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Here are the states struggling the most financially during the pandemic

Stephanie Asymkos
·Reporter
·4 mins read

A person’s financial fortune during the pandemic is tied to which state they call home, according to a new analysis.

Americans’ money distress is disproportionately felt across the 50 states and the District of Columbia, according to a study from WalletHub that compares a location’s average credit score, accounts in distress, bankruptcy filings, online searches for “debt,” and the number of loans needed due to the coronavirus.

Read more: Rental aid: Here's where you can find help in every state

Financial difficulties are more pronounced in states like Louisiana, Nevada, Indiana, Oklahoma, and Florida, while those living in Vermont, Montana, Massachusetts, Alaska, and New Hampshire feel less of a financial hit, the data showed.

(Graphic credit: David Foster, Yahoo Finance)
(Graphic credit: David Foster, Yahoo Finance)

States with more residents in dire financial straits often overlap with those states experiencing high volumes of COVID-19 cases, too, said Jill Gonzalez, a senior analyst at WalletHub, told Yahoo Money.

Among the states with the highest rates of COVID-19 per 1 million residents, five states — Florida, Louisiana, South Carolina, Nevada, and Texas — overlap with the states WalletHub identified as those in the greatest financial distress.

The inverse is also true: Vermont, New Hampshire, Oregon, Montana, and Alaska, which were identified as the least financially impacted, are also among the lowest in the country in terms of infection rate.

Read more: Money-saving tips to stretch your paycheck

The pandemic is also striking Americans differently based on income, Gonzalez said, which shows up in geography.

Social-distancing measures didn’t derail industries like media, software, and financial services that are based in the Northeast and West and could seamlessly transition to remote work. But for those living in the South and Midwest — where agriculture, machinery, or service are more prevalent — remote work isn’t an option. That’s hurting lower-earners more, because they make up the bulk of workers in those sectors.

Financial difficulties related to COVID-19 are more pronounced in states like Louisiana, Nevada, Indiana, Oklahoma, and Florida, while those living in Vermont, Montana, Massachusetts, Alaska, and New Hampshire feel less of a financial hit, data from WalletHub indicated. (Photo: Getty)
Financial difficulties related to COVID-19 are more pronounced in states like Louisiana, Nevada, Indiana, Oklahoma, and Florida, while those living in Vermont, Montana, Massachusetts, Alaska, and New Hampshire feel less of a financial hit, data from WalletHub indicated. (Photo: Getty)

“It's very obvious that the pandemic is more of a problem for those with lower income than higher income,” Gonzalez said, explaining that the ripples can be felt in health care, employment, and personal finance. “The pandemic is driving a wedge even further between socio-economic classes.”

She noted that lower-income Americans are less likely to be insured so they might avoid getting tested, and typically tend to live in crowded homes and neighborhoods where social distancing is non-existent and could unknowingly spread the virus.

“The effects of this financially —unfortunately, more so for those who have lower income — are going to be felt for years to come,” Gonzalez said, “and entire neighborhoods are really going to be set back from this.”

Yahoo Money sister site Cashay has a weekly newsletter.
Yahoo Money sister site Cashay has a weekly newsletter.

WalletHub ranked each states’ financial distress for its residents from worst to best. The company used six categories to determine its ranking:

  • Average credit score

  • People with accounts in distress

  • Average number of accounts in distress

  • Change in number of bankruptcy filings from July vs. January

  • “Debt” search interest index

  • WalletHub’s “States Where People Need Loans the Most Due to Coronavirus” score

1

Louisiana

2

Nevada

3

Indiana

4

Oklahoma

5

Florida

6

Texas

7

South Carolina

8

Kansas

9

District of Columbia

10

New York

11

Missouri

12

Utah

13

Idaho

14

Kentucky

15

North Carolina

16

Delaware

17

Alabama

18

Georgia

19

Tennessee

20

Wyoming

21

Arizona

22

Hawaii

23

South Dakota

24

Virginia

25

Arkansas

26

Iowa

27

Mississippi

28

Illinois

29

Ohio

30

Pennsylvania

31

New Mexico

32

Wisconsin

33

West Virginia

34

Maryland

35

Michigan

36

Washington

37

Colorado

38

California

39

Rhode Island

40

Maine

41

New Jersey

42

Nebraska

43

Connecticut

44

North Dakota

45

Minnesota

46

Oregon

47

New Hampshire

48

Alaska

49

Massachusetts

50

Montana

51

Vermont

Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.

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