What made you choose where you’re living right now? Maybe it’s where your parents and grandparents settled, so it’s home for you, too. Perhaps it was the only place you could find a job after college, or maybe you threw a dart at a map and ended up where you are. No matter where your location is, you can guarantee that it’s playing a role in your financial stability.
To get an idea of which locations in the country are more prone to money problems, personal finance website WalletHub analyzed the 150 largest metro areas in the United States according to several factors. The five major categories included rankings for each city’s credit score, spending, savings, risk exposure, and earning power — ultimately ending in a cumulative score of that city’s “WalletFitness.”
Not surprisingly, certain factors about each city determine how many of its citizens struggle with money issues. “Location matters majorly due to maximizing your earning power,” WalletHub analyst Jill Gonzalez told The Cheat Sheet in an interview. The unemployment rate, earnings gap between men and women, and poverty rates — often uncontrollable by most employees — can drastically affect take-home pay.
Sadly, that only encompasses one of the five major rankings categories WalletHub took into account. Credit scores also matter a great deal, as do factors like whether someone has the proper health insurance and is saving for emergencies and for retirement. A city might not control what’s in your bank account directly, but your location can still affect those items.
Comparing your wallet to your city
Even if you don’t plan to move to some of the cities that offer greater financial advantages, it can be helpful to at least see how you compare to the average outlook in your area, Gonzalez said. “This is still a great tool to see if you are on par with your city,” she said, noting that being in line with the average credit score can be particularly important. Having a better score than others in your area will ensure you get better deals on refinancing or other loans, as well as a leg up if employers in your job search are evaluating your credit report.
What’s more, avoiding debt with those lines of credit can make sure you’re able to save money, instead of spending it all on minimum monthly payments. This is especially notable during this time of year, when holiday spending can quickly spiral out of control. “Credit card debt really tends to mount up, and then people start 2017 off on a pretty bad note financially,” Gonzalez noted.
Want to see how your city stacks up — and where you might want to think about moving to? Here are the worst and best cities for your wallet.
10. Columbus, Georgia
This city, which is southwest of Atlanta, isn’t earning any stellar marks from WalletHub’s analysis on the residents’ ability to have healthy wallets. Residents aren’t saving much money, and their risk exposure was high — a category that includes whether residents have health insurance or have negative equity in their homes, as well as the ranking of the city’s unemployment and poverty rates.
9. New Orleans, Louisiana
This city might have Mardi Gras to its name and the best beignets this side of the Atlantic, but its residents are at a high risk for money problems, according to WalletHub’s report. The city scored poorly in all five categories, but was especially lackluster in the credit standing and responsible spending areas — both of which factor in the amount of debt residents have.
8. Detroit, Michigan
Detroit lands itself on almost every list of this type these days — but in this analysis, it’s only the seventh-worst city in the country for WalletFitness. The city actually ranked in the top 50 for the responsible spending and savings categories, but scored dismally in the credit, risk exposure, and earning power rankings. In WalletHub’s analysis, earning power is affected most by median income, but also takes factors like income growth and underemployment into account. What’s more, Detroit ranked as the worst city in the report for credit scores.
7. Laredo, Texas
Best known as a border town on the Rio Grande, Laredo isn’t doing well in terms of wallet fitness. The city has the second-worst rate of citizens without health insurance in the study, so it’s not a surprise that it scores second-to-last in the risk exposure category. The city also scored especially poorly in its savings rankings.
6. San Bernadino, California
Located due east of Los Angeles, San Bernadino ranked as the No. 6 worst city in America for financial promise. The city has one of the worst average credit scores in the nation, so it makes sense that it would score poorly in terms of credit scores and responsible spending. The earning power of residents in the city is also fairly low.
5. Miami, Florida
There might be plenty of sunshine in South Beach and the greater Miami area, but that sunny outlook doesn’t extend to the financial picture for many residents. Employees have one of the lowest median household incomes in the country when it’s adjusted for cost of living expenses, and also one of the lowest percentages of emergency savings in the nation, too.
4. North Las Vegas, Nevada
When it comes to breaking down metro areas, North Las Vegas is technically separate from the glitz and sparkling lights of the Vegas strip. Apparently, residents in the northern area also have a problem keeping their credit card spending in check. This region scored the worst in terms of credit standing, and didn’t place in the top 100 metros for any of the five categories.
3. Hialeah, Florida
Hialeah is located in Miami-Dade County, so it’s not a shock that it shares some financial characteristics with its South Beach neighbor. Residents in this city have the second-worst earning power in the country, along with poor savings habits and a high risk exposure.
2. Brownsville, Texas
Like Laredo, Brownsville is also a border town located in Southern Texas. The problems in Laredo are simply exacerbated a bit in Brownsville, most notably in the risk exposure category. Brownsville residents have the lowest rate of health insurance in the nation, and also one of the highest rates of non-mortgage debt.
1. Newark, New Jersey
Out of a possible 100 overall points, Newark’s WalletFitness score was just 37.38. In this case, the lowest earning power in the country was what likely tipped the scales for Newark, along with poor scores in risk exposure and credit ranking. Residents in Newark struggle with one of the lowest credit score averages in the nation, and has the lowest median household income when adjusted for the cost of living. According to an email from WalletHub, Newark’s adjusted income averages out to just $24,460 when you take living expenses into account.
10. St. Paul, Minnesota
On the flip side, WalletFitness is a much rosier picture when you head north. St. Paul ranked in the top 50 metro areas for every category except for risk management (at No. 78). The city scored especially well in the credit standing and savings rankings.
9. Minneapolis, Minnesota
You don’t have to travel far from St. Paul to get to the next best city for your wallet — the Twin Cities are alike financially, it seems. Similar to St. Paul, Minneapolis also scored well for its credit standing and savings rankings, with savings coming in at the No. 4 spot nationwide.
8. Sioux Falls, South Dakota
Sioux Falls just barely edged out Minneapolis for the No. 8 spot, with overall satisfactory rankings in all five categories. It scored the best in the earning power ranking, and evidently residents are turning that cash into a stockpile. Sioux Falls tied for second place in the highest percentage of households who are saving for financial emergencies.
7. Irvine, California
South of Los Angeles on the coast, Irvine residents are resisting credit temptation by having the second-highest average credit score in the nation. That’s likely due to controlling their spending, since they also have the second-lowest rate of non-mortgage debt in the country. Overall, Irvine scored in the top 10 for both credit standing and risk exposure.
6. Overland Park, Kansas
If you haven’t heard of Overland Park, you’ve probably heard of the larger metropolis nearby, Kansas City. Residents in Overland Park keep their credit scores in check, with the No. 5 highest average credit score in the country. The city also has one of the lowest foreclosure rates in the country, one of the lowest percentages of uninsured people, and one of the highest incomes when adjusted for the cost of living. With a No. 2 earning power rank, your money goes farther in Kansas.
5. Madison, Wisconsin
We go back North to the fifth-best city for your wallet, to Madison. The city scored in the top 50 in each of the five major category rankings, earning the No. 5 spot for best credit rating in the nation. It’s next-highest rankings were in the earning power and savings areas, suggesting that residents in Madison are generally earning enough money to cover their bills, pay for their needs, and save for the future.
4. San Jose, California
Residents in San Jose didn’t score so well in the “responsible spending” category, suggesting their mortgages threaten to be a problem. However, those same residents also snagged the No. 3 spot for risk exposure and the No. 4 ranking for credit standing, effectively landing the city as the fourth-most “wallet fit” metro in the country.
3. Seattle, Washington
Aside from being on the West Coast, Seattle and the major cities of Silicon Valley might not appear to have much in common. However, booming job markets in each of those cities are part of the explanation for why they scored so well in this WalletHub report, Gonzalez said. In particular, Seattle’s job and wage growth have both increased in recent years. To top it all off, Seattle residents earned the No. 1 spot in the savings category.
2. Fremont, California
Fremont is a smaller metro area that forms a triangle with San Francisco and San Jose, but the city shares many of the same positive financial trends. In particular, Fremont is ranked No. 1 in both the risk exposure and credit standing categories, with both responsible spending and earning power in the top 25. According to a WalletHub email, only 2.5% of residents don’t have health insurance — likely a major factor in the excellent risk exposure ranking. Not surprisingly, the city has the highest average credit score of any metro area in the study.
1. San Francisco, California
San Francisco’s job market hasn’t stopped booming yet, and that abundance of job opportunities — and high salaries — is enough to land the city in the No. 1 spot for WalletHub’s report. Residents might deal with notoriously high housing costs, but other factors like job growth and security, as well as earnings, outweigh the negatives. “Because income there is so high, and because income gross there is actually the second highest in the country, those are two factors that really did outweigh the enormous cost of living that comes with it,” Gonzalez said.
San Francisco earning particularly high marks for its average credit standing and low risk exposure, but still only earned an overall score of 71.38 out of 100 possible points. In other words, while San Francisco might have the best outlook for your wallet in many cases, there’s still much work to be done for true “WalletFitness” nationwide.