Top 10 States for Financial Literacy

Hi Dreamers,

Today is the two year anniversary of the D.R.E.A.M. Blog!!! It feels like just yesterday I was sharing the story about how the organization was founded. Over the last two years our blog has provided information on a host of financial literacy topics. We hope that you have learned a lot along the way. We look forward to continuing to be a leading source of personal finance information.

In celebration of our anniversary, I want to unveil something I have been working on for some time; our first annual financial literacy rankings by state. Our team has been digging through the data to determine what states have the highest financial IQ.  Our rankings aim to provide an independent assessment of the state of financial literacy in America. 

Inside the Rankings 

We keep our data as objective as possible to provide our readers with an unbiased opinion. Our rankings and research highlight that although financial literacy is largely determined by  individual demographic characteristics it may also be shaped by the state in which people reside. 

 Interesting results, four of the largest states, based on population, did not make the top 10: California, Florida, New York, and Texas. Also, states in the South and Midwest accounted for majority of spots in the top 10. Moreover, despite having a high density of wealth and some of the richest zip codes per capita, there was only one state in the Northeast represented on our top 10 list, New Jersey.

Alarmingly, 26 states currently have no education policy in place that includes financial literacy or personal finance education. Meanwhile, only 4  states mandate a designated personal finance or financial literacy course for high school graduation. 

Behind the Numbers

 Our rankings were derived using a proprietary formula which analyzed education policy in each state in addition to other metrics that measure one's financial literacy and financial behavior. (Let's face it, merely knowing the right financial practices is useless unless you are actually employing the knowledge) 

We began with data from all 50 states. Our rankings measure states in three broad categories: Policy (33%), Literacy (26%), and Behavior (41%). Here's how the numbers break down:

 State Policy: 33%

We analyzed each states financial education policies utilizing information from the Jumpstart Coalition for Personal Financial Literacy and state government sources.

Financial Knowledge: 26%

We utilized the results from a financial literacy quiz administered to persons in all 50 states by the EBRI.

Financial Habits: 20%

Our research included analysis of results from a questionnaire administrated to persons by the EBRI regarding their financial practices.

Banking: 13%

We utilized data from a study conducted by the FDIC analyzing national banking sector participation.

Credit Card Debt: 7%

We analyzed data from one of the three major credit score bureaus to identify the average level of indebtedness per state resident.

About the Author:  Femi Faoye is the Co-Founder and Chief Executive Officer of D.R.E.A.M. He's also the Founder of Millennial Capital Management, an investment management firm based in New York City. He’s a staunch and passionate financial literacy education advocate. 



Notwithstanding any language to the contrary, the views expressed in this post reflect those of the author and are solely theirs and do not reflect the views of Developing Responsible Economically Advanced Model-Citizens, Incorporated or any affiliates. Opinions are based upon information the author deems reliable but Developing Responsible Economically Advanced Model-Citizens, Incorporated does not warrant its completeness or accuracy and should not be relied upon as such. Neither the author nor Developing Responsible Economically Advanced Model-Citizens, Incorporated guarantees any specific outcome or profit from recommendations presented and you should be aware that losses may occur following any strategy or investment discussed. This material does not take into account your particular investment objectives, financial situation or needs. Before acting on information in this post you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

The contents of this post cannot be redistributed without the explicit written consent of the author and Developing Responsible Economically Advanced Model-Citizens, Inc. All images in this post owned by Developing Responsible Economically Advanced Model-Citizens, Inc. may not be used in any advertising, publicity, or otherwise to indicate members' sponsorship or affiliation with any product or service without the prior express written consent of Developing Responsible Economically Advanced Model-Citizens, Inc. All other images presented not owned by Developing Responsible Economically Advanced Model-Citizens, Inc. are the property of the author, respective company, or photographer. The rights to the images and likeness represented are under explicit ownership of the person(s) aforementioned.