WalletHub, the personal finance site that cranks out research pieces at a rate we can’t keep up with, released its 2016 ranking of the most and least financially literate states.
April is National Financial Literacy Month, proving that there may be nothing in existence that doesn’t get its own celebratory day or month.
(April is also Jazz Appreciation Month, in case WalletHub’s looking for another way to rank the states.)
In any case, as it typically does, Wallethub uses a custom formula to determine which states have the most and least financially literate residents.
Say what you want about government spending and all that, but it seems Mainers are pretty good with their money at the household level. WalletHub places Maine at No. 6 nationwide overall, with our neighbors in New Hampshire taking the coveted No. 1 spot.
The site used 12 key metrics to determine its rankings, and Mainers really stood out in four of them in particular.
- Mainers ranked No. 2 in terms of the lowest percentages of unbanked households.
- Maine residents came in at No. 3 in terms of lowest percentages of people who spend more than they earn.
- Mainers finished No. 6 in terms of lowest percentages of people borrowing from non-bank lenders.
- And they were rated No. 6 as well in Champlain University’s high school financial literacy grade.
Here’s a display showing the best and the worst of states by a few of those criteria:
So what does this mean?
Well, Mainers make smart use of the regulated banking system, putting money away in savings accounts and choosing to borrow from banking institutions — as opposed to keeping money in shoeboxes or borrowing from friends and neighbors, for instance.
The Champlain University ranking takes into consideration the prevalence of high school courses featuring “personal finance concepts,” as well as the Alfond Scholarship Foundation’s pledge of $500 toward a college fund for every child born in the state.
That tells us, generally speaking, Mainers take steps to teach children — and teenagers — about the value of education and of being responsible with money.
Overall, Maine finished between No. 5 Maryland and No. 7 Florida in the rankings.
The lowest ranked state on the list was Alaska, despite its strong showing in the “unbanked households” category above. But if you throw Washington, D.C. into the mix, the capital city finishes below Alaska at No. 51.
See how all the states rank, with No. 1 being the most financially literate and No. 51 being the least, in the interactive map below: