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Financial Planning > College Planning

Top 10 Dumbest States for Financial IQ

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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, D.C., 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, including Washington, D.C., had the lowest financial IQ, AdvisorOne added each states’ ranking in Literacy and Behavior and, like golf, the highest scores lost. If a tie occurred on Overall Score, then the state with the worse ranking for Behavior lost the tiebreaker, because not acting is more important than merely not knowing what to do. Herein are the Top 10 Dumbest States for Financial IQ. (A prior slideshow revealed the Top 10 Smartest States for Financial IQ.)

 Texas road sign10.  TEXAS

Overall Score:  83

Literacy:  39th out of 51

Behavior:  44th out of 51

North Carolina's Capitol in Raleigh9.  NORTH CAROLINA

Overall Score:  84

Literacy:  48

Behavior:  36

Alabama's Capitol in Montgomery. (Photo: AP)8.  ALABAMA

Overall Score:  85

Literacy:  43

Behavior:  42

Cleveland's Rock 'n Roll Hall of Fame (left). (Photo: AP)7.  OHIO
(Lost tiebreaker with Alabama)

Overall Score:  85

Literacy:  42

Behavior:  43

Graceland in Memphis, Tenn. (Photo: AP)6.  TENNESSEE

Overall Score: 87

Literacy:  47

Behavior:  40

Kentucky Derby at Churchill Downs. (Photo: AP)5.  KENTUCKY

Overall Score:  91

Literacy:  41

Behavior:  50

Two coal miners.4.  WEST VIRGINIA

Overall Score:  96

Literacy:  45

Behavior:  51 (worst)

Mardi Gras in New Orleans.3.  LOUISIANA 

Overall Score:  97

Literacy:  51 (worst)

Behavior:  46

Arkansas flag.2.  ARKANSAS
(Lost tiebreaker with Louisiana)

Overall Score:  97

Literacy:  49

Behavior:  48

Mississippi flags at state capitol in Jackson. (Photo: AP)1.  MISSISSIPPI

Overall Score:  99

Literacy:  50

Behavior:  49

Dishonorable Mention 

Barely missing out on wearing AdvisorOne’s Financial IQ dunce cap are PENNSYLVANIA, which ranked 44th in Literacy and 33rd in Behavior, and Indiana, which was 37th in Literacy and 37th in Behavior.


Top 10 lists from AdvisorOne:


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