With good money management skills being crucial for financial success, the personal-finance website WalletHub recently released its report on the Cities Where People Have the Best Money Management Skills, as well as expert commentary.
Five California cities made the top 10, including the number one ranked city, Cupertino. Conversely, four cities in Georgia ranked in the bottom of the standings.
In order to determine where Americans are best at handling their finances, WalletHub compared more than 2,500 cities based on 10 key indicators of money-management skills. 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
Cupertino, California topped the list of best cities in terms of money management, followed by Palo Alto, CA at number two. The rest of the top 10 were Chevy Chase, MD; Los Altos, CA; Scarsdale NY; Sunnyvale, CA; Lexington, MA; Redmond, WA; Mountain View, CA; and McLean, VA.
Cities with Worst Money-Management Skills
In the bottom 10 were Locust Grove, Georgia, coming in at 2508; followed by Covington, GA; Hampton, GA; Park Forest, IL; Calumet City, IL; Fairburn, GA; Tolleson, AZ; Canton, MS; Dolton, IL and, coming in last, at number 2517, was Ruston, Louisiana.
“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,” said Chip Lupo, WalletHub Analyst. “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 ($2,790) is only around 1.6 percent of the median income ($178,180), which is the lowest ratio in the country. They have the third-fewest late payments per person in the past 12 months, and the third-lowest debt delinquency rate. The median credit score in Cupertino is 778, very firmly into the excellent credit range.”
Expert Commentary
Should financial skills be taught as a mandatory part of the high school curriculum?
“Yes, financial skills should be a mandatory component of high school curricula. Various studies indicate that many adults lack essential financial knowledge, leading to poor financial decisions and long-term economic challenges. Challenges include finding qualified instructors and integrating the curriculum without diminishing focus on other subjects. To address this, schools can incorporate financial literacy into courses like math or economics and utilize digital tools to make learning engaging and relevant.”
Richard Roberts – Professor, Monmouth University
What is the most common mistake people make when it comes to managing their money?
“Accountability. A budget is just a story you tell yourself until you return to it and see how real-life spending and actions compare.”
Julie Heaton – Director, Sokolov-Miller Family Financial and Life Skills Center, Pennsylvania State University
What is the best way for parents to teach their children how to manage money?
“Help your child define and achieve a savings goal for something they want to buy… Set up a savings account to help them understand the benefits of compound interest … Give an allowance – even a small one – for chores to demonstrate the value of money and hard work … Involve your child in family shopping decisions, guiding them to choose products based on quality and price … Clarify the difference between necessary expenses and discretionary spending.”
Richard Roberts – Professor, Monmouth University
“Be open and honest about your own money experience. Do your kids know how much money you make and how you spend it? Have you communicated about purchases you do or don’t make and why? Have you shared your money philosophy or history with them? These are all simple places to start. A lot of time parents forgo the personal money storytelling for more financial education vocabulary and facts. This is fine, but it misses the larger lesson which is behavior and beliefs around finances.”
Julie Heaton – Director, Sokolov-Miller Family Financial and Life Skills Center, Pennsylvania State University
