How financially secure is your state?

It’s hard to talk about the state of post-recession America without mentioning the growing income gap between the rich and the poor — but how are folks faring at a more local level?

The Corporation for Enterprise and Development, a non-profit advocacy group for low- and middle-income consumers, released its annual Assets & Opportunity Scorecard Thursday, offering a deeper look at the prosperity (or lack thereof) of residents in all 50 states and the state policies put in place to support them.

The study measures not just household income but overall financial security — that is, how prepared people are to handle unexpected financial emergencies and how they’re saving for long-term goals like retirement. CFED also ranked states (plus D.C.) based on how effectively they have implemented policies such as college savings plan incentives, payday lending regulations, and programs that help the unbanked access checking and savings accounts.

“Even as many economic indicators like employment and foreclosure rates have improved, the liquid asset poverty rate hasn’t moved at all,” said Andrea Levere, president of CFED. “How do we think about building savings? Because without that, consumers can never increase their financial security.”

Needless to say, some states are faring better than others.

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Photo: CFED



Vermont took the top spot in financial security. The state has the fourth-lowest rate of consumers with subprime credit and the third-lowest rate of households without a bank account. It’s bolstered by policies that protect consumers from predatory payday lending practices, offers a state earned income tax credit, and special state-matched savings accounts for low- and moderate-income savers saving up for particular goals like college or a new home.

Conversely, Mississippi ranked dead last for both outcomes and overall policies, which might explain why it has the highest income poverty rate, the lowest rate of households with savings accounts, and the highest number of consumers with subprime credit of all states.

“We still have way too high rates of Americans who don’t have bank accounts,” Levere said. “Household savings are always the last thing to improve [after a recession]. We haven’t done enough across the board to provide incentives to lower-income households to save.”

The group found nearly half (44%) of American households are liquid-asset poor, meaning they are scraping by with enough to keep a roof over their head and food on the table but wouldn’t last two to three months without a paycheck.

And just days after President Obama proposed a plan for MyRA, a Roth IRA-like retirement fund for those who don’t have access to 401(k)s, the CFED reports that even workers whose companies do sponsor plans don’t necessarily contribute. Just 44% of employees participating in employer-provided retirement plans say they are actively saving, down from 47% in 2007.

Want to see how your state fares? Here’s a list of the top 5 least and most financially secure states. Check out the CFED’s full report to see the rest.

The 5 LEAST financially secure states:

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The South Carolina State House.

5. South Carolina  (Last year’s rank: No. 3)


47.3% of consumers are liquid asset poor
62.9% of households have a savings account
Workers earn $42,380 on average
64.0% of consumers have subprime credit, with an average total debt of $9,227
68.1% of consumers own homes
The average college graduate debt is $27,416

4. Alabama (Last year’s rank: No. 11)

62.7% of consumers are liquid asset poor
62.6% of households have a savings account
Workers earn $46,295 on average
62.6% of consumers have subprime credit, with an average total debt of $8,501
68.8% of consumers own homes
The average college graduate debt is $26,540

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Atlanta skyline sunset from near the Martin Luther King (MLK) Center

3. Georgia (Last year’s rank: No. 2)


55.8% of consumers are liquid asset poor
60.9 % of households have a savings account
Workers earn $49,064 on average
65.2% of consumers have subprime credit, with an average total debt of $9,604
63.7% of consumers own homes
The average college graduate debt is $23,089

2. Nevada (Last year’s rank: No. 1)

55.6% of consumers are liquid asset poor
68.5% of households have a savings account
Workers earn $44,153 on average
67.7% of consumers have subprime credit, with an average total debt of $9,915
54.9% of consumers own homes
The average college graduate debt is $20,568

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The Mississippi State Capitol in Jackson, Mississippi.

1. Mississippi (Last year’s rank: No. 3)


61.9% of consumers are liquid asset poor
51.8% of households have a savings account
Workers earn $40,309 on average
69.1% of consumers have subprime credit, with an average total debt of $6,837
The average college graduate debt is $27,322

 

 



The 5 MOST financially secure states:

5. Alaska  (Last year’s rank: No. 7)

83.8% of households have a savings account
Workers earn $47,794 on average
55.7% of consumers have subprime credit, with an average total debt of $10,315
63.4% of consumers own homes
The average college graduate debt is $28,782
(Not enough data to determine liquid asset poverty rate)

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Wyoming/Montana State Line

4. Wyoming  (Last year’s rank: No. 4)

74% of households have a savings account
Workers earn $46,197 on average
51.5% of consumers have subprime credit, with an average total debt of $7,276
69% of consumers own homes
The average college graduate debt is $21,241
(Not enough data to determine liquid asset poverty rate)

3. New Hampshire  (Last year’s rank: No. 2)
 
21.1% of consumers are liquid asset poor
79.1% of households have a savings account
Workers earn $45,755 on average
49.5% of consumers have subprime credit, with an average total debt of $11,171
70.9% of consumers own homes
The average college graduate debt is $32,698

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North Dakota

2. North Dakota (Last year’s rank: No. 3)

 
30.9% of consumers are liquid asset poor
75.4% of households have a savings account
Workers earn $51,641 on average
43.8% of consumers have subprime credit, with an average total debt of $5,893
65% of consumers own homes
(Not enough data to determine average college graduate debt)

1. Vermont (Last year’s rank: No. 1)

27.0% of consumers are liquid asset poor
76.1% of households have a savings account
Workers earn $40,844 on average
46.7% of consumers have subprime credit, with an average total debt of $9,667
71% of consumers own homes
The average college graduate debt is $28,299

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