Bragging rights: The most financially savvy states

An analysis by the Employee Benefit Research Institute reviewed data from a trio of linked surveys that polled a total of nearly 30,000 American adults. The organization tested participants' financial literacy and financial behavior through a series of questions. Inquiries such as, “If interest rates rise, what will typically happen to bond prices?” tested individuals' ability to understand financial concepts, while questions such as, “Have you ever tried to figure out how much you need to save for retirement?” were indicators of financial behavior. Alaskans topped the list for financial behavior rankings, followed by Utah, Delaware, Colorado and New Jersey. Denizens of New Hampshire wound up at the top of the list for financial literacy, followed by Minnesota, South Dakota, Idaho and Washington state. On the lower end of the spectrum, Tennessee, North Carolina, Arkansas, Mississippi and Louisiana rounded out the lowest-scoring states for financial literacy. Similarly, Oklahoma, Arkansas, Mississippi, Kentucky and West Virginia were the five bottom states for financial behavior. Curiously, New York, a hub for banking and finance, came in 46th for financial literacy and 25th in financial behavior. Because the same states tend to dominate the top and bottom of both lists, EBRI suggested that the individual states themselves may have some influence on the outcomes, but could not narrow down what exactly those factors might be, noted EBRI's managing director, Stephen Blakely. Still, for the lowest-scoring states, the results suggest that there could be some benefit for policy intervention at the state level to help improve financial literacy and behavior. Indeed, a number of states have kicked off financial education initiatives. For instance, New Jersey Department of Banking and Insurance Commissioner Tom Considine and Provident Bank chief executive Chris Martin last month spoke to Garden State high schoolers about setting up budgets and establishing good credit.