Financial literacy is more important now than ever. Being financially literate can help people weather the difficulties of inflation and be prepared for future crises on the scale of the Great Recession or the COVID-19 pandemic.
But how much have we learned from past mistakes, and what are we doing to help future generations avoid repeating them? Not enough, it would seem. For example, we ended 2023 with nearly $1.3 trillion in total credit card debt, and 20% to 30% of Americans don’t have a budget, depending on the generation.
It’s clear that better financial education is necessary to try to turn this trend around, and certain states are leading the way while others are lagging behind. To identify the states with the best financial literacy, WalletHub analyzed financial-education programs and consumer habits in each of the 50 states and the District of Columbia, along with the results of WalletHub’s proprietary WalletLiteracy Test. Our data set of 17 key metrics ranges from high-school financial literacy grades to the share of adults with rainy-day funds.
Cassandra Happe, WalletHub Analyst
Main Findings
Most Financially Literate States
Overall Rank | State | Total Score | WalletLiteracy Score | Financial Planning & Habits Rank | Financial Knowledge & Education Rank |
---|---|---|---|---|---|
1 | Minnesota | 72.46 | 9 | 1 | 3 |
2 | Nebraska | 69.10 | 7 | 30 | 5 |
3 | Virginia | 68.44 | 32 | 12 | 1 |
4 | Colorado | 68.28 | 10 | 2 | 18 |
5 | New Hampshire | 67.50 | 4 | 9 | 23 |
6 | New Jersey | 67.49 | 15 | 25 | 12 |
7 | Utah | 67.35 | 43 | 11 | 2 |
8 | Iowa | 67.26 | 11 | 32 | 14 |
9 | Wisconsin | 66.97 | 6 | 4 | 28 |
10 | Washington | 66.60 | 13 | 3 | 27 |
11 | Florida | 66.47 | 38 | 15 | 6 |
12 | Maryland | 66.35 | 14 | 14 | 20 |
13 | Vermont | 66.23 | 5 | 23 | 26 |
14 | Maine | 65.61 | 2 | 24 | 35 |
15 | Oregon | 65.45 | 47 | 19 | 4 |
16 | North Carolina | 65.18 | 36 | 37 | 8 |
17 | Indiana | 64.98 | 33 | 40 | 7 |
18 | Michigan | 64.85 | 21 | 26 | 17 |
19 | Delaware | 64.46 | 27 | 10 | 24 |
20 | Ohio | 64.46 | 31 | 41 | 10 |
21 | Arizona | 64.02 | 17 | 34 | 25 |
22 | Connecticut | 63.88 | 48 | 7 | 11 |
23 | North Dakota | 63.63 | 24 | 16 | 31 |
24 | Missouri | 63.61 | 41 | 44 | 9 |
25 | Massachusetts | 63.60 | 22 | 8 | 37 |
26 | West Virginia | 63.49 | 25 | 47 | 13 |
27 | Pennsylvania | 63.21 | 26 | 21 | 34 |
28 | Idaho | 63.06 | 39 | 20 | 22 |
29 | Texas | 63.04 | 42 | 36 | 15 |
30 | Illinois | 62.52 | 28 | 28 | 32 |
31 | Wyoming | 62.41 | 1 | 29 | 44 |
32 | Georgia | 61.74 | 35 | 43 | 19 |
33 | Kansas | 61.27 | 12 | 35 | 41 |
34 | New York | 60.87 | 23 | 17 | 42 |
35 | New Mexico | 60.47 | 19 | 49 | 33 |
36 | Montana | 60.25 | 3 | 38 | 47 |
37 | Hawaii | 60.24 | 20 | 6 | 46 |
38 | South Carolina | 60.18 | 30 | 33 | 38 |
39 | Rhode Island | 60.12 | 29 | 18 | 40 |
40 | Alabama | 60.10 | 45 | 42 | 21 |
41 | Nevada | 58.39 | 46 | 31 | 39 |
42 | District of Columbia | 58.14 | 18 | 13 | 49 |
43 | California | 58.05 | 40 | 5 | 48 |
44 | Louisiana | 57.72 | 44 | 48 | 29 |
45 | Mississippi | 57.70 | 34 | 51 | 30 |
46 | Tennessee | 57.63 | 49 | 39 | 36 |
47 | Alaska | 57.43 | 8 | 22 | 51 |
48 | Kentucky | 57.42 | 51 | 46 | 16 |
49 | South Dakota | 56.41 | 16 | 27 | 50 |
50 | Oklahoma | 54.29 | 37 | 50 | 45 |
51 | Arkansas | 53.16 | 50 | 45 | 43 |
Note: With the exception of “Total Score,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.
- Best
- 1. Wyoming
- 2. Maine
- 3. Montana
- 4. New Hampshire
- 5. Vermont
- Worst
- 47. Oregon
- 48. Connecticut
- 49. Tennessee
- 50. Arkansas
- 51. Kentucky
- Highest
- 1. West Virginia
- 2. Iowa
- 3. Kentucky
- 4. New Jersey
- 5. Indiana
- Lowest
- 47. Oklahoma
- 48. Alaska
- 49. Arizona
- 50. New Mexico
- 51. District of Columbia
- Highest
- 1. Hawaii
- 2. Delaware
- 3. Connecticut
- 4. Massachusetts
- 5. Rhode Island
- Lowest
- 47. Tennessee
- T-48. Arkansas
- T-48. Oklahoma
- 50. Mississippi
- 51. West Virginia
- Lowest
- 1. Utah
- T-2. Maine
- T-2. Wyoming
- 4. New Hampshire
- 5. Hawaii
- Highest
- 47. Georgia
- 48. New Mexico
- 49. Missouri
- 50. Louisiana
- 51. Mississippi
- Most
- 1. Minnesota
- T-2. Colorado
- T-2. Pennsylvania
- 4. South Dakota
- 5. Washington
- Least
- T-47. Louisiana
- T-47. Oklahoma
- 49. Ohio
- 50. Arizona
- 51. Mississippi
- Lowest
- 1. Vermont
- 2. Rhode Island
- 3. New Hampshire
- 4. Maine
- 5. Hawaii
- Highest
- 47. Louisiana
- 48. Georgia
- 49. Alabama
- 50. Mississippi
- 51. Texas
In-Depth Look at the Most Financially Literate States
Minnesota
Minnesota is the most financially literate state, with financial education baked into the K-12 curriculum and high schoolers required to take at least one personal-finance related course. Minnesota also has the lowest percentage of adults who spend more money than they make, at around 15%.
Minnesotans’ good financial literacy is demonstrated by the fact that they have the highest median credit score in the country, at 749. That’s just one point below the excellent credit range, and it shows that residents are handling credit very responsibly, including paying on time and keeping their utilization low.
Due to their good financial education and solid habits, around 37% of Minnesotans are confident in their ability to achieve their financial goals. While that may not seem like a lot, it’s actually the second-highest percentage in the country.
Nebraska
Nebraska is the second-most financially literate state, and this starts at a young age, with students in the state required to take at least one personal-finance class, and additional financial education being part of the K-12 curriculum.
Nebraskans also score well on WalletHub’s WalletLiteracy Test, with residents having the seventh-highest average score in the nation. This test is a great way to check your financial knowledge and even learn a few new things along the way.
The median credit score in Nebraska is 734, well into the good credit range, and residents easily have the potential to reach excellent credit (a score of 750+) with continued responsible behavior.
Virginia
Virginia is the third-most financially literate state, and one way that’s demonstrated is the fact that very few households don’t have a bank account, at just 1.8%. In other states, anywhere from 2% to 11% of households don’t have one.
One contributing factor to why Virginia residents are financially literate is the fact that many people have pursued higher education. Virginia has the eighth-highest rate of people aged 25+ who have at least a bachelor’s degree, at 41%.
Like the other top states, Virginia also requires education on personal finance in schools.
Detailed Findings
WalletLiteracy Score by Gender
WalletLiteracy Score by Income
WalletLiteracy Score by Marital Status
WalletLiteracy Score by Race
WalletLiteracy Score by Education Level
WalletLiteracy Score by Age
Correlation Analysis
Note: The size of bubble represents the state’s GDP per capita.
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.
- What should policymakers do to improve financial literacy?
- How can parents equip their kids with financial know-how?
- 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?
- What's the right balance between expecting consumers to educate themselves versus regulating financial service providers?
- What are some important tips for managing personal finances during the current economic environment with significant inflation?
Ask the 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 Test” 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 Test 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 and older. - Share of Adults with Rainy-Day Funds: Triple Weight (~5.00 Points)
Note: “Adults” include the population aged 18 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 and older. - Share of Adults Who are Confident in Achieving Long Term Financial Goals: Full Weight (~1.67 Points)
Note: “Adults” include the population aged 18 and older. - Share of Adults whose Household has a Budget: Full Weight (~1.67 Points)
Note: “Adults” include the population aged 18 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 and older. - Share of Adults Paying Only Minimum on Credit Card(s): Full Weight (~1.67 Points)
Note: “Adults” include the population aged 18 and older. - Share of Adults Who Compare Credit Cards Before Applying: Full Weight (~1.67 Points)
Note: “Adults” include the population aged 18 and older.
Financial Knowledge & Education – Total Points: 25
- High-School Financial Literacy Grade: Double Weight (~9.09 Points)
Note: Based on The American Public Education Foundation’s “The Nation’s Report Card”. - 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 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 and older.
Wallethub’s ‘WalletLiteracy Test’ Score – Total Points: 50
The results displayed below were calculated based on the grades earned by respondents to WalletHub’s WalletLiteracy Test. We collected a total of 42,405 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 |
Sources: Data used to create this ranking were collected as of March 13, 2024 from the U.S. Census Bureau, National Center for Education Statistics, TransUnion, Federal Deposit Insurance Corporation, FINRA Investor Education Foundation, National Telecommunications and Information Administration, American Public Education Foundation, Council for Economic Education and WalletHub research.
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