A comparative, state by state study by the Investor Education Foundation of the Financial Industry Regulatory Authority was conducted to find out the financial behavior of people across the 50 US states.

About 28,000 people participated in the study. They were asked several questions related to five major financial issues. The results showed three cities with the most financially responsible residents. The three cities are New York, New Jersey and New Hampshire. Contrary to the satisfactory financial capability of these three cities, Oklahoma, South Dakota, Texas and Kentucky residents are struggling to budget their money.

The result of the study is very helpful according to most experts. According to Gail Cunningham of the National Foundation for Credit Counseling, the experience of recession serves as a wake-up call for most consumers to reflect and change their financial habits. This study can serve as a guide for many people in the way they manage their finances.

The differences in financial attitude among people from different states may be attributed to several factors. According to the Financial Literacy Center’s director Annamaria Lusardi, the state’s economy which includes the local housing market and rate of unemployment is a factor. Another is the lack of financial knowledge and literacy says Rick Ketchum, CEO of FINRA Foundation. Financial literacy in New Hampshire, Minnesota and South Dakota is higher than those living in the cities of Kentucky, Arkansas and Tennessee. Ketchum further adds that aside from these, there are other factors in play that can mislead people to make uncalculated investments and expensive loans.

Other factors considered in the study that highly influence financial behavior are age and gender differences. Results showed that younger people have a tendency to depend on payday loans and tax advance refunds instead of bank loans. Most of the young ones also lack emergency funds. This is not a surprising finding but this is very alarming. The young group must start their careers without having too much credit card and student loan debt to be able to achieve a good credit, maintain a satisfactory financial standing and practice the right financial behavior.

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