States That Make The Grade in Financial Literacy

By Jeanne Doran

June 29, 2017

Financial literacy in the states

Improving financial literacy is an uphill battle. Last year, American consumers added $89.2 billion of new credit card debt, the biggest increase in a decade. Only two in five adults has a budget and 18% of Americans spend more than they make.

The personal finance website WalletHub looked at financial literacy state by state, keying in on 15 metrics including things like high school financial literacy assessments and the share of adults with emergency funds.

Which states do you think ranked best and worst? Let’s start with the lowest rankings. Louisiana earned a grade of D. The median credit score in the state is just 654—only a shade above what is considered poor credit. (Credit scores range from 300-850; anything under 650 is negative.)

Just 28% of Louisiana’s residents are saving money for their children’s education and less than half have an emergency fund. Some 15% don’t have bank accounts, which means they’re not earning interest and probably borrowing from high-cost non-bank lenders. Louisiana also ranked in the bottom 10 on a similar survey from Champlain College

On the other end of the spectrum, New Hampshire earned the top rank. Unbanked households in the Granite State are just 1.9% of the population, which also scored well on maintaining an emergency fund and general knowledge about insurance, investing and credit.

The WalletHub list of best states somewhat tracks the earlier findings from Champlain College, which put Minnesota at the top. Here is the WalletHub top 10:

New Hampshire

Minnesota

North Dakota

Maine

Virginia

Maryland

New Jersey

Illinois

Colorado

Montana

Interestingly, Alaska makes the top-10 list in the Champlain College study but lands in the bottom 10 with WalletHub. Here are WalletHub’s 10 least financially literate states (the worst at the top):

Louisiana

District of Columbia

Rhode Island

Kentucky

Mississippi

Oklahoma

Alaska

New Mexico

Tennessee

Nevada

Arkansas

Texas

States have begun to recognize the importance of financial literacy. Thirty-three states have pending financial literacy legislation, according to the National Conference of State Legislatures. This year, three states have enacted legislation or adopted resolutions addressing financial education issues.

Even Arkansas, which made it onto WalletHub’s list of 10 least financially literate states, has two financial education bills making their way through the legislature. That’s great news because, like a credit score, financial literacy can improve with education and vigilance.

More on financial literacy in the states:

These State Rank Best and Worst in Financial Literacy

Fighting Poverty Through Financial Education in Mississippi

Budget in Shambles, New Mexico Opts Out of Financial Education

Will Ohio Backtrack on Financial Literacy Effort

 

 

 

Posted in Latest Research on June, 2017