The Best States for Financial Wellness in 2026

Financial wellness is about how you manage your day-to-day spending, budgeting and savings along with investing and preparing for retirement. Knowing how to manage these elements can be timely, especially in April. As part of Financial Literacy Month, MoneyLion published new research to help Americans improve their finances.

The best states for financial well-being typically have “very good” FICO scores, manageable debt, and a balance between income and cost of living. States that rank lower often have less-than-ideal FICO scores, lower incomes and higher debt burdens. A recent MoneyLion study found that Minnesota and New Hampshire rank at the top for financial literacy, while Nevada and Mississippi rank at the bottom.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Key Findings

• The best financial environments have three key factors: high credit, manageable debt and costs that don’t overpower earnings.

• The best financial regions include Minnesota, New Hampshire and New Jersey. These states have low cost and strong credit.

• The worst financial regions include Mississippi, Louisiana, Nevada and Alabama due to lower income and weak credit.

The Rankings: Best to Worst States for Financial Well-Being

Where you live impacts your financial wellness. The difference between income levels, debt profiles and day-to-day costs will significantly affect your level of financial success in a specific state. These rankings highlight which states set you up for success and which ones make it harder to stay ahead.

Where Americans Are Thriving — and Struggling

Where you live can definitely impact your financial well-being. According to the Consumer Financial Protection Bureau (CFPB), these are the key elements that define it:

Top States

The following five states stand out as places where residents are more likely to thrive financially:

• Minnesota

• New Hampshire

• New Jersey

• Wisconsin

• Connecticut

Generally, these are states where FICO scores are high — over 730. Also, the debt levels are moderate, and the costs of necessities are reasonable compared to income.

These five states stand out because of the following factors:

• Credit health: FICO scores are between 730 and 742. These are good credit scores on the FICO rating scale.

• Debt is manageable: Debt is between $80,000 to $110,000. Given the income in these states, this isn’t extreme.

• Cost vs. income balance is closer to the ideal: In certain states like New Jersey, the income level offsets the costs.

Bottom States

These states rank lowest for financial well-being:

• South Carolina

• Alabama

• Louisiana

• Nevada

• Mississippi

Typically, these five states have lower credit scores — usually less than 700 — and lower incomes. In addition, there’s relatively higher financial pressure.

These five states fall at the bottom because of the following factors:

• Credit scores are lower: FICO scores in these states are typically between 680 and 705.

• Income is lower: The costs are manageable in these states, but income is often much lower.

• Debt is not out of control: Even though debt is not out of control, it’s much harder to manage.

How To Define Financial Literacy and Why It Still Matters

“Financial literacy is knowing how to handle your finances, and that doesn’t always mean making complex financial decisions. It looks more like living within your means, knowing where your money goes, understanding how you spend it and not just knowing what you should do, but actually doing it,” according to Taylor Kovar, certified financial planner (CFP) from Houston, Texas.

Financial literacy matters, as Andrew Lokenauth, money expert and owner of Fluent in Finance, points out. “It is the ability to make decisions with money that protects your future self, not just your present one.”

He adds that financial literacy hinges on three things:

• Understanding how income flows

• How debt compounds

• How your credit profile shapes the cost of everything you buy.

From his perspective, if you miss any one of these things, no salary can save you.

Retirement planner D’Andre Clayton agrees that “financial literacy is more about applied judgment over time.” You must understand the ability to align cash flow, risk and long-term obligations in a way that remains functional under stress.

What Actually Drives Financial Literacy

Credit scores, debt levels and the cost of living are key factors that drive financial literacy. Here's a breakdown of each to understand the full picture of financial wellness.

Credit Scores Still Set the Foundation

“Your credit score isn’t just a number. It’s a price tag on your financial life,” Lokenauth said. For example, the difference between a credit score of 680 and 742 could mean paying $200 to $400 more per month on the same mortgage. “Over 30 years, that’s well over $100,000,” Lokenauth said.

A lower score, according to Kovar, “means higher rate, fewer options and more friction, so even when someone is improving in other areas, that number still tends to carry a lot of weight.”

Debt Levels Can Hold Households Back

Debt levels cut into how much you can save. “The average American household carries roughly $100,000 in consumer debt. That’s not mortgage debt, but car loans, credit cards, medical bills and personal loans,” Lokenauth said. "States like California and Colorado are seeing average consumer debt of $150,000.”

This high debt, Lokenauth asserts, doesn’t just strain a budget, it freezes it. With this kind of debt cycle, there isn’t room to save, invest or absorb a single financial shock.

Kovar sees this cycle play out with his clients. “People feel like they’re working hard and making decent money, but they still can’t get ahead because too much of that income is already committed.”

Cost of Living Adds Pressure

Cost of living feeds the cycle and adds additional strain. “It’s not just income that determines financial well-being. It’s what’s left after you pay for survival,” Lokenauth said.

For example:

• A household in Hawaii spends roughly 31% more on groceries than one in Arkansas for the same basket of goods.

• The national average rent is around $1,350 per month, but in states like California or Hawaii, it can reach $2,200 or $2,300.

Experts say these rising costs are making it harder for many households to keep up. “In many cases, families are not spending carelessly, they are just trying to keep up with the higher costs of everyday needs,” Kovar said.

Clayton paints a more realistic picture for most Americans. “There is no escape from this pressure simply because you can’t reasonably make the decision not to drive or to eat.”

So what should you do? What steps do you take to improve your financial well-being?

Final Take: 3 Ways To Improve Your Financial Well-Being

Focus on improving your credit score, reducing debt and lowering your cost of living. Here are the approaches experts recommended:

1. Focus on Driving Your Credit Score Up

Lokenauth believes most consumers ignore credit utilization. “Keep your balance below 10% of your limit on every individual card, not just in total.” This single step can add 20 to 50 points in under 60 days.

Kovar thinks you can take concrete steps to drive up your credit score but always remember it's a process. “Steady habits matter more than people think. Sometimes improving a score is not about doing one dramatic thing. It’s about cleaning up a few problem areas and staying consistent long enough for the score to respond.”

Here are a few additional tips from Lokenauth, Kovar, and Clayton to help improve your credit score:

• Check your credit report for errors

• Pay every bill on time

• Keep credit card balances low compared to the limit

• Never close old accounts, even if you don’t use them

• Negotiate pay-for-delete with creditors

2. Cut Your Debt

According to Kovar, “Cutting debt is where broad advice usually falls flat, because people need something they can actually stick to.” The practical advice is to list every debt, the balance, the interest rate and the minimum payment.

Lokenauth offers a similar strategy. He suggests that you make minimum payments on everything, then attack the top of the list with every extra dollar you can find.

He also says to “look at balance transfer cards with 0% intro periods, typically 12 to 18 months. Moving $5,000 to $10,000 in credit card debt to a 0% credit card and paying it down during the promo can save $1,000 to $2,000 in interest alone.”

He also recommends finding one fixed expense to cut — it could be a “recurring charge, or bill you haven’t renegotiated in two years, and redirect that amount to debt. Even $75 a month accelerates a payoff timeline by years.”

3. Lower Your Cost of Living

Lowering your cost of living may mean taking a hard look at where you live.

According to Lokenauth, “the highest-impact move is the one people resist most: housing. Rent in the cheapest states, like South Dakota and Arkansas, runs under $1,000 a month. In California or Hawaii, it’s over $2,100. That’s $13,000 to $14,000 a year in savings, just from geography.”

Moving is not an option for everyone, but this is a real and life-changing calculation.

For those who can’t move, grocery discipline and gas strategy are quick ways to save money. You can buy the store brands of the 15 to 20 items you buy every single week. “That swap alone saves most households $800 to $1,200 a year with zero lifestyle change.

For refilling your gas tank, use apps to find the lowest price within a reasonable radius, Lokenauth suggests.

Kovar suggests that “in many cases, the goal is to find a few meaningful adjustments that create room without making the whole plan feel impossible.”

Photo credit: Django / iStock

Sources

• Consumer Financial Protection Bureau. "Financial well-being: What it means and how to help."