NH ranked top state in financial literacy report

New rankings examine financial resilience of each state

New Hampshire does more to promote and support financial literacy than any other state in the country, according to a new report by The Penny Hoarder, a personal finance website.

To determine how well each state supports financial literacy and financial resilience, the website examined state-level programs, policies and residents’ general financial well-being through 27 evaluation criteria to rank states from best to worst.

New Hampshire scored 79.9 percent out of 100, just ahead of Virginia, at 79.7 percent. Other states in the top 10 were Nebraska (78.6 percent); North Carolina (76 percent); Georgia (75 percent); Ohio (74.6 percent); Maryland (72 percent); Connecticut (71.4 percent); New Jersey (70.4 percent); and Rhode Island (70.1 percent).

The six ranking factors used to evaluate states on financial literacy were divided into 27 total evaluation criteria, including credit scores and historic unemployment in each state. The scores were weighted based on the importance of the category.

The scoring breakdown was:

• Personal consumption (25 percent): Consumption measures the general financial well-being of a state’s population. Included were data points such as FICO credit score, credit card debt, bankruptcy rates, homeownership rates and the average annual percentage rate for payday loans.

• Individual earnings (10 percent): The category looked at disparities among white, Black, Native American, Asian-Pacific Islander, Hispanic/Latino and multiracial populations as well as disparities between male and female earnings. Pay disparities were calculated based on how many cents to the dollar a marginalized group made compared to the average white man.

• Financial knowledge (2.5 percent): The study looked at self-reported knowledge of financial literacy from a survey by the Financial Industry Regulatory Authority’s educational arm. The focus was on knowledge about four key financial terms. Some 54 percent of respondents understood inflation; 70 percent of Americans understood compound interest; 71 percent of people surveyed understood mortgage interest; and 25 percent of Americans understand bonds and how interest rates affect bond prices.

• Investing and savings (2.5 percent): Included were data points such as average retirement savings to understand investing and saving rates in each state. The average retirement savings amount across all 50 states is $427,918, according to the report.

• State policy around resilience and education (50 percent): The report looked at Next Gen Personal Finance’s 2023 State of Financial Education report, which measures the number of students in each state required to take a financial literacy course to graduate from high school, as well as the number of students who had access to a standalone financial literacy course. Also included were policies that limit or ban predatory payday loans, as well as states that automatically contribute to or match contributions to college savings funds. Also included were the average minimum wage in each state, with states with higher minimum wages receiving more points.

• Financial resiliency (10 percent): Included was the affordability index for each state. The most expensive regions to live in the U.S. were in the Northeast and West Coast as well as Hawaii and Alaska. The least expensive areas were the Midwest and the Southern region.

New Hampshire’s highest score was earned in the investing and saving category, according to The Penny Hoarder.

Another area where New Hampshire stood out was in the state policy category. The state ranked high with its new policy requiring high school students to take a personal finance course before graduating. Some 66 percent of states do not have such a requirement.

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