Say the word “budget” to someone, and you’ll probably get a reaction that’s somewhere between an exasperated groan and a bewildered stare. After all, making and sticking to a budget is hard for pretty much everyone to do — and depending on where you live, it may be harder for you than most, a new study suggests.
Card Hub — an online credit card resource — reveals the cities where residents are best, and worst, at budgeting. To determine this ranking, Card Hub analyzed numbers like debt-to-income ratios (the amount of debt you have compared to your income), bankruptcy and foreclosure rates, and relative cost of living (see full methodology here) in the nation’s largest metropolitan areas.
10 cities with the worst budgeters
7. Las Vegas
9. Kansas City
10 cities with the best budgeters
2. New York
3. San Diego
4. San Francisco
6. Washington, D.C.
7. Los Angeles
No matter where you live, or how you feel about budgeting, you can create and stick to a budget. Here are some tips to help you do it.
1. Consider doing it online
While you can create an on-paper budget by writing down every single thing you spend money on and tracking your income, it’s a lot easier to make a budget online using a resource like Mint.com. This site securely pulls your bank account, loan and credit card information — and automatically updates that information as you spend — and shows you where you spend money.
2. Rank expenses
“Luxuries quickly become necessities for people,” says Card Hub’s CEO Odysseas Papadimitriou. “Many of the things you now think are necessities really aren’t.” Take a look at what you’re spending money on each month and rank these expenses in order of importance. Which can/can’’t you live without? Make sure you fully fund the essentials like basic housing and food, and look to make cuts in the non-essentials.
3. Create an emergency fund
Most experts recommend that people have at least six months worth of income in savings so that they have cash on hand in the event of an emergency. “One of the key things that messes people up financially is the lack of an emergency fund,” says Papadimitriou. “They may have no debt but if they don’t have this [an emergency fund], the moment they lose their job or something happens, they can’t pay their bills and everything can spin out of control.” Try to cut spending in some other areas of your life (see #2 above) so you can build up your emergency fund.