Virginia is the third most financially literate state in the country, according to a new Wallethub survey that combines metrics of personal financial behavior and public policy indicators. New Hampshire and Utah rank No. 1 and No. 2, while Arkansas and Mississippi rank at the bottom.
“Financial literacy ultimately comes down to familiarity with key themes and concepts, the ability to think critically, good judgment and self-restraint,” writes Senior Writer John Kiernan.
The Old Dominion ranked 1st in the country for high school literacy, reflecting its low drop-out rate and its status as one of only four states in the country to require a stand-alone course in personal finance as a graduation requirement. Virginians also were more responsible on average in the handling of their personal finances, as measured by indicators such as the percentage of households that spent less money than they earned and the percentage that maintained rainy day funds.
I can vouch for the value of the state’s required course on personal finance. My 15-year-old son, enrolled in 10th grade, is taking the course this year. He is learning about everything from credit cards and mortgages to check accounts and 1066 federal income tax forms. I’ve maintained a savings account for him for years, which he long regarded suspiciously as a black hole that sucked up the money he received as Christmas and birthday gifts. But after learning about checking accounts, he was quite excited this year to go down to the bank with his Christmas loot, fill out the deposit slip and put the money into his savings account. He zones out when his mother and I try to teach him anything – but making it part of the school curriculum seems to confer legitimacy.
I’d classify the Economics & Personal Finance class as one of the more useful things that public schools teach in Virginia. I have no idea whether school learning actually changes peoples’ behavior — I’m a bit skeptical in that regard — but it can’t hurt. Everyone benefits when people assume responsibility for their own financial welfare and avoid making stupid and costly financial decisions.