The Top 10 Personal Finance Reads of 2016

At SmartAsset, we dedicate ourselves to delivering high-quality personal finance content weekly to empower readers with actionable insights. 2016 was a year marked by economic challenges and opportunities, making it crucial to return to financial fundamentals like smart budgeting, strategic investing, and informed life decisions. Whether you’re recovering from setbacks or advancing your wealth-building journey, these top 10 reads provide timeless wisdom. Updated for today’s readers, they address rent affordability, city choices, homebuying errors, retirement planning, and more. For personalized advice, consider matching with a vetted financial advisor through SmartAsset’s free tool.

1. The Income Needed to Pay Rent in the Largest Cities

Renting in major U.S. cities demands substantial income due to soaring costs. This article analyzes how much gross annual income is required to afford rent in the top metros without exceeding the 30% housing expense rule. For instance, in

New York City

, renters need approximately $120,000 yearly to cover a one-bedroom averaging $3,000 monthly, factoring in utilities.

San Francisco

tops the list at over $130,000, driven by median rents near $3,500.

The study used data from the U.S. Census Bureau and rental platforms, revealing disparities: affordable spots like

Houston

require just $45,000 for similar units. Key takeaway: Location dictates lifestyle feasibility. Remote work trends post-2016 have somewhat eased pressures, but high-cost areas remain barriers for middle-income earners.

• Atlanta: $55,000 income for $1,400 rent.
• Los Angeles: $105,000 for $2,700 averages.
• Tip: Use rent calculators to align costs with income.

These insights urge prospective movers to budget rigorously, prioritizing cities where rent consumes under 28% of take-home pay per HUD guidelines.

2. Best Cities for Young Professionals

With remote work booming, young professionals aged 25-34 seek cities blending affordability, job markets, and vibrant social scenes. This read ranks metros by median rent under $1,500, unemployment below 5%, and entertainment density.

Austin, TX

leads with tech jobs, low 3.2% unemployment, and festivals galore, where $50,000 income covers living costs comfortably.

**Nashville, TN** follows for music culture and healthcare growth, while

Denver, CO

shines in outdoor access despite rising costs. Metrics included workforce demographics from BLS data and Yelp reviews for amenities. Avoid overpriced hubs like San Francisco unless high salaries offset rents.

Rank	City	Key Strength	Avg. Rent (1BR)
1	Austin	Tech Jobs	$1,200
2	Nashville	Entertainment	$1,100
3	Denver	Outdoor Lifestyle	$1,400

These cities foster career and social growth, ideal for building wealth early.

3. Top 10 Boomtowns of 2016

Boomtowns are economic hotspots with surging GDP, low unemployment, and inbound migration. SmartAsset ranked 572 cities using unemployment rates, GDP growth, net migration, housing appreciation, and job improvement.

San Antonio, TX

topped with 2.5% GDP growth and 1.2% population influx, fueled by military and energy sectors.

**Orlando, FL** ranked high for tourism recovery, while

Charlotte, NC

excelled in finance. These areas offer job stability and home value gains, perfect for relocators. Methodology mirrored 2015’s, ensuring apples-to-apples comparisons via Census and BEA data.

• GDP growth: Measures economic vitality.
• Net migration: Indicates desirability.
• Housing growth: Signals investment potential.

4. How Much Should I Spend on Rent?

The golden rule: Limit housing to 30% of gross income. This piece breaks it down: A $60,000 earner should cap rent at $1,500 monthly, including utilities. Exceeding invites financial strain, per CFPB studies. Exceptions for high earners in premium cities, but aim for 25% for savings room.

Tools like SmartAsset’s calculator factor taxes and debts. Post-2016 inflation has pushed averages up 20%, reinforcing discipline.

5. 5 Mistakes Homebuyers Can’t Afford to Make

Homebuying pitfalls derail dreams. Top errors: Picking wrong neighborhoods ignoring schools/commutes; skipping inspections revealing hidden defects; overborrowing beyond debt-to-income ratios (DTI under 43% ideal); ignoring closing costs (3-6% of price); rushing without pre-approval.

Avoid emotional bids in hot markets. Shop rates via multiple lenders; use Freddie Mac data for benchmarks. First-timers: Save 20% down to skip PMI.

1. Wrong neighborhood choice.
2. No home inspection.
3. Overextending budget.
4. Ignoring extra fees.
5. Not getting pre-approved.

6. How Much Should I Save for Retirement?

Fidelity recommends 10x salary by 67. For $75,000 earner: $750,000 corpus. Start early—$500/month at 25 yields $1M by 65 at 7% returns (historical S&P average). Use 401(k)s, IRAs; max employer matches.

SmartAsset’s quiz personalizes based on age, income, goals. Social Security covers ~40%; bridge gaps privately.

7. Best Cities to Get Out of Debt

Debt escape favors low-cost living, high wages. Top:

Pittsburgh

with cheap housing ($900 rent) and $55k median income;

St. Louis

for no state income tax. Analyzed cost-of-living indices vs. salaries.

8. Cities Where Homeowners Save Most on Taxes

Tax havens like

Honolulu

(high deductions) and

Anchorage

(no state income/sales tax) maximize savings. Property tax rates under 1% key.

9. SmartAsset’s Best Cities of 2016

Overall winners balanced jobs, costs, quality-of-life.

Salt Lake City

excelled in growth metrics.

10. Tips for Financial Planning

Month-by-month plans: Track spending, build emergencies (3-6 months), invest consistently. Use advisors for complexity.

Frequently Asked Questions (FAQs)

Q: How much income do I need for rent in NYC?

A: Around $120,000 gross annually for a standard one-bedroom, per 30% rule.

Q: What’s the best city for young pros?

A: Austin, TX, for jobs and affordability.

Q: How to avoid homebuying mistakes?

A: Get pre-approved, inspect thoroughly, budget extras.

Q: Retirement savings benchmark?

A: 10x salary by retirement age.

Q: Ideal rent percentage?

A: No more than 30% of gross income.

Bottom Line

These 2016 reads remain relevant for navigating finances. Apply them to thrive amid uncertainties. Use SmartAsset tools for tailored plans.