Living in Debt

How much debt do Austinites live with? The numbers are staggering

How much debt do Austinites live with? The numbers are staggering

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Austin's high debt ratios are cause for concern. Photo via LivingDice.com

Rent, car payments, student loans. Bills suck, but they’re part of everyday life. A new report from WalletHub shines a light on the state of individual finances in America and reveals that things aren't so hot across Texas.

With debt plaguing our nation, the financial website examined a host of U.S. cities to determine 2016’s best and worst cities at managing money. Credit card debt, mortgage debt, and number of late payments were among the factors considered.

Austin ranks in the 58th percentile nationwide. This is the highest ranking among major Texas cities, but there's no reason to celebrate. Some Austin statistics should be cause for concern, specifically our high debt ratios. We have a 738 percent mortgage debt-to-income ratio, a 61 percent car loan debt-to-income ratio, and a 99.7 percent student loan debt-to-income ratio.

Additionally, we use almost 40 percent of our credit limit on average and have an average credit score of 666. (The average credit score in the U.S. is 668, considered “fair” by standard scoring models.)

Finances across Texas are in even worse shape. Rio Grande City, Lancaster, and Killeen are among the worst cities in the nation, landing in the 1 percentile for money management. Our neighbors in San Antonio didn’t fare much better, ranking in the 10th percentile. San Antonians are docked for the number of late payments each month (4.5 average); student loans (110 percent debt-to-income ratio); and their credit score of 644, considered “poor” by national standards.

Houston, Dallas, and Fort Worth place in the 30th, 29th, and 27th percentiles, respectively, and each city has a "poor" credit score.

We may want to take a lesson from California as four of the five top cities for managing money — each ranking in the 99th percentile — are in the Golden State. The worst cities at staying on top of finances are Pullman, Washington; College Park, Maryland; Gettysburg, Pennsylvania; Athens, Ohio; and Boone, North Carolina. 

WalletHub points out that the inability to successfully manage money starts at a young age. The website argues that the accountability falls on parents and schools to educate children on being financially responsible. While this is valuable advice, we wouldn’t be upset if the government decided to erase student debt either.