JACKSON, Miss. ( WJTV ) – As day-to-day expenses increase nationally, a report indicates that Mississippians are among the worst situated to adapt to it.

Based on data from the U.S. Bureau of Labor Statistics, inflation has risen by about 23% since July 2019. Mississippi, the state with the lowest median household income nationally, is perhaps the least able to deal with such an increase. As a result, WalletHub notes in a September analysis that Mississippians have the worst budgeting behaviors nationwide.

The state ranks last nationally in three broad categories: its spending and debt rank, credit rank and its savings rank. Mississippi also has the highest share of households that do not have bank accounts and the second-highest share of people who borrow money from non-bank lenders.

Mississippians on average have the lowest credit score, the second-highest share of debt in proportion to median earnings and the fourth-highest credit card usage rate. Additionally, Mississippi has the second lowest share of residents nationwide with emergency savings and the lowest share of residents with sustainable spending habits.

Another WalletHub survey from April revealed that Mississippians are the 7th least financially literate nationwide. A related WalletHub analysis in February found that among citizens of all capital cities, Jacksonians are the worst at managing their money.

WalletHub provides the following five tips to help Mississippians be more financially frugal:

• Create an emergency fund
  • Set aside a bit every month with the ultimate goal of having at least three to six months’ worth of expenses in reserve in case of an extended income disruption. Even if your budget does not leave a ton of room for this, try to put at least a little bit of money aside each pay period.
• Do not neglect any part of your budget
  • When making a budget, bills and other essential expenses should naturally come first. In addition, it is important to try to put at least a small amount of money toward saving and/or investing each month, so that you can build your wealth and live more comfortably in the future.
• Rank Your expenses
  • Budgeting does not require you to give up all of your hobbies or creature comforts. It simply means prioritizing the most important expenses over less essential ones. By ranking your expenses in order of importance, you will be able to keep what you value most and avoid all the headaches that come with unnecessary debt.
• Use the avalanche method for debt management
  • In constructing your budget, make sure to account for monthly debt payments. When distributing those payments, you should pay the minimum on everything but the balance with the highest interest rate, to which you should allocate the rest of your monthly allotment until that balance is gone. Repeat that process until you are completely debt-free.
• Use the island approach
  • This strategy involves isolating different types of transactions to different credit cards for the best possible combination of terms. For instance, you might consider using a rewards card for daily expenses (which you pay off in full every month), and a 0% balance transfer card to lower the cost of existing debt.

Mississippi’s financial literacy may rise over the next few years. According to the Mississippi Department of Education, every Mississippi high schooler since 2022 must take and pass a College and Career Readiness course before they graduate. The course includes instruction on financial literacy.

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