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How much do your money smarts depend on where you live?
Turns out, state policy can determine whether or not individuals receive adequate financial literacy education.
Here are the results.
A Wake Forest Middle School student learns about how to manage expenses for things like housing, transportation and food during the Reality of Money Financial Literacy Fair at the school. Photo courtesy of Wake County Public School
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
These include knowing how to balance a checkbook, paying down credit card debt and applying for a mortgage.
Plus, its important to understand inflation, budgeting, compound interest and investing strategies.
Financial literacy isnt just about understanding key financial topics.
Its also important to be financially resilient, which means being able to withstand financial downturns.
Consumption (25% of score)
Consumption measures the general financial well-being of a states population.
The median household income across all 50 states is $66,644.
Decreasing wage disparities has the potential to increase financial resiliency among a states entire population.
The average retirement savings amount across all 50 states is $427,918.
But even the top-ranking states have room for improvement.
Nebraska (#3) and Rhode Island (#10) scored low for investing and saving.
Georgia (#5) surveyed in the bottom percentile for financial knowledge.
And every top-10 state also scored well for overall general financial well-being.
Louisiana (#48) also scored the lowest of any state for financial knowledge.
California (#49) is the only state in the bottom 10 that has a state-mandated retirement plan.
Alaska (#45) prioritizes investing and saving and Hawaii (#41) has strong financial well-being.
What Can States Do to Support Financial Literacy and Resilience?
In our research, we found that states have a lot of power to support financial literacy and resilience.
Adding in a required course for high school studentsincreases the likelihood of financial resilienceand literacy in adulthood.
But many borrowers renew the loans repeatedly, causing their debt to snowball.
Currently, 23 states do not have any protections for payday loans.
That means lenders can charge exorbitant fees and interest rates to borrowers who need cash quickly.
If it were keeping pace with inflation, it would be $10.33 now.
YetOxfam America reportsthat 31.9% of Americans earn less than $15 an hour.
Turns out, you dont need a high school course although, that sure helps.
The Penny Hoarder has resources that are accessible now and free to use.
The sum of weighted scores for each category resulted in the final score that we used to rank states.
Census Bureau: Housing vacancies and homeownershipandEmpower: Average retirement savings by state.
Earning:U.S. Census Bureau: 12-month median income,U.S.
Department of Labor: Earnings disparities by race and ethnicity,U.S.
Department of Labor: Earning disparities by sexandCenter for American Progress: State salary range transparency laws.
Investing and Saving:Empower: Average retirement savings by stateandADP: State mandated retirement plans.
Department of Labor: Consolidated minimum wage table by state.
Resilience:Missouri Economic Research and Information Center: Cost of living data seriesandU.S.
Bureau of Labor Statistics: Average historic unemployment rate.
Alex Kerai is the consumer trends reporter for Clearlink, the parent company of The Penny Hoarder.
When you log into your bank account, how do your savings look?
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?