The 15 Most Financially Savvy U.S. States

Editor's Note: This story originally appeared on Smartest Dollar.

To achieve success and stability upon entering the workforce, having a basic understanding of the financial system is crucial.

However, many Americans are not receiving the fundamentals of financial education, and a surprising number of young adults already have debt in collections.

According to data collected by the FINRA Foundation, the number of U.S. adults who possess basic financial knowledge has been steadily declining, despite increased access to financial information online.

Despite a lack of formal financial instruction, financial literacy does increase with age and educational attainment. While age and education are highly correlated with financial literacy, geography also appears to play a major role.

To determine the most financially savvy states, researchers at Smartest Dollar analyzed data from the FINRA Investor Education Foundation.

States were ranked based on the share of adults with high financial literacy — defined as those who scored higher than the national median score of 42.9% on FINRA’s Financial Literacy Quiz. Here are the most financially savvy states in the U.S.

15. New Hampshire

• Share of adults with high financial literacy: 50.5%
• Share of adults with basic interest rate knowledge: 75.9%
• Share of adults with basic inflation knowledge: 56.7%
• Share of adults with basic investment risk knowledge: 46.5%

14. Connecticut

• Share of adults with high financial literacy: 50.7%
• Share of adults with basic interest rate knowledge: 75.0%
• Share of adults with basic inflation knowledge: 57.0%
• Share of adults with basic investment risk knowledge: 46.3%

13. Idaho

• Share of adults with high financial literacy: 51.0%
• Share of adults with basic interest rate knowledge: 76.3%
• Share of adults with basic inflation knowledge: 60.6%
• Share of adults with basic investment risk knowledge: 43.2%

12. Montana

• Share of adults with high financial literacy: 51.9%
• Share of adults with basic interest rate knowledge: 76.5%
• Share of adults with basic inflation knowledge: 64.4%
• Share of adults with basic investment risk knowledge: 46.1%

11. Wisconsin

• Share of adults with high financial literacy: 52.3%
• Share of adults with basic interest rate knowledge: 75.0%
• Share of adults with basic inflation knowledge: 59.8%
• Share of adults with basic investment risk knowledge: 43.1%

10. Oregon

• Share of adults with high financial literacy: 53.2%
• Share of adults with basic interest rate knowledge: 74.6%
• Share of adults with basic inflation knowledge: 61.9%
• Share of adults with basic investment risk knowledge: 47.6%

9. Vermont

• Share of adults with high financial literacy: 53.4%
• Share of adults with basic interest rate knowledge: 76.1%
• Share of adults with basic inflation knowledge: 60.3%
• Share of adults with basic investment risk knowledge: 46.9%

8. Utah

• Share of adults with high financial literacy: 53.5%
• Share of adults with basic interest rate knowledge: 75.4%
• Share of adults with basic inflation knowledge: 58.6%
• Share of adults with basic investment risk knowledge: 45.1%

7. Hawaii

• Share of adults with high financial literacy: 53.5%
• Share of adults with basic interest rate knowledge: 77.5%
• Share of adults with basic inflation knowledge: 63.7%
• Share of adults with basic investment risk knowledge: 51.6%

6. North Dakota

• Share of adults with high financial literacy: 54.7%
• Share of adults with basic interest rate knowledge: 79.1%
• Share of adults with basic inflation knowledge: 60.8%
• Share of adults with basic investment risk knowledge: 46.2%

5. South Dakota

• Share of adults with high financial literacy: 55.3%
• Share of adults with basic interest rate knowledge: 77.0%
• Share of adults with basic inflation knowledge: 63.3%
• Share of adults with basic investment risk knowledge: 48.7%

4. Washington

• Share of adults with high financial literacy: 55.6%
• Share of adults with basic interest rate knowledge: 77.4%
• Share of adults with basic inflation knowledge: 61.4%
• Share of adults with basic investment risk knowledge: 47.2%

3. Alaska

• Share of adults with high financial literacy: 55.8%
• Share of adults with basic interest rate knowledge: 76.5%
• Share of adults with basic inflation knowledge: 62.0%
• Share of adults with basic investment risk knowledge: 48.7%

2. Minnesota

• Share of adults with high financial literacy: 55.9%
• Share of adults with basic interest rate knowledge: 72.0%
• Share of adults with basic inflation knowledge: 58.3%
• Share of adults with basic investment risk knowledge: 53.8%

1. Wyoming

• Share of adults with high financial literacy: 57.0%
• Share of adults with basic interest rate knowledge: 78.0%
• Share of adults with basic inflation knowledge: 66.8%
• Share of adults with basic investment risk knowledge: 49.5%

Methodology

The data used in this analysis is from the FINRA Investor Education Foundation’s National Financial Capability Study.

To determine the most financially savvy states, researchers at Smartest Dollar calculated the share of adults who scored higher than the national median score for FINRA’s Financial Literacy Quiz. In the event of a tie, the state with the greater share of adults with basic interest rate knowledge was ranked higher. Researchers also calculated the share of adults with basic inflation knowledge and basic investment risk knowledge.

The share of adults with basic interest rate knowledge was calculated as the share of respondents that answered the following question correctly: Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

• More than $102
• Exactly $102
• Less than $102

The share of adults with basic inflation knowledge was calculated as the share of respondents that answered the following question correctly: Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

• More than today
• Exactly the same
• Less than today

The share of adults with basic investment risk knowledge was calculated as the share of respondents that answered the following question correctly: Buying a single company’s stock usually provides a safer return than a stock mutual fund.

• True
• False