Colorado Springs residents are facing smaller holiday spending budgets compared with other cities of similar size, according to a new study.

The study, released Thursday by finance website WalletHub, calculated the maximum holiday budget for 570 U.S. cities using five key characteristics of the population, such as income, age and savings-to-monthly expenses ratio. Colorado Springs came in at No. 324 with a maximum budget of $644, according to the study.

Shoppers in the No. 1 city, Palo Alto, Calif., have a maximum budget of $3,160, while Providence, R.I., came in last with a budget of only $111.

WalletHub’s calculation is based on its proprietary algorithm, which takes five factors — income, age, debt-to-income ratio, monthly income-to-expenses ratio, and savings-to-monthly-expenses ratio — to determine the holiday budgets for a particular city.

The algorithm considers a consumer to be in a comfortable financial position to engage in holiday spending if they have enough emergency savings to cover at least six months of expenses, as well as a debt-to-income ratio smaller than 22 percent for a renter or 43 percent for a homeowner, according to the study.

Depending on a city’s specific characteristics, the algorithm adjusts upward or downward to create a custom estimate, WalletHub reported.

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The National Retail Federation predicts that 2019 holiday spending will increase by about 4 percent from 2018, with retail sales totaling nearly $730 billion excluding car dealers, gas and restaurants, according to the study.

“Although spending a little extra around the holidays might seem negligible, it’s important to put it in the context of American spending, and credit card debt, as a whole,” the study read. “In 2019, the average household credit card debt is $8,602, according to WalletHub’s data.

“At the beginning of the year, there was over $1 trillion in total credit card debt, and WalletHub projects a $70 billion net increase this year.”

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