Massachusetts Home To Financial Superstars According To Study
Massachusetts is home to financial superstars, according to Wallet Hub.
With the cost of living skyrocketing, budgeting has never been more important. WalletHub just released its 2024 report on the best and worst states for budgeters, showing where Americans are thriving financially and where improvements are needed. The study compared all 50 states across 12 key factors, including credit scores, debt-to-income ratios, and foreclosure rates.
So, who’s nailing their budget?
Massachusetts residents are some of the top budgeters in the country.
The state ranked 3rd overall in the WalletHub study, thanks to strong credit scores and smart debt management.
For example, Massachusetts ranks first in non-mortgage debt as a percentage of income, meaning people there keep their credit card, car loan, and other debts low.
They’re also fantastic at keeping their housing expenses in check and using credit wisely, ranking fifth in credit utilization percentage.
Building and sticking to a budget not only helps you cover your bills but also saves and invests wisely. Over time, these habits boost your credit score and lead to long-term financial success.
Unfortunately, many people struggle with this, and WalletHub found that one in five people aren’t even honest with themselves when creating a budget.
Let’s take a closer look at how WalletHub ranked the states.
They compared metrics like average credit score, foreclosure rates, and debt-to-income ratios to get a full picture of budgeting skills across the U.S. Having a budget isn’t just nice—it’s essential.
Without it, overspending can lead to missed bills, no savings, and serious financial trouble.
Many Americans were never taught how to budget, so there’s a push to include budgeting lessons in schools. WalletHub’s analyst, Chip Lupo, thinks this could be a game-changer.
Now back to Massachusetts—what makes them so good at budgeting?
People there keep their debt levels low, with the state having some of the lowest credit card and car loan debt in the country. The median credit card debt is about 4% of the median income, while the median car loan debt is about 20%. Plus, Massachusetts residents tend to have high credit scores. The state has the fourth-highest median credit score in the U.S. at 742, just a few points shy of excellent.
On top of this, people in Massachusetts know the importance of saving for emergencies. Nearly 60% of residents have an emergency fund, giving them a cushion in case of unexpected expenses.
If you’re looking to improve your budgeting skills, here are five quick tips to help you out:
1. Create an Emergency Fund
Set aside a little money each month for emergencies. Aim for enough to cover three to six months of expenses. If that feels overwhelming, start small. The key is consistency—every bit helps!
2. Rank Your Expenses
Budgeting doesn’t mean giving up everything you love. Prioritize essential expenses first, like rent, utilities, and groceries. Then, decide what’s most important among your non-essentials, like entertainment or dining out. This way, you can still enjoy life while keeping your finances in check.
3. Try the Island Approach
This strategy helps you manage debt separately from daily expenses. Use different credit cards for different purposes. For example, you can use a rewards card for everyday spending (and pay it off monthly) while using a 0% balance transfer card to tackle debt. It’s all about optimizing how you use credit.
4. Use the Avalanche Method for Debt
When paying off debt, tackle the balance with the highest interest rate first. Pay the minimum on everything else, and put extra money toward that high-interest debt until it’s gone. Then move to the next one. This saves you the most in interest and gets you out of debt faster.
5. Don’t Forget About Savings and Investments
Yes, bills and essentials come first, but try to save or invest a little each month too. Over time, these small amounts will grow, helping you build wealth and ensuring a more comfortable future. Just don’t forget to treat yourself occasionally—saving everything and spending nothing can affect your happiness.
Budgeting might sound tricky, but with the right habits, anyone can improve. Massachusetts shows us that good budgeting doesn’t have to be complicated—just a matter of staying on top of your finances.
