The holiday shopping season is fast approaching, and nearly 1 in 4 Americans are still working to pay off holiday debt from last year. That means careful budgeting is essential this year, but people in some cities can afford to spend more than others.
Palo Alto, CA has the highest average holiday budget of 2023 among small cities, while Bellevue, WA tops the list for medium-sized cities and San Francisco ranks first among large cities, according to a new report by the personal-finance website WalletHub. The report compared over 550 U.S. cities across five key dimensions: income, age, debt-to-income ratio, monthly income-to-expenses ratio, and savings-to-expenses ratio.
“Palo Alto, CA has the highest holiday budget among the more than 550 cities we analyzed, at $3,596, in large part because residents earn nearly twice as much as they have to pay in expenses each month. Palo Alto residents are also among the best in the nation at money management,” said Cassandra Happe, WalletHub analyst. “Bellevue, WA has the biggest holiday budget among medium-sized cities, at $3,576 on average, which is unsurprising given that it is one of the top 10 most educated cities in the country and its residents have a median household income of over $150,000. San Francisco has the highest holiday budget for large cities, at $2,313 for the average resident, due in part to the fact that the average debt-to-income ratio in the city is extremely low, at 23.9%. The Golden City is home to thousands of millionaires and dozens of billionaires, which drives up the average budget.”
Top 20 Cities With the Highest Average Holiday Budgets
| 1. Palo Alto, CA ($3,596) | 11. Santa Clara, CA ($3,269) | |
| 2. Bellevue, WA ($3,576) | 12. San Mateo, CA ($3,262) | |
| 3. Frisco, TX ($3,546) | 13. Highlands Ranch, CO ($3,224) | |
| 4. Ellicott City, MD ($3,497) | 14. Sugar Land, TX ($3,210) | |
| 5. Flower Mound, TX ($3,485) | 15. Naperville, IL ($3,184) | |
| 6. Sunnyvale, CA ($3,483) | 16. Carmel, IN ($3,116) | |
| 7. Milpitas, CA ($3,470) | 17. Roswell, GA ($3,115) | |
| 8. Mountain View, CA ($3,399) | 18. Weston, FL ($3,087) | |
| 9. Fremont, CA ($3,321) | 19. Centreville, VA ($3,040) | |
| 10. The Woodlands, TX ($3,316) | 20. Union City, CA ($3,036) |
People in the cities with the smallest holiday budgets can only afford to spend around $500-600 on average this year. Notable cities with particularly small budgets include Newark, NJ ($508), Jackson, MS ($537) and Canton, OH ($551).
“Some people can afford to spend much more than others over the holiday season, based on their income, existing debt obligations and cost of living,” Happe stated. “No matter what your budget is, it’s important to stick to it to make sure the jolliness of the holidays isn’t followed by a mountain of unsustainable debt.” For people who would like a more personalized holiday budget, WalletHub will calculate custom holiday budgets for all WalletHub members between now and Dec. 25. WalletHub aims to help people spend wisely during a time when it’s easy to go overboard.
Tips for Making a Holiday Budget
- Start Early: Begin planning your holiday budget well in advance. This gives you time to save and make thoughtful decisions about gifts, food and other expenses without last-minute pressure and inflated prices. Taking advantage of Black Friday or Cyber Monday sales can help you save a lot.
- Use a Rewards Credit Card: Putting your holiday purchases on a rewards credit card can save you a lot of money. Many cards offer initial bonuses for spending a certain amount in the first few months. You could potentially cut down your expenses by several hundred dollars. Just strive to only spend what you can afford to pay in full by the due date.
- Track Spending: Keeping track of what you’ve already spent and how much money you have left is essential if you want to ensure you stick to your budget. Having all your purchases in one place, like on a credit card, can help.
- Explore Creative Ways to Save Money: There are a lot of cost-effective ways to make the holiday season bright, such as giving thoughtful but low-cost gifts, making homemade decorations, or organizing potluck dinners instead of catering expensive meals.
