Upgraded Points’ newest study highlights the most financially strained cities in the United States where residents regularly spend significantly more than the recommended budget on essential living costs and live most beyond their means. Examining major metropolitan areas to uncover the widening gap between income levels amidst rising expenses for housing, groceries, transportation, and utilities – the study gives critical insights into the growing affordability challenges urban Americans face.
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“It should come as no surprise that it’s still tough out there for Americans trying to make ends meet,” said Keri Stooksbury, editor-in-chief at Upgraded Points. “Our study paints a picture of exactly where in the country Americans are exceeding the 50% income allocation for essentials.”
Study Methodology
The study analyzed financial strain in 100 U.S. cities by evaluating how much residents exceed the recommended 50% income allocation for essential “needs.” Using BEA.gov median income data, each city’s after-tax income served as the affordability baseline. Essential expenses — rent, groceries, transportation, and utilities (including internet) — were calculated using data from sources such as Zillow, the Census Bureau, and Numbeo.
Affordability was assessed by totaling monthly expenses, comparing them to 50% of after-tax income, determining the extra annual income needed to meet the 50% rule, and calculating the percentage of income spent on essentials.
The Top 10 U.S. Cities Where Americans Are Living Most Outside of Their Means
California dominates the rankings, with 7 cities in the top 10, though Florida and New York contain major budgetary contenders:
- Riverside, California
- San Diego, California
- Stockton, California
- Los Angeles, California
- Lakeland, Florida
- Honolulu, Hawaii
- Bakersfield, California
- Fresno, California
- New York City, New York
- Sacramento, California
Financial Squeeze: Cities That Exceed the 50% Benchmark
In several U.S. cities, essential expenses consume an overwhelming percentage of residents’ income, far surpassing the recommended 50% threshold. A few of these include:
- Riverside, California – 125% of Income: Many residents dip into savings, take on debt, or sacrifice other financial priorities just to cover their basic needs.
- McAllen, Texas – 103% of Income: Essential expenses require residents to consistently exceed their means just to cover basic living costs.
- Lakeland, Florida – 102% of Income: Residents spend so much on essential needs that there is little room for savings or discretionary spending.
Visit the full study online.
