… Financial management is an essential life skill and high school courses can help students build wealth and prevent costly mistakes such as overspending and making minimum payments on credit cards.”
Barbara O'Neill, Ph.D., CFP®, CRPC, AFC®, CFEd, CPFFE – Distinguished Professor Emerita, Rutgers University
“Yes absolutely. Giving students a background in income and career preparation, teaching skills for money management, addressing the importance of saving and building credit, understanding the wealth-building tool that is investing, and learning how to manage financial risk are just a few of the topics taught in Utah’s required high school financial literacy course. The value of effectively incorporating these concepts in applied classroom settings cannot be understated. These skills provide the foundation for long-term financial success.”
Amanda H. Christensen, AFC – Professor, Utah State University Extension
What is the most common mistake people make when it comes to managing their money?
“They don’t have a budget. A budget sends up warning signs that you are overspending on certain expenses. This allows you to adjust your spending habits. A budget also allows you to plan for retirement. While you can make an argument that not saving for retirement is a common mistake, with 45% of Americans having no retirement accounts, it is nearly impossible to set aside money every month for retirement without a budget.”
Dean Smith, EdD, MBA – Senior Director of Student Centers for Student Life, East Carolina University
“The most common mistake people make with money is assuming they’ll deal with it later. Many people don’t actively manage their finances until a problem arises, allowing everyday spending and debt to grow unchecked… Ultimately, financial difficulties often stem from inattention, rather than insufficient income. Without a plan, even manageable finances can slowly drift off course.”
Andrew Burnstine, Ph.D. – Associate Professor, Lynn University
What is the best way for parents to teach their children how to manage money?
“In the absence of financial literacy being taught in high school, parents are a child's only resource for how to manage money. Start them off with a savings account, and have them plan for a long-term purchase of something they desire. There are now apps that help children learn financial management by rewarding them financially for completing homework or chores. Start teaching them good financial habits early.”
Dean Smith, EdD, MBA – Senior Director of Student Centers for Student Life, East Carolina University
“The most effective way for parents to teach children about money is to make it an integral part of everyday life. Kids learn more from observation and experience than from formal lessons or rules. A simple approach is to give children a small allowance tied to responsibility and show them how to split it between spending, saving, and giving. Letting a child save for a toy, decide whether something is worth the cost, or experience the disappointment of running out of money teaches consequences in a low-risk way… Ultimately, effective financial education is about consistency, not complexity. When children regularly see and practice healthy financial behavior, those habits tend to follow them into adulthood.”
Andrew Burnstine, Ph.D. – Associate Professor, Lynn University
6 Tips for Improving Your Money Management
- Practice making and sticking to a budget: One of the best ways to develop your money management skills is learning how to budget. Carefully creating a budget to plan out how you spend each dollar of your income will help you pay your bills on time while also meeting financial goals like paying down debt or saving for the future.
- Try WalletHub’s Island Approach: The Island Approach involves using each credit card for a dedicated purpose. For example, you should make all of your everyday purchases on a good rewards credit card and only finance big purchases on a card with a 0% introductory APR, if possible.
- Pay off all credit cards in full: A credit card has a minimum amount that you’re required to pay every month, but usually lets you carry a balance. Unless your card has a 0% APR, you should strive to pay off your entire balance in full before your monthly due date. In most cases, that will allow you to avoid interest entirely.
- Monitor your credit and spending: Make sure to check your credit score and credit report for free, both to see your progress and to catch any errors. Some sites, such as WalletHub, also may give you personalized advice on how to improve your finances. You can also sync your financial accounts to automatically track your spending and get alerts about big changes.
- Improve your financial literacy: Read articles on the topic of money management and talk with your friends and family to discuss what strategies have worked best for them. Take a quiz to find out your financial literacy level and learn some new facts along the way.
- Build an emergency fund: Sometimes, even people with the best money management skills will have a month where they can’t pay all of their expenses due to an unforeseen situation. In that case, it’s important to have an emergency fund to dip into so you don’t have to borrow money. Try putting aside money for this fund every month until you have enough stored to pay for at least six months’ worth of expenses (12 would be even better).
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