With April being National Financial Literacy Month and less than half of adults setting a budget, a new report on 2023’s Most & Least Financially Literate States, analyzed financial education programs and consumer habits in each of the 50 states and the District of Columbia.

The study uses a data set of 17 key metrics, which range from high-school financial literacy grade to the share of adults with a rainy-day fund. The metrics also include the results of WalletHub’s WalletLiteracy Survey.

For example in California:

Financial Literacy in California (1=Most Financially Literate, 25=Avg.):

  • 39th – WalletHub’s ‘WalletLiteracy Survey’ Score
  • 29th – % of Adults Aged 18+ Who Spend More than They Earn
  • 9th – % of Adults Aged 18+ with Rainy-Day Funds
  • 35th – % of Unbanked Households
  • 19th – % of Adults Aged 18+ Paying Only Minimum on Credit Card(s)
  • 43rd – % of Adults Aged 18+ Who Compare Credit Cards Before Applying
  • 39th – High-School Financial Literacy Grade

Expert Commentary

How can parents equip their kids with financial know-how?

“Integrate financial knowledge into everyday life. Do not make it something separate or taboo or mysterious. For instance: set up an allowance with the provision that some can be sent but a fixed proportion must be saved for future spending. Another example: talk about how much your household earns per week or month. This will get your kids used to thinking about the constraints we all face,” said Louis D. Johnston, professor at, College of Saint Benedict | Saint John’s University.

“Several studies have found that children and adolescents learn much more about money from their parents than they do from school, media, peers, or work experience. Parents usually have a powerful, daily impact on children for many years. So, I would encourage policymakers to think about how they can better help parents be good financial teachers to their kids. Helping parents with their financial literacy and behaviors and helping them be better financial teachers may be more effective for shaping children’s outcomes than having other people teach children about money. Parents can use three main methods to teach their kids about money: setting a good example of money management for them to observe and learn from, verbally teaching them and having conversations with them about money, and facilitating hands-on financial opportunities for them to practice managing their own money. Kids whose parents use all three tactics well tend to be better off financially later in life. That said, the reality is that not all kids are going to receive high-quality financial education from their parents, and financial education in schools can be an excellent source of financial learning for these kids (and a great supplement for kids who are getting it at home),” said Ashley LeBaron-Black, assistant professor, Brigham Young University.

What is the right balance between expecting consumers to educate themselves versus regulating financial service providers?

“Generally speaking, it is more effective and efficient to regulate financial service providers rather than expect consumers to educate themselves. We do not ask Americans to all become experts in medicine or auto mechanics and we should not insist that they become experts in financial services. In the case of consumer finance, a failure to regulate financial service providers well means we are not only expecting consumers to educate themselves, but we are also expecting them to outwit sales pitches and marketing that often exaggerate benefits and obfuscate costs and risks of financial products. Note that regulating financial service providers start with educating kids! Kids need to understand that the shape of the financial world is not controlled by the financial industry, but is also shaped by the decisions we make as a society about how to regulate the industry. Understanding how people can make their voices heard in a democracy is key to helping the next generation make the world they want to live in,” said Lauren E. Willis, associate dean for research; professor, at Law School, Loyola Marymount University.

“I am not sure, but here is the way I approach the question: financial service providers must provide consumer information in clear, non-technical language so that both consumers and the press can understand this information and act on it. Consumers need to take time to understand basic concepts such as inflation,” said Louis D. Johnston, professor at, College of Saint Benedict | Saint John’s University.

What should policymakers do to improve financial literacy?

“The number one thing policymakers should do is take actions that improve prenatal and early childhood conditions. Better nutrition and stability of living conditions for pregnant mothers and children 0 to 5 have life-long positive effects on brain health, and the brain is where financial decisions are made. Policymakers need to eliminate homelessness and increase housing stability and nutrition quality for pregnant women and young children. Reinstating an expanded Child Tax Credit and making it permanent would be a way to quickly improve the situation for many families now, and equip their children with the best chances of having strong cognitive skills and financial outcomes in the long term,” Willis said.

For the full report, please visit here.

Source: WalletHub