Texans like to see themselves as independent guys looking for # 1.
But that cannot extend to worrying about our own finances. Texas was ranked 33rd out of 50 states plus the District of Columbia in a wallet hub ranking of residents’ financial literacy. Massachusetts topped the list, while Mississippi brought up the rear.
To create the ranking, the researchers combed 24 metrics that represent financial literacy, from foreclosure rates to the number of households without a bank.
Texas’s poor overall performance doesn’t mean its residents lack tax self-control. We rank reasonably well for the percentage of adults who spend less than they earn and our total debt as a percentage of median income – 15th in both cases.
The problem is … well, almost everything else.
Our average creditworthiness is 45th, our share of households without a bank is 42nd and we are 46th in percent for housing costs
Of course, research shows that it is terribly difficult for families to make sound financial decisions when they are caught in the paycheck-to-paycheck cycle.
And that could explain the low scores for Texas, where nearly 16 percent of the population live in poverty. Many other states even further down the list – Arkansas, West Virginia
But there have been some efforts on the ground to reverse course.
The City of San Antonio operates four Financial Empowerment Centers that offer residents free, one-on-one financial advice. A non-profit partner operates two more. Last year, customers at the six centers collectively paid off debts totaling $ 2.9 million.
“Financial literacy is required at all levels, but it affects people on low incomes differently than people on upper and middle incomes,” said Richard Keith, city human resources administrator. For example, when a hardship arises, people living from paycheck to paycheck may feel that they have no choice but to take out high-interest payday loans.
In addition to the city’s efforts, the San Antonio CPA Society offers a three-month program and competition that allows students at 13 high schools in the area to focus on financial literacy.
“If you have the knowledge to make better decisions early on, you can avoid financial crises,” said Jacqui Belcher, general manager of the company.
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