Posted by: John S Kiernan

After the Great Recession, it became clear that more people needed to learn financial literacy. The housing-market collapse and following financial crisis reminded Americans of our obsession with debt and the dangers of quick access to finances for under-informed consumers.

But how much have we learned since, and what are we doing to help future generations avoid repeating our mistakes?

Not enough, it would seem. We ended 2018 with $67 billion in new credit-card debt. That’s unsurprising, considering that only two in five adults actually have a budget. Total American credit card debt passed $1 trillion for the first time ever in 2018, so it’s clear that better financial education is necessary to try to turn this trend around. But the problems aren’t as pronounced in every state; some are more responsible than others.

In order to find the states with the best financial literacy, WalletHub analyzed financial-education programs and consumer habits — combined with the results of WalletHub’s proprietary WalletLiteracy Survey — in each of the 50 states and the District of Columbia. Our data set of 17 key metrics ranges from high-school financial literacy grade to share of adults with rainy-day funds. Read on for the results, insight from a panel of experts and a complete description of our methodology.

1. Main Findings
2. Detailed Findings
3. Correlation Analysis
4. Ask the Experts: Fostering U.S. Financial Literacy
5. Methodology

 

Main Findings

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-geochart1-2019.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>  

Most Financially Literate States

Overall Rank*	State	Total Score	‘WalletLiteracy’ Rank	‘Financial Planning & Habits’ Rank	‘Financial Knowledge & Education’ Rank
1	Virginia	68.03	28	7	2
2	Utah	67.97	46	3	1
3	New Hampshire	67.36	7	1	8
4	New Jersey	66.79	10	13	5
5	Minnesota	65.72	5	6	9
6	Maryland	65.68	14	15	6
7	Maine	65.09	1	19	13
8	Colorado	64.30	6	9	16
9	North Dakota	63.68	32	5	10
10	New York	63.02	12	18	18
11	Illinois	62.97	13	30	11
12	Michigan	62.58	22	8	20
13	Nebraska	62.06	16	16	24
14	Alabama	61.80	44	25	7
15	Iowa	61.66	29	20	19
16	Ohio	61.59	26	23	17
17	North Carolina	61.50	20	39	15
18	Washington	61.45	21	14	28
19	Arizona	61.35	15	26	25
20	Kansas	61.21	11	38	27
21	Wisconsin	60.97	3	12	40
22	Tennessee	60.67	50	40	3
23	Florida	60.61	24	31	23
24	Montana	60.51	2	28	37
25	Texas	60.42	40	36	12
26	Connecticut	60.38	4	24	36
27	Missouri	60.25	47	47	4
28	Vermont	60.15	18	35	30
29	Georgia	59.80	37	32	22
30	Oregon	59.79	25	33	29
31	Massachusetts	59.52	35	4	38
32	South Carolina	59.49	38	42	21
33	Idaho	59.01	45	10	26
34	Indiana	59.00	17	43	33
35	Wyoming	58.78	19	17	42
36	Pennsylvania	58.04	9	27	46
37	California	57.98	34	2	49
38	West Virginia	57.80	8	50	31
39	Nevada	57.79	42	11	35
40	District of Columbia	57.75	27	29	41
41	Arkansas	56.40	51	41	14
42	Rhode Island	56.15	39	21	46
43	South Dakota	56.06	36	34	44
44	Hawaii	55.82	33	22	50
45	Kentucky	55.47	48	44	32
46	Oklahoma	55.45	41	46	34
47	New Mexico	54.98	23	48	45
48	Delaware	54.83	31	45	43
49	Mississippi	54.58	30	51	39
50	Alaska	53.11	43	37	51
51	Louisiana	51.01	49	49	48

*1=Most Financially Literate

   

Detailed Findings Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar1.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar2.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar8.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar3.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar4.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-bar5.html" width="450" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:450px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Correlation Analysis

Note: The size of bubble represents the state’s GDP per capita. Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-correl1.html" width="700" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:700px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/3337/financial-literacy-correl2.html" width="700" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:700px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2q41RI1>

 

 

Ask the Experts: Fostering Financial Literacy in the U.S.

Financial literacy is a growing area of focus for academics, from public-school policymakers to university researchers. For insight into the current state of financial literacy as well as what the federal government, states and parents can do to help society improve, we turned to a select group of educators. You can read their bios and responses below.

1. What should policymakers do to improve financial literacy?
2. How can parents equip their kids with financial know-how?
3. To what degree should financial literacy be a part of the K-12 curriculum? What are the most effective ways to teach financial concepts in schools?
4. What's the right balance between expecting consumers to educate themselves versus regulating financial service providers?

< >

• Forrest Baumhover Certified Financial Planner and Owner of Westchase Financial Planning
• Daniel B. Moisand Principal and Financial Advisor at Moisand Fitzgerald Tamayo
• Julio Rivas-Aguilar Assistant Professor in the College of Business at Lipscomb University
• Steven D. Podnos Principal at Wealth Care
• Robert Klosterman Founder & Advisor at White Oaks Wealth Advisors
• Victor Ricciardi Assistant Professor of Financial Management at Goucher College and Co-Editor of "Financial Behavior: Players, Services, Products, and Markets"

More Experts

Methodology

In order to distinguish the most financially literate states from the least, WalletHub compared the 50 states and the District of Columbia across three key dimensions: 1) WalletHub’s “WalletLiteracy Survey” Score, 2) Financial Planning & Habits and 3) Financial Knowledge & Education.

We evaluated those dimensions using 17 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest level of financial literacy.

We then determined each state’s weighted average across all metrics to calculate its overall score and combined those results with the responses to our WalletLiteracy Survey to rank-order our sample.

Financial Planning & Habits – Total Points: 25

• Median Credit Score: Full Weight (~1.67 Points)
• Share of Adults Who Spend More than They Earn: Triple Weight (~5.00 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults with Rainy-Day Funds: Triple Weight (~5.00 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults Who Save for Their Children’s College Education: Double Weight (~3.33 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults Who Try to Achieve Long Term Financial Goals: Full Weight (~1.67 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults whose Household has a Budget: Full Weight (~1.67 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Unbanked Households: Full Weight (~1.67 Points)
• Share of Adults Borrowing from Nonbank Lenders: Full Weight (~1.67 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults Paying Only Minimum on Credit Card(s): Full Weight (~1.67 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults Who Compare Credit Cards Before Applying: Full Weight (~1.67 Points)Note: “Adults” include the population aged 18 years and older.

Financial Knowledge & Education – Total Points: 25

• High-School Financial Literacy Grade: Double Weight (~9.09 Points)Note: Based on Champlain College’s 2017 National Report Card on State Efforts to Improve Financial Literacy in High Schools
• Public High-School Graduation Rate: Full Weight (~4.55 Points)
• Share of Students Required to Take at Least One Personal Finance Course: Half Weight (~2.27 Points)
• Share of Adults Who Attended Financial-Education Classes or Counselling Sessions in Past 12 Months: Half Weight (~2.27 Points)Note: “Adults” include the population aged 18 years and older.
• Share of Adults Using Online Financial Services: Half Weight (~2.27 Points)
• Share of Adults with at Least a Bachelor’s Degree: Full Weight (~4.55 Points)Note: “Adults” include the population aged 25 years and older.

Wallethub’s ‘WalletLiteracy Survey’ Score – Total Points: 50

The results displayed below were calculated based on the grades earned by respondents to WalletHub’s WalletLiteracy Survey. We collected a total of 21,018 responses nationally. The sample employed was based on WalletHub’s community of members.

The following scale determined each state’s WalletLiteracy grade:

Average Grade	Corresponding Score
A+	100.0
A	91.7
A-	83.3
B+	75.0
B	66.7
B-	58.3
C+	50.0
C	41.7
C-	33.3
D+	25.0
D	16.7
D-	8.3
F	0

Videos for News Use:

• YouTube (for web embedding National)
• Raw files (for editing into clips)

 

Sources: Data used create this ranking were collected from the U.S. Census Bureau, National Center for Education Statistics, TransUnion, Federal Deposit Insurance Corporation, FINRA Investor Education Foundation, Champlain College Incorporated, National Telecommunications and Information Administration, Visual Capitalist and WalletHub research.

Image: mHanafiAhmad / Shutterstock.com

from Wallet HubWallet Hub


via Finance Xpress