10 of the Absolute Best and Worst States for Financial Well-Being

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While we were stuck inside during the pandemic, we sunk our teeth into online shopping. Between 2018 and 2022, spending on nonessential items went up by 32% according to StorageCafe.

Having little contact with the outside world, it’s no surprise that magazines, newspapers and stationery saw the biggest increase in spending with a 60% jump. Right behind that category was recreational goods and vehicles with a 59% increase.

On average, Americans spent $12,000 on discretionary items like food, hobbies and vacation costs. This ended up consuming about 23% of the average consumer’s budget. 

Though these are national statistics, not all states are affected equally. StorageCafe took a look at money spent on discretionary items, household income and the number of high-income earners to determine which states were faring best financially, and which were barely getting by. Here’s a closer look at the states with the best and worst financial well-being.

States With the Best Financial Well-Being

1. Colorado

At the top of the list for stellar financial well-being was Colorado. Known for its wealth of outdoor activities during the winter and laidback lifestyle all year long, it’s not hard to imagine residents feeling financially set. The state’s economy has made great strides over the past five years with incomes rising by 23.7%. The number of high-income earners rose by 10%, with most people in the state able to dedicate 27% of their budget to nonessential items. 

2. Utah

There might be something behind ski and snowboard culture that lends itself to feeling financially fulfilled. Utah was right behind Colorado on the list. Their incomes went up by 25% over the past five years and high-income earners went up by 12% — the biggest increase in the country. Those in Utah can dedicate 9% of their budget to nonessential items on average. Most Utah residents opt to spend their extra cash on recreational goods and vehicles. 

3. Washington

Residents of Washington get to enjoy the mountains, the water and a little extra cash in their wallets. On average, those in Washington spent 24% of their money on nonessential items. They saw their income go up 26% over the past five years, and the number of high-income earners went up by 10%. Another bonus: there is no personal income tax, so Washington residents get to take more of that money home and spend it on what they like, which happens to be eating out and recreational services. 

4. California 

California’s consumer discretionary spending per capita came in at $14,578 — one of the top-ranking states in the country. The average household income is $131,504, with incomes rising 22.5% in the past five years. Californians spend 24% of their budget on nonessential goods.

5. Florida

Households in Florida are able to dedicate a quarter of their budget to nonessential spending. Incomes have gone up 24.2% in the past five years, giving more people that boost they need to budget for extras. The growth in high-income earners has gone up 9%.

States With the Worst Financial Well-Being

1. Mississippi

Compared with states at the top of this list, Mississippi just didn’t see the income growth or the ability to spend more on nonessentials. Over the past five years, the state has seen a 17% increase in income, and only a 7% increase in high-income earners. The state’s average household income is $72,624, which is also the lowest in the country. Compare that with Colorado, which sees an average household income of $119,039. 

2. Arkansas

Arkansas’ average household income is not much higher than Mississippi’s at $76,853, and wages have increased even less. Over the past five years, Arkansas has only seen a 15.1% increase in income, and only a 5% increase in the amount of high-income earners. Those in Arkansas see $8,466 in consumer discretionary spending per capita, which is the lowest in the country. That’s compared with Colorado, which sees $15,860. 

3. Oklahoma

Like Arkansas, Oklahoma didn’t see a huge rise in income over the past few years. Wages only went up by 15.5%. High-income earners went up by 6%. For consumer discretionary spending per capita, Oklahomans spent $8,950. Compare that with Utah, where that number was $12,832. 

4. Louisiana

For consumer discretionary spending per capita, those in Louisiana have $9,351, which isn’t too bad. However, incomes have only increased by 14.4%, which is the third lowest in the country. The state only saw a 5% increase in high-wage earners, which is the lowest percentage seen nationwide. 

5. West Virginia

West Virginia has the second lowest consumer discretionary spending per capita in the country at $8,212. Their average household income is also the second lowest at $75,265. The good news is that West Virginia actually saw some pretty steady income growth in the past five years at 22%.

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