Debt Consolidation

Places Where People Spend Within Their Means

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Are Americans living beyond their means? The short answer is yes.

Shockingly, the numbers find that virtually half are living paycheck to paycheck, according to a recent survey. This has roughly been the case for quite some time, despite the Great Recession ending in 2009.

LendingTree wanted to see where Americans are spending within (and beyond) their means across the U.S. Unlike last year’s study, which used combined statistical areas, this year’s results looked at smaller metropolitan statistical areas.

To determine where people can afford their financial obligations, LendingTree analysts combed through anonymized credit report data of  LendingTree users from August 2018 and compared it to the average household income from the latest U.S. Census Bureau data. The ranking of the 50 largest metro areas factored in data such as the number of credit inquiries from the past two years, the use of revolving credit lines, non-housing debt and mortgage balances.

Key findings

  • It may come as a surprise, but some of the most expensive U.S. cities have residents living within their budgets, suggesting that higher education and greater income may be the most salient factors for living within your means.
  • San Jose, Calif. (Silicon Valley), San Francisco and Raleigh, N.C., top the list for cities in which people are living within their means. High incomes help residents of San Jose and San Francisco pay their bills (despite exceptionally high housing costs), while a modest mortgage-to-income ratio gives Raleigh a big boost.
  • Residents of San Antonio, Riverside, Calif., and Las Vegas are struggling to meet their bills. We know from previous studies that people spend a lot on vehicles in San Antonio, incomes are very low in Riverside and unemployment runs high in Las Vegas.


With wages remaining roughly stagnant while health insurance premiums, student loan interest and fixed mortgage rates continue to climb, it’s easy to see why many people turn to credit for life’s necessities.

10 cities where people excel at keeping to their budgets

1. San Jose

San Jose might be in one of the most expensive states to buy a home (California ranks third in monthly mortgage payments, behind Washington, D.C., and Hawaii), but residents here have the least amount of debt among residents in the 50 largest U.S. metro areas.

The average millennial living in San Jose owes around $18,000 in non-mortgage debt, which is about $5,000 less than the average young person in the country. Among that debt, student loans — which typically accounts for 40% of young people’s total credit and loan balances — were the lowest in San Jose at 24.1%.

Aside from having the lowest non-housing debt balance — 23.5% of income versus the 50-metro average of 43.7% — residents in San Jose also have the lowest revolving credit utilization among the metro cities studied at 27.3%.

But residents here suffer from an extremely high mortgage debt balance (107% of income versus the 86.5% average of the 50 metros) due to a rising housing market. At the same time, homes in the Bay Area see the quickest turnaround for sales compared to anywhere else in the country.

2. San Francisco

Thanks to the booming tech industry, San Francisco is easily one of the most expensive places to live.

Yet, LendingTree’s data shows residents here living within their means: San Francisco residents have a revolving credit utilization of 27.4%, compared with the 50-metro average of 32.6%, and a non-housing debt balance that’s 27.7%, which is, again, well below the average of 43.7% of income.

Still, sky-high home prices mean San Francisco residents endure a mortgage debt of 123.9% of their income. This is among the highest, only behind other California cities — Sacramento (126.5%), San Diego (131.1%) and Riverside (131.1%).

With housing costs this high, how are people in San Francisco living within their means? High tech salaries in Silicon Valley make those living in San Francisco, along with their neighbors in San Jose, some of the wealthiest people in the country. The median household income here, for instance, is around $87,700, according to the U.S. Census Bureau, which is a lot higher than the national median household income of $55,300.

3. Raleigh

The capital of North Carolina is known for being one of the largest technology and scholarly hubs, fueled by the well-educated population residing in the college town. Surrounding colleges and universities include Duke University, the University of North Carolina at Chapel Hill, Wake Forest University, North Carolina State University and Shaw University.

The city has received repeated accolades: In 2011, Bloomberg ranked Raleigh the best place to live in America, making a case for the city’s ample green space and “thriving social scene.” A few years later, the American Institute for Economic Research ranked the city as a top place to live for young people, based on economic and quality-of-life factors. Last year, Raleigh landed on U.S. News & World Report’s list of the best metro areas in which to live, thanks to its strong job market and high quality of life.

Here, residents have a revolving credit utilization of 32.9%, a non-mortgage debt of 41.9% of income and a mortgage debt of 72.8% of income.

4. Minneapolis

Earlier this year, Minneapolis, along with the state’s capital, St. Paul, ranked ninth on U.S. News’ list of the “Best Affordable Places to Live.” The median annual salary in the Twin Cities is $55,010, and the average home price is just over $237,000.

There’s a good chance you’ll get a job here with an unemployment rate of 3% in Minneapolis — lower than the national rate of 4.1% — at the end of 2017. Residents in Minneapolis have a revolving credit utilization of 31.7%, a non-mortgage debt of 40.1% of income and a mortgage debt of 86.3% of income.

5. Boston

In 2016, half of all workers in Massachusetts had at least a bachelor’s degree. This is partly because the state is home to some prestigious colleges and universities, including Harvard University, Berklee College of Music, Boston College, the Massachusetts Institute of Technology (also known as MIT) and Boston University.

Additionally, many top-rated hospitals and doctors are located here, including Massachusetts General Hospital, Boston Children’s Hospital, the Dana-Farber Cancer Institute, Beth Israel Deaconess Medical Center, and Brigham and Women’s Hospital.

This historic city is great for those wanting to live in a small town with big-city perks. Boston’s higher education could mean residents aren’t struggling to make ends meet as much as the rest of the country. Residents here have a revolving credit utilization of 31.6%, a non-mortgage debt of 33.7% of income and a mortgage debt of 96.8% of income.

6. New York

In a city where people don’t blink twice over $15 cocktails, it’s true that you pay to live here. But as more and more young people opt for city life, it’s no wonder New York has been a top choice for those starting their careers and paving their own paths.

New Yorkers have a revolving credit utilization of 33.1%, a non-mortgage debt of 35% of income and a mortgage debt of 85% of income — only slightly lower than the average 86.5% average of the 50 largest U.S. metros.

7. Milwaukee

Earlier this year, Vogue magazine named Milwaukee the “coolest” and “most-underrated city.” Its affordability, highly walkable neighborhoods and “influx of new restaurants, bars, hotels and shops” is resulting in a revival, reports Vogue.

Residents living in this “unexpected gem” have a revolving credit utilization of 31.3%, a non-mortgage debt of 41.3% of income and a mortgage debt of 64.2% of income.

8. Pittsburgh

This blue-collar city — home to one of the nation’s leading robotics school, Carnegie Mellon University — has made its fair share of “best places to live” lists in recent years.

Although millennials here shoulder a high student loan debt at 45.7%, meaning education accounts for nearly half of the non-mortgage debt they owe, the city’s growing tech scene (Google and Uber have campuses here) has created job opportunities, which, when combined with affordability, has young people rethinking the gritty Rust Belt city.

Pittsburgh ranked No. 12 (behind New York) on Niche’s 2018 list of best U.S. cities for millennials, which included factors such as the percentage of millennials that moved to the area within the last year and job opportunities.

Last year’s annual CBRE Tech-30 report found Pittsburgh’s tech talent pool grew by 31.4% between 2015 and 2016, only behind San Francisco (39.4%) and Charlotte (31.6%).

Residents living in this midsized city have a revolving credit utilization of 31.5%, a non-mortgage debt of 49.2% of income and a mortgage debt of 51.8% of income.

9. Kansas City, Mo.

In 2014, the New York Times wrote that Kansas City’s “urban core has become known as a cool place to live instead of a dreary place to drive immediately away from after eight hours at the office.”

The change is due in part to a $5.5 billion investment in public and private projects, including the Kauffman Center for the Performing Arts and the Sprint Center arena. The number of residents in the central business district increased by about 50% from 2000 to 2014.

Residents in Kansas City have a revolving credit utilization of 30.8%, a non-mortgage debt of 44% of income and a mortgage debt of 70.7% of income.

10. Denver

From 2011 to 2015, some 3,200 new businesses opened in Denver, reported The Wall Street Journal. As a result of the lucrative job market, about 100,000 out-of-state residents moved into the metro area between 2010 and 2014.

The Mile High City boasts diverse jobs in prominent industries such as aerospace, biotech and health care with an average annual salary of $53,060 in 2015 — much higher than the nation’s average of $47,230 at the time. Additionally, the state’s capital is somewhat close to some of the world’s most scenic ski resorts, such as those in Aspen and Vail, for some fun after a long week of hard work.

Residents living here have a revolving credit utilization of 30.6%, a non-mortgage debt of 42.4% of income and a mortgage debt of 120.4% of income — much higher than the 86.5% average, likely due to the influx of young people relocating to the city for jobs.

How spending more than you earn can lead to trouble

Spending beyond one’s mean can be the result of poor financial habits or lack of financial education, but there are also other contributing factors such as personal crises or local economic conditions.

Whatever the reason, spending more than what one can afford can have far-reaching consequences. The longer it takes to pay off a debt, for example, the more one pays in interest. That added cost can have a compounding effect, leaving less to invest in retirement savings, college funds or a home.

Additionally, hard credit pulls and high credit utilization will lower your credit score, as does missing monthly payments. That, combined with higher debt-to-income ratios, leads to higher interest rates on future loans and credit cards. Indeed, our researchers recently reported that a lower credit score can result in tens of thousands of additional interest payments over a common array of debt types.

What to do if you’re living beyond your means

    • Consolidate loans to make monthly payments more manageable. Doing so allows you to make one payment per month on your debt as opposed to multiple payments. Consolidating all your debt could also reduce the interest rate you’re paying and help you raise your credit score.
    • Free credit report monitoring can help manage debt. Because your debt affects your credit score, monitoring it will let you know if you need to adjust your debt repayment strategy. Not taking advantage of free credit reports to monitor your score could mean you’ll miss a dip in your score. A low credit score can impact whether you’ll have to borrow at a higher interest rate later on and affect your ability to live within your means.
    • Refinance existing student, auto or mortgage debt to lower interest rates and monthly payments. Since personal loans generally have lower interest rates than credit cards, borrowing from a personal lender to pay off high-interest debt can help you get debt under control.
    • Avoid hard credit inquiries. If you’re shopping for a personal lender to consolidate loans, consider ones that use a soft pull to give you estimated rates and terms that are available to you based on your credit. If you decide to move forward with the loan, the lender will do a hard inquiry, which gives you the rare opportunity to shop for different lenders without impacting your credit. Your FICO score acknowledges the difference between multiple applications and rate shopping for a loan. As long as the inquiries are made within a focused period — typically between 14 and 30 days — the individual inquiries won’t hurt your score.
    • Make a plan to pay bills on time by adjusting your payment schedule to meet your financial obligation. For instance, if you get paid twice a month, consider splitting the lump sum of what you owe into two payments. First, add up what you owe so you can have a big-picture view of your finances, then pay half of it on one day and the remaining balance on the second payment date.
    • Take control of your budget. Know exactly how much money is coming in each month and how much you need to set aside for expenses. It can also be helpful to have your spending money in a separate account so that you’re less likely to dip into your savings or funds you need for recurring bills.


Using a sample of over 85,000 anonymized August credit reports of LendingTree, we calculated the averages of the following metrics across the 50 largest metropolitan statistical areas, or MSAs:

  • Number of credit inquiries over the past two years
  • Revolving credit utilization
  • Non-housing debt
  • Mortgage debt

To determine the percentage of non-housing debt and mortgage debt to income, those averages were divided by each metro’s average household income, reported by the U.S. Census in the five-year American Community Survey for 2016.

Each metro received a scaled score across all four metrics, which were weighted for a final score: number of credit inquiries in the past two years (20%), revolving credit utilization (20%), percentage of household income to non-housing debt balances (30%) and percentage of household income to mortgage debt balances (30%).

LendingTree accounts include a free credit monitoring service available to the general public, regardless of their debt and credit histories, or whether they’ve pursued loans on a LendingTree platform.  LendingTree has over nine million active users.

 This article may contain links to MagnifyMoney, which is a subsidiary of LendingTree.


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