Top 10 Smartest States for Financial IQ

A study by the nonpartisan EBRI shows the difference in financial literacy and financial behavior for each state and Washington, D.C.

Which states will have the highest financial IQ? Which states will have the highest financial IQ?

Navigating a path toward a comfortable retirement requires sound knowledge of financial basics and existing investment choices, as well as the ability to understand and cope with the ever-changing set of financial instruments.

A recently released study by the nonpartisan Employee Benefit Research Institute in Washington used relatively new data from the National Financial Capability Study, designed by the FINRA Investor Education Foundation, to show the difference in financial literacy and financial behavior across states.

The data show that mostly the same states tend to appear at the top and bottom of financial literacy and financial behavior rankings. What does this suggest? There might be something going on at the state level whereby individual financial literacy and financial behavior are being shaped not only by individual demographic characteristics but also by the state in which people live, EBRI says.

To determine which states had the highest financial IQ, AdvisorOne added each states’ ranking in Literacy and Behavior and, like golf, the lower scores won. If a tie occurred on Overall Score, then the tiebreaker went to the state with the better ranking for Behavior, because acting is better than merely knowing what to do. Herein are the Top 10 Smartest States for Financial IQ. (Another slideshow will include the 10 Dumbest States for Financial IQ.)

Nebraska's Capitol in Lincoln10.  NEBRASKA

Overall Score:  27

Literacy:  9

Behavior:  18

Delaware state flag.9.  DELAWARE

Overall Score:  24

Literacy:  21

Behavior:  3

Milwaukee art museum.8.  WISCONSIN

Overall Score:  22

Literacy:  7

Behavior:  15

New Hampshire, Flume Gorge Bridge7.  NEW HAMPSHIRE

Overall Score:  14

Literacy:  1

Behavior:  13

Bald eagle flying in Alaska6.  ALASKA
(Won tiebreaker with N.H.)

Overall Score:  14  

Literacy:  13

Behavior:  1

Skyline view of Seattle5.  WASHINGTON STATE

Overall Score:  13

Literacy:  5

Behavior:  8

Mormon Tabernacle in Salt lake City4.  UTAH

Overall Score:  12

Literacy:  10

Behavior:  2

Idaho Potato Commission mascot, Spuddy Buddy. (Photo: AP)3.  IDAHO

Overall Score:  11

Literacy:  4

Behavior:  7

Colorado's Capitol in Denver2.  COLORADO

Overall Score:  10

Literacy:  6

Behavior:  4

Aerial view of Minneapolis1.  MINNESOTA

Overall Score:  8

Literacy:  2

Behavior:  6

BONUS page: See next page for states with the weirdest results.

The New Jersey Turnpike. (Photo: AP)RANKING ODDITIES

-- States that know what to do but refuse to do it:

VERMONT comes in at No. 8 for Literacy, but No. 41 for Behavior.

-- States that don’t know what to do but somehow still do it:

NEW JERSEY was ranked 35th in Literacy but 5th in Behavior.

WASHINGTON, D.C. (yes, it’s not officially a state, but don’t tell them that), was ranked 38th in Literacy but 9th in Behavior.

-- Disappointments:

NEW YORK, though the study encompasses the whole state it is home to the city that is the financial capital of the world, you'd think they'd do better. The state ranked an abysmal 46th in Financial Literacy and came in at 25th in Behavior. In Literacy, New York ranked below West Virginia and Alabama.  Ouch!

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Top 10 lists from AdvisorOne:

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