Money: US states with the worst debt records revealed

ByDr. Tim Sandle
August 24, 2024
DIGITAL JOURNAL

New York City: — Photo: © Digital Journal

A new study shows that the U.S. state where people struggle with personal finances the most is Massachusetts, with the average card debt growing $2,999 in the last three years. New York is second in the list, with the credit card debt summing up to 33.93 percent of the residents’ disposable income.

In contrast, the District of Columbia stands out with the smallest disposable income of only $1,089.

The recent study comes from the firm The Stock Dork. who analysed all U.S. states and the District of Columbia to identify the states that struggle with personal finances the most. The information about average card debt and its growth over the last 3 years was collected and compared with average salary, cost of living and disposable income. The data was collected from Forbes, US Census and Experian. The debt to salary and debt to disposable income rates were calculated and used for the final score.

The data summary indicates:

State	Average card debt 2023	Card debt growth 2021	Average salary	Debt to salary rate	Disposable income	Debt to disposable income rate	Score
Massachusetts	$8,447	$5,448	$76,600	11.03%	$22,740	37.15%	69.34
New York	$8,566	$5,583	$74,870	11.44%	$25,247	33.93%	69.09
New Jersey	$8,909	$6,115	$70,890	12.57%	$21,379	41.67%	65.02
California	$8,366	$5,567	$73,220	11.43%	$20,049	41.73%	64.28
District of Columbia	$7,536	$7,062	$79,898	9.43%	$1,089	692.01%	63.47
Maryland	$8,626	$6,164	$69,750	12.37%	$21,515	40.09%	61.03
Connecticut	$8,640	$6,516	$69,310	12.47%	$22,398	38.57%	59.09
Colorado	$8,134	$5,915	$67,870	11.98%	$21,939	37.08%	56.09
Rhode Island	$7,872	$5,324	$64,530	12.20%	$20,049	39.26%	53.45
Washington	$7,088	$5,560	$72,350	9.80%	$25,119	28.22%	52.42

As described above, the state that struggles with personal finances the most is Massachusetts, getting a composite score of 69.34 which reflects high average debt and its role in personal finances. The average credit card debt increased by $2,999, the biggest growth in the ranking. Massachusetts offers one of the highest salaries but cost of living cancels this advantage, leaving $22,740 of disposable income.

New York takes the second place in the ranking of the states that struggle with personal finances the most, scoring 69.09. The average card debt here is only $119 higher than in Massachusetts and the debt growth is similar. While New York offers a smaller average salary of $74,870, the disposable income is bigger than in Massachusetts, summing up to $25,247.

New Jersey is third, with a score of 65.02. The state hasthe highest average card debt, summing up to $8,909. A lot of income in New Jersey is spent on the cost of living, making the debt 41.67% of the disposable income, third-highest debt to disposable income ratio in the ranking.

California follows closely with fourth place and a score of 64.28. The card debt increased here a lot in the last three years, raising $2,799. The cost of living in California is similar to Massachusetts and it leaves people with a little over $20,000 in disposable income. The rate of credit card debt to disposable income in California ends up at 41.73 percent, the second highest in the list.

The District of Columbia takes fifth place in the ranking of the states that struggle with personal finances the most. The average card debt had the smallest growth over the last few years. The District of Columbia offersthe highest salaries in the top ten but the cost of living is only $1,089 less than the average salary which leaves people with almost no disposable income. In that situation the credit card debt becomes 692 percent of the disposable income while debt to overall salary ratio is the lowest in the list.