With the cost of living skyrocketing over the past few years, Americans are tightening their belts like never before. And according to a new report from WalletHub, states like Massachusetts and Rhode Island are leading the charge in responsible budgeting. The report, which ranks the best and worst budgeters in 2024, highlights where Americans are excelling at managing their finances—and where there’s room for improvement.
Massachusetts Ranks Third Overall for Budgeting
Bay Staters are proving themselves to be financial wizards, earning the third spot for best budgeters in the nation. Massachusetts residents boast some of the lowest debt levels across multiple categories. The state claims the lowest median credit card debt and the least car loan debt per person, with credit card debt clocking in at just 4% of the median income, while car loan debt stands at 20%.
In addition to keeping their debt in check, Massachusetts residents flaunt high credit scores, with a median score of 742—the fourth-highest in the U.S. This near-excellent score reflects a commitment to sound financial practices. What’s more, nearly 60% of residents have an emergency fund in place, landing Massachusetts fourth in the nation for preparedness.
Rhode Island: The Small State with Big Budgeters
Rhode Island isn’t far behind its neighbor, securing the fourth spot on WalletHub’s overall ranking. The Ocean State has some impressive stats, including the fifth-lowest non-mortgage debt as a percentage of income and the fourth-lowest foreclosure rate nationwide.
Rhode Islanders also manage their credit smartly, ranking 11th for credit utilization, a critical factor in maintaining healthy credit scores. With lower housing expenses as a percentage of home price and strong savings habits, the state’s residents are demonstrating solid financial planning despite the challenges of today’s economy.
Budgeting Lessons for the Rest of the Country
According to WalletHub’s findings, states like Massachusetts and Rhode Island can teach the rest of the nation a thing or two about budgeting. The report notes that a staggering 1 in 5 Americans aren’t fully honest with themselves when setting a budget, highlighting a significant area for improvement. WalletHub’s research compared all 50 states across 12 key financial metrics, including credit scores, debt-to-income ratios, and foreclosure rates.
So, while the cost of living keeps rising, the residents of Massachusetts and Rhode Island are proving that smart budgeting can make a world of difference.
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