A Dallas-Fort Worth suburb scored the top spot for maximum holiday spending, according to a new study.
WalletHub used income, age, and savings-to-monthly expense ratio to determine their rankings for the 2021 Holiday Budgets By City. Flower Mound received the top spot with a $3,427 average holiday budget. Last year, the city ranked second.
“Flower Mound gets so much money to spend in their holiday budget because the median annual household income and the level of savings for the city are more than double the state median income and savings, and the debt-to-income ratio is less than 33%,” said Jill Gonzalez, WalletHub analyst. “It’s a holiday budget, so it will probably be spent mostly on gifts.”
According to WalletHub data, the median annual household income in Flower Mound is $137,285.
“Aside from having a high income, Flower Mound residents also have a considerable amount in savings, with a savings to expenses ratio of almost 5, and manageable debt,” Gonzalez told Dallas Express. “This means the city’s residents are financially responsible and comfortable enough to be able to spend so much money during the holidays.”
According to the National Retail Federation, holiday sales grew 8.3% last year. Gonzalez said that sales are expected to grow more in 2021, considering that pandemic conditions are generally improving.
“COVID will still be impacting the holidays though in a different, less direct way,” she said. “Supply chains are one of the things that have been severely affected by the pandemic. Shipping backlogs might not impact the amount spent. However, they will have an impact on delivery times, which is why residents in Texas and all over the country should consider starting their holiday shopping earlier this year.”
The WalletHub study further found that out of 570 U.S. cities, Dallas ranked at No. 365 with a spending budget of only $787.
“This means that Dallas residents are earning less money than Flower Mound residents, and they also have higher expenses,” Gonzalez said in an interview. “The median age in Flower Mound is almost 40, higher than in Dallas where it’s under 33. This could be one of the reasons why the median income is higher in Flower Mound than in Dallas.”
According to WalletHub’s study data, Dallas’ median annual household income is lower than the state median income, the debt-to-income ratio is also fairly high at almost 44%, and the monthly income-to-monthly expense ratio is 1.25, according to study data.
“Dallas’ holiday budget is below average,” Gonzalez said. “But whether it’s enough depends a lot on each household’s shopping list and budgeting capabilities. We did not anticipate what people can or want to buy for the holidays but to make the most of their tighter budget, they can look for discounts offered in stores.”
Arlington landed at No. 277 with $897 budgeted, Denton at No. 276 with $897, Fort Worth at No. 257 with $920, and Grand Prairie at No. 217 with $991.
“Their holiday budgets are low because they have low median annual household incomes, between $60,000 and $68,000, and fairly high debt to income ratios,” Gonzalez added. “To make sure these budgets are enough, the residents of these four cities should make a list of the things they want to buy for the holidays and start looking out for discounts. They could also consider alternative cheaper options for their gifts if they go over budget.”