NEW MEXICO (KRQE) – Everyone is trying to cut back on expenses these days and keeping to a tight budget can make or break a household. WalletHub recently released a new report ranking the United States by how well they budget their money.
The study looks at three key dimensions: 1) Spending and debt, 2) Credit, and 3) Savings. Each category was evaluated across 12 relevant metrics, each with different weights. Some metrics include bankruptcy rate, housing expenses as a percentage of median home price, and average credit score.
New Mexico came in the bottom 10 at No. 42 regarding budgeting. We ranked No. 35 in spending and debt, No. 39 in credit, and No. 48 when it came to savings. New Mexico had an overall score of 46.49. To compare, No. 1 ranked Hawaii’s overall score is 78.81.
At the bottom of the list is Mississippi. The Magnolia State was ranked No. 50 in spending and debt, credit, as well as savings.
In the study, WalletHub suggests five tips for better budgeting:
Create an Emergency Fund – Set aside some money each month with the ultimate goal of having at least three to six months’ worth of expenses in reserve in case of extended income disruption.
Rank Your Expenses – Prioritize the most important expenses over the less essential ones.
Use the “Island Approach” – A strategy that involves isolating different types of transactions to different credit cards for the best possible combination of terms.
Use the “Avalance” method for paying off debt – Pay the minimum on everything but the balance with the highest interest rate, to which you should allocate the rest of your monthly allotment until that balance is gone.
Don’t neglect any part of your budget – Bills and other essential expenses should come first. It’s also important to try to put at least a small amount of money toward saving and/or investing each month, so that you can build your wealth and live more comfortably in the future.
