Best and Worst States for Financial Literacy in 2023

How to use this guide

• The Best States for Financial Literacy
• The Worst States for Financial Literacy
• How Can You Gauge Financial Literacy?
• Ranking Criteria for Financial Literacy
• How States Performed on Financial Literacy
• What Can States Do to Promote Financial Literacy and Resilience?
• Financial Literacy Resources
• Complete Ranking of Best and Worst States for Financial Literacy
• Methodology

How much do your financial skills depend on the state you live in?

It turns out state-level policies play a big role in whether residents get solid financial education.

To evaluate how well each state fosters financial literacy and resilience, Savinly analyzed state programs, policies and residents’ overall financial health across 27 criteria, then ranked states from highest to lowest.

Below are the findings.

The Best States for Financial Literacy

The top 10 states for financial literacy all scored above 70% overall.

10 Best States for Financial Literacy

The Worst States for Financial Literacy

The lowest-ranked states for financial literacy scored between 40% and 50% overall.

10 Worst States for Financial Literacy

How Can You Gauge Financial Literacy?

Financial literacy reflects how well someone understands essential money-management ideas that help build savings and long-term wealth. This includes being able to balance accounts, reduce credit card debt and shop for mortgages. It also covers topics like inflation, budgeting, compound interest and investing basics.

Rather than surveying every American about financial terms like FICO versus VantageScore, we concentrated on how states support financial education through policy and programs.

• Do states require high school and college courses, provide easy-to-find resources for adults, and enact consumer protections such as caps on predatory lending?

Financial literacy isn’t only knowledge — resiliency matters too. Being financially resilient means being able to handle economic shocks.

• Financial resilience became a focus after the 2009 Great Recession.
• Research since then has driven calls to require financial literacy instruction in schools.
• More recently, the COVID-19 pandemic and related economic fallout led many people to lose jobs or take pay cuts, testing their financial resilience.

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Ranking Criteria for Financial Literacy

We grouped the evaluation into six scoring categories made up of 27 criteria, such as credit scores and long-term unemployment trends. States earned points in each metric, and those points were weighted by importance to produce final scores.

Our weighting for state scores was:

• Personal Consumption (Weight = 25%)
• Earning (Weight = 10%)
• Knowledge (Weight = 2.5%)
• Investing and Savings (Weight = 2.5%)
• State Policy (Weight = 50%)
• Resilience (Weight = 10%)

This weighting emphasizes policy and programs rather than solely individual financial outcomes.

Consumption (25% of score)

Consumption captures overall financial health of a state’s residents.

• We used indicators such as average FICO credit score, credit card balances, bankruptcy filings and homeownership rates.
• We also included average payday loan APRs; states with lower APRs earned more points.

Earning (10% of score)

Individual earnings matter because state policy can affect pay outcomes for marginalized groups. The median household income across the 50 states is $66,644.

• We examined income gaps across white, Black, Native American, Asian-Pacific Islander, Hispanic/Latino and multiracial populations, plus differences between men’s and women’s earnings.
• Wage gaps were expressed as cents on the dollar a marginalized group earns compared to the average white man.

Reducing pay disparities can help boost financial resilience for an entire state.

Financial Knowledge (2.5%)

We used self-reported financial knowledge from the Financial Industry Regulatory Authority Foundation’s survey, focusing on four core concepts.

• 54% of respondents reported understanding inflation.
• 70% said they understood compound interest.
• 71% indicated familiarity with mortgage interest.
• Only 25% understood bonds and how interest rates influence bond prices.

Investing and Saving (2.5%)

We evaluated average retirement savings to assess investing and saving behavior. Nationwide average retirement savings across states is $427,918.

According to ADP, Inc., eight states currently offer state-mandated retirement plans—programs that require employers to provide retirement savings options like payroll-deducted Roth IRAs.

• Overall, 13 states have enacted state-mandated retirement plans; five of those have scheduled rollouts.
• Two additional states have passed laws but not set implementation dates yet.

State Policy Around Resilience and Education (50%)

We weighted state policy most heavily because it reflects concrete actions states take to promote financial literacy.

We referenced Next Gen Personal Finance’s 2023 State of Financial Education report to measure how many students must complete a financial literacy course to graduate and how many had access to stand-alone courses.

• Thirty-three states (66%) do not require a separate financial literacy course for graduation.

• Fewer than half of American students (43%) have access to dedicated financial literacy classes.

We also considered laws that restrict predatory payday lending and whether states automatically add to or match contributions to college savings accounts.

• Twenty-three states offer limited payday loan protections, while 18 states have stronger laws that ban payday lending or cap interest rates.
• To encourage college savings, 16 states provide direct credits through 529 plans, up to $5,400.

Finally, we considered average state minimum wages; higher minimum wages earned more points.

• Forty-six states have established a state minimum wage.
• The average state minimum wage is $10.41, over $3 above the federal baseline.

Financial Resiliency (10%)

We also measured residents’ financial resilience.

Using an affordability index, we found Mississippi to be the most affordable state and Hawaii the least affordable.

• Most costly regions were in the Northeast and West Coast, plus Hawaii and Alaska.
• Least expensive areas were concentrated in the Midwest and the South.

Reviewing historical unemployment from January 2000 to January 2023, the U.S. average unemployment rate was 5.47%.

• North Dakota recorded the lowest historical unemployment at 3.10%.
• Nevada showed the highest historical unemployment at 7.20%.

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How States Performed on Financial Literacy

The Top States for Financial Literacy

Each top-10 state stands out for different strengths.

New Hampshire (No. 1), Connecticut (No. 8) and New Jersey (No. 9) lead on investing and saving, while Maryland (No. 7) and Georgia (No. 5) rank high for earnings. Virginia (No. 2) topped the list for policies that back resilience and education; Nebraska (No. 3) and Ohio (No. 6) were close behind.

• Two top-10 states—Maryland (No. 7) and Connecticut (No. 8)—have state-mandated retirement programs.
• Nebraska (No. 3) is the only top-10 state with a perfect score for financial resilience.

Even the leaders have gaps. Virginia (No. 2), Nebraska (No. 3) and North Carolina (No. 4) showed weaker earnings. Nebraska (No. 3) and Rhode Island (No. 10) lagged in investing and saving. Georgia (No. 5) scored poorly on financial knowledge.

Still, all top-10 states have policies supporting education and resilience and scored well for overall financial well-being.

The Bottom States for Financial Literacy

The lowest-ranked states did not achieve a passing grade overall.

While we can’t claim widespread ignorance among residents, these states generally lack comprehensive state programs, policies or education that promote financial resilience and literacy.

Delaware (No. 44) and Nevada (No. 50) ranked worst for policies around resilience and education. Louisiana (No. 48) had the lowest scores for financial knowledge.

• Hawaii (No. 41) and California (No. 49) showed weaker financial resilience.
• Idaho (No. 46), Kentucky (No. 47) and Nevada (No. 50) tied for the weakest overall financial well-being.

On the plus side, Texas (No. 42), Indiana (No. 43), Idaho (No. 46) and Louisiana (No. 48) performed well on affordability and have relatively low historic unemployment. California (No. 49) is the only bottom-10 state with a state-mandated retirement plan. Alaska (No. 45) fares better on investing and saving, and Hawaii (No. 41) reports solid financial well-being.

• Delaware (No. 44) also ranks near the bottom for both financial well-being and investing and saving.

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What Can States Do to Promote Financial Literacy and Resilience?

Our analysis shows states can make meaningful improvements through policy. Requiring financial education, restricting predatory payday lending and setting livable minimum wages could significantly improve residents’ financial health.

Require Financial Literacy Instruction

Two-thirds of states do not mandate financial literacy in school curricula. Making a financial education course a graduation requirement increases the chance that students will gain financial resilience and literacy as adults.

Although many states don’t require such a course, it’s often available as an elective in high schools.

• We found that 78.7% of students can opt into a financial literacy course.
• But only 43% must complete a financial literacy course to graduate.

Cap Payday Lending

Payday loans are typically small, short-term, and very expensive loans repaid on the borrower’s next payday. Many borrowers end up renewing loans repeatedly, deepening their debt.

Currently, 23 states lack basic protections for payday loan borrowers, allowing lenders to charge very high fees and interest.

• For example, in Idaho a $500 payday loan can cost $1,000, with an average APR of 652%.

An effective approach is to follow the 18 states that have enacted strong rules banning payday lenders or capping interest, a strategy highlighted by The Pew Charitable Trusts.

• Payday lending is effectively absent in those 18 states.

Set a Livable Minimum Wage

The federal minimum wage has been $7.25 since 2009. Adjusted for inflation, it would be about $10.33 today. Many states have raised their minimum wages—averaging $10.41—but that still falls short of a livable standard for many families.

• Eighteen states have tied minimum-wage increases to cost-of-living adjustments or scheduled annual raises.

Research at MIT suggests a sustainable minimum wage for a family of four with two working adults would be $25.02. Oxfam America reports nearly 32% of workers earn under $15 an hour.

• This would be a 245% increase over the federal minimum.
• A $25.02 hourly wage equates to roughly $104,077.70 annually.

Raising the minimum wage to a livable level would help people work and save, improving their financial resilience when emergencies or downturns happen.

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Financial Literacy Resources

If your state doesn’t provide strong support for financial literacy, there are plenty of ways to learn independently. You don’t have to wait for a high school course to build money skills.

Savinly offers free, accessible resources to help.

• Understanding credit reports can be complicated, but it’s crucial if you plan to borrow or buy a home.
• Wondering what a good credit score looks like? We explain it.
• Saving for retirement is fundamental—start today with our step-by-step guide.
• Paying down debt is essential to resilience; here are strategies to tackle credit card balances.
• Need help budgeting? Our five-step budgeting guide can get you started.
• Want tips in your inbox? Sign up for Savinly’s newsletter for weekly financial guidance.

There are also government and nonprofit tools:

• For information about auto loans, mortgages and refinancing, the Consumer Financial Protection Bureau’s tools are a helpful resource.
• The National Credit Union Administration provides a range of financial literacy materials and guidance.
• The Office of the Comptroller of the Currency maintains a directory of financial literacy resources for communities.

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Complete Ranking of Best and Worst States for Financial Literacy

Full Ranking of States for Financial Literacy
Rank State Score
1 New Hampshire 79.9%
2 Virginia 79.7%
3 Nebraska 78.6%
4 North Carolina 76.0%
5 Georgia 75.0%
6 Ohio 74.6%
7 Maryland 72.0%
8 Connecticut 71.4%
9 New Jersey 70.4%
10 Rhode Island 70.1%
11 South Dakota 68.8%
12 Iowa 67.6%
13 Massachusetts 67.1%
14 Colorado 66.9%
15 Florida 66.8%
16 Missouri 66.2%
17 Vermont 65.7%
18 New Mexico 65.4%
19 Kansas 65.2%
20 West Virginia 64.3%
21 Montana 64.3%
22 Pennsylvania 64.1%
23 Michigan 62.8%
24 Utah 61.9%
25 Illinois 61.6%
26 South Carolina 61.5%
27 Arkansas 61.1%
28 Tennessee 59.8%
29 Arizona 58.8%
30 New York 58.5%
31 Alabama 56.9%
32 Maine 56.8%
33 Minnesota 56.4%
34 Washington 56.1%
35 Mississippi 54.1%
36 North Dakota 53.5%
37 Wyoming 52.8%
38 Oregon 50.4%
39 Oklahoma 50.0%
40 Wisconsin 49.9%
41 Hawaii 49.8%
42 Texas 49.1%
43 Indiana 46.6%
44 Delaware 45.3%
45 Alaska 45.0%
46 Idaho 44.0%
47 Kentucky 43.8%
48 Louisiana 43.5%
49 California 42.9%
50 Nevada 40.0%

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Methodology

Savinly assessed all 50 states using 27 measures grouped into six areas: personal consumption, household earnings, financial knowledge, retirement savings, state policy supporting financial literacy education, and economic resilience. Each state received a score per category, which were then weighted according to their importance. The weighted sum produced the final score used for ranking.

These rankings do not prove causation between state policy and residents’ financial outcomes, nor do they evaluate individual financial literacy. Instead, we measure what each state is doing to lift residents’ financial health through education and supportive policy. Our analysis assumes that state requirements for financial education generally contribute to better long-term financial outcomes for residents.

Sources

Personal Consumption: Experian: Average U.S. credit score; LendingTree: Credit card debt by state; American Bankruptcy Institute: January 2023 statistics; Pew Charitable Trusts: Payday loan type, regulation, and APR; U.S. Census Bureau: Housing vacancies and homeownership; Empower: 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: Earnings disparities by sex; Center for American Progress: State salary range transparency laws.

Knowledge: FINRA Foundation: National Financial Capability Study (NFCS) 2021 state-by-state survey.

Investing and Saving: Empower: Average retirement savings by state; ADP: State-mandated retirement plans.

State Policy: Next Gen Personal Finance: 2023 State of Financial Education report; Pew Charitable Trusts: Payday loan type, regulation, and APR; CNBC: 529 college savings plan; Pew Charitable Trusts: State college savings account; U.S. Department of Labor: Consolidated minimum wage table by state.

Resilience: Missouri Economic Research and Information Center: Cost of living data series; U.S. Bureau of Labor Statistics: Average historic unemployment rate.

Jordan Hayes is a consumer trends reporter at Clearlink, the parent company of Savinly. Contributions to this analysis were provided by Chris Zuppa, multimedia content creator, and Frannie Comstock, digital PR and marketing manager.