Financial literacy is the highest in these US states, according to report

The ability to understand and use different financial skills, like earning income, budgeting, saving, investing, and managing credit, is key to making informed decisions about money and achieving one’s financial goals. 

And with mounting credit card debt among Americans and defaults soaring to record highs, experts say financial education is important to try and improve these trends. 

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A new report from Wallethub found that some states appear to be more financially literate than others.

States with highest financial literacy

What we know:

To rank the states in order of their financial literacy, WalletHub said it analyzed financial-education programs and consumer habits, in addition to a "WalletLiteracy Survey" conducted in all 50 states and Washington, D.C. The metrics range from high-school financial literacy grade to the share of adults with a "rainy-day fund."

Highlights:

Minnesota was named the most financially literate state by WalletHub, thanks to its financial education "baked into the K-12 curriculum" and a requirement that high school students take at least one personal finance-related course. WalletHub also found that Minnesota also has the lowest percentage of adults (around 15%) who spend more money than they make.

Overall, Minnesotans were found to have the highest median credit score in the country, at 751. 

Colorado was the second-most financially literate state with the third-highest rate of people 25 and older who have at least a bachelor’s degree, at 45%, and just 1.10% of households who don’t have a bank account, according to WalletHub’s report. The state also requires personal finance education in school. 

On the opposite end of the spectrum, Arkansas, Oklahoma and South Dakota were ranked last for financial literacy. 

What they're saying:

"Too many Americans lack comprehensive financial literacy, which causes them to have lower credit scores, prevents them from getting credit with good interest rates and lowers the amount of wealth they build throughout their life, among other negative consequences," WalletHub analyst Chip Lupo said in a statement. 

"Because financial literacy is so essential, states should prioritize teaching it from a young age," Lupo added. "It’s not surprising that the most financially literate states all require personal-finance education before students graduate from high school."

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By the numbers:

Here’s how the U.S. states ranked, from most financially literate to least.

1. Minnesota
2. Colorado
3. Nebraska
4. Virginia
5. Wisconsin
6. New Hampshire
7. Iowa
8. Washington
9. Vermont
10. New Jersey
11. Maryland
12. Florida
13. Utah
14. Pennsylvania
15. Maine
16. Michigan
17. Oregon
18. North Carolina
19. Ohio
20. Indiana
21. Missouri
22. Arizona
23. Massachusetts
24. Kansas
25. Connecticut
26. Delaware
27. North Dakota
28. West Virginia
29. Texas
30. Idaho
31. Rhode Island
32. Illinois
33. Georgia
34. Wyoming
35. New York
36. Nevada
37. South Carolina
38. Montana
39. New Mexico
40. Alabama
41. Hawaii
42. District of Columbia
43. California
44. Alaska
45. Louisiana
46. Mississippi
47. Tennessee
48. Kentucky
49. South Dakota
50. Oklahoma
51. Arkansas