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According to Business Insider, the average American has about $104,000 in debt. This number includes mortgages, home equity loans, car loans, credit cards, student loans, and many other types of debt. But that is nothing compared to the enormous amounts of debt some U.S. states have. In fact, several states rank among the states with the most debt per capita, highlighting the financial challenges they face.
With so much talk of financial responsibility and improving citizens’ financial literacy by adding personal finance graduation requirements, one might think legislators would take a closer look at their own financial hygiene. Having a healthy and well-managed state budget is vital in many ways, from ensuring infrastructure is maintained in a timely manner to attracting more businesses and jobs for residents. However, some states struggle with financial management, landing them among the states with the most debt per capita.
Individual states can’t just print money to pay their debts and balance their budgets, and many seem to spend without regard to any potential consequences. Just like spending beyond your means has consequences for your personal finances, the same is true at the state level. Here are the 12 states with the most debt per capita you should know.
Massachusetts
Massachusetts has an estimated debt of $11,000 per capita. That means that for every single person living in the states, there’s over $11,000 in state debt. Not even large states like Texas and California have that much debt.
Connecticut
Connecticut is one of the most expensive states in the US to live in, and with over $10,500 in debt per capita, that’s no surprise. The state reinvests heavily in infrastructure, but that’s still a lot of debt to carry.
Rhode Island
Even though this is the smallest state in the US, it still carries a lot of debt, over $8,000 per capita. This is partly because even though the state is small, it’s densely populated, often leading to increased debts.
Alaska
On the other end of the spectrum sits Alaska. Even though it’s sparsely populated, it still carries a debt of a little more than $8,000 per capita. This is partly because residents pay no income tax.
New York
New York carries a debt of over $7,000 per capita, which is not surprising, as it’s another densely populated state. Residents also need a higher-than-average income to live comfortably in New York, which doesn’t help.
New Jersey
New Jersey is one of the highest-taxed states in the US, but it still has a debt of more than $7,000 per capita. Part of the problem is an unfunded benefit and pension system for public employees.
Hawaii
Hawaii is such a beautiful state that I wonder if residents even worry about the almost $7,000 per capita debt. The beautiful weather and beaches would definitely help me forget.
New Hampshire
New Hampshire boasts more than $5,500 debt per capita. Most of the debt comes from overspending in education and public welfare such as Medicaid and public hospitals.
Vermont
Next to New Hampshire, Vermont’s debt per capita is almost the same at $5,400. Vermont also spends most of its money on Medicaid and education.
Illinois
Illinois carries a debt of almost $5,000 per capita. The biggest state debt is money spent on health benefits and pensions for retired government workers.
Maryland
Maryland has a little over $4,500 in debt per capita, which is quite a lot less than some states on this list but still enough to make the top 12. As with many states, the biggest expenses are retirement benefits for state employees.
Delaware
Another small, densely populated state, Delaware, boars $4,400 debt per capita. The state collects no sales taxes, which is great for residents but not for the state. Much of the debt also goes to unfunded retirement benefits.
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One of my favorite things about this country is the differences in each state. A cross-country road trip can take you from the mountains to the desert, coast, and swampland, with each region representing its unique charm and culture. I’m an avid road tripper and have spent some time in these small towns. They left their mark on me in the best way possible.
16 Things That Are So Expensive That People Now Do Without
The cost of living in the United States has skyrocketed in the last four years. So, what happens when the cost of living goes up? We stop buying certain things. I can think of many items and luxuries I’ve let go of because they’ve gotten so expensive.
Honestly, with the increasing prices, it’s not worth it. Maybe you’re experiencing the same dilemma. It’s hard to decide how to buy the things we need without breaking the bank. To help with those tough decisions, we curated these things based on luxuries and wants instead of needs.
Some may be more difficult than others to let go. However, in the end, we think it makes sense. What about you?
12 Budget-Friendly Travel Destinations You Thought You Couldn’t Afford
Just because you’re watching your money doesn’t mean you can’t enjoy a trip abroad. All it takes is a little sifting through countries with the lowest exchange rates. Located in the Americas, Europe, Southeast Asia, and Africa, these hot spots offer dynamic cities to explore and stunning landscapes to escape it all.
These exotic locations allow you to splurge without blowing a stack of cash. These destinations were chosen by sorting through the lowest exchange rates for each country against the U.S. dollar. Then, the final selection was made by examining features, including safety, the quality of cultural and outdoor activities, and easy accessibility to natural beauty, such as mountains, rivers, and the ocean.
So, if you’ve avoided international travel due to cost, we think the places on this list represent a great opportunity you probably didn’t know about.
