New Hampshire and Utah top a new study about financial literacy, and those two states’ education systems are a big reason for their high rankings.
The study was released by personal financial website WalletHub. Financial literacy is defined as understanding how money works in the world, how someone earns and spends it, and proper management of it.
New Hampshire had the smallest high school dropout rate among the 50 states, just 1.2%. Its overall education ranking was fifth in the country and it was first in both main sub-categories: knowledge & education and planning & daily habits.
Utah was No. 2 on the list, ranking No. 1 in high school financial literacy scores based on a test created by Champlain
In addition to the ninth-best return on investment from the state government for taxes that citizens pay, Utah also ranks 10th in number of citizen’s with at least a bachelor’s degree, 16th in lowest high school dropout rate and 19th in number of citizens whose expenditures exceed their income, reports Lee Davidson for The Salt Lake Tribune. Virginia and New Jersey are third and fourth in the overall rankings, respectively.
The state that received the lowest overall score was Mississippi, reports Jeff Ayres for The Clarion Ledger. It is No. 49 in the number of residents with a bachelor’s degree, sufficient financial-literacy skills, and percentage of residents whose expenditures are more than their income and people with an rainy day fund. Mississippi is also No. 50 in people who drop out from high school and No. 45 in the percentage of state citizens who borrow money from non-bank lenders. Ayres writes:
That’s why Mississippi needs to seize upon the lone bright spot in the WalletHub study, a No. 21 ranking in high school financial literacy programs. Groups like the Mississippi Council on Economic Education and the Mississippi Economic Council, to say nothing of grass-roots-level nonprofits and community groups statewide, have done sterling work in promoting the need for financial skills to be taught in the classroom as well as the broader links between a quality education and professional success after graduation.
The study’s rankings were based on factors such as financial planning, savings, and education. Other factors include whether or not citizens had a rainy day fund and if they spent more than their income. WalletHub did its study by investigating financial education classes and the financial habits of citizens in each of the 50 states as well as the District of Columbia.
Since the beginning of 2012, the study found that the nation has accumulated a total of over $73 billion in new credit card debt. This comes as no surprise since only two in five adults does a budget every month. Around 19% of Americans’ expediters exceed their income and 60% of Americans do not save for a rainy day, writes John S. Kiernan for WalletHub.