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April 19, 2023

Report finds Maine second-most 'financially challenged state'

By Alexis Wells

Rising levels of debt, inflation and the high cost of housing, fuel and food have driven Maine's rank in one study as the second most financially challenged state in the U.S.

A state-by-state analysis by Uplift Legal Funding analyzed six factors, including the percentage of annual incomes spent versus the percentage of income saved; debt-to-income ratios; annual bankruptcy rates, and the number of saving and debt-related Google searches per state.

The study pegged Maine at No. 2 with a score of 96.6%. Maine ranks the highest for annual average income spending, leaving residents with only 3.4% of disposable income to save. Residents were also more likely to search for “ways to save money” (321.9 searches per 100,000 residents). 

Maine also ranked the third-highest for debt-related Google searches, at 521.2 searches per 100,000 residents.

Although Maine ranked high for low disposable income and Google searches related to saving money, there's good news: the Pine Tree State had the third-lowest personal bankruptcy rate at 47.7 per 100,000 residents.

Maine was behind only No. 1-ranked Montana and ahead of Missouri, No. 3 among the most financially challenged states. South Carolina, Arizona and Florida were the least challenged, according to the study.

Hawaii, Idaho and Maryland were ranked with the highest debt-to-income ratios. 

“Consumer debt levels saw an annual increase of 7% last year,” said a spokesperson for Uplift Legal Funding. “The largest percentage increases were for personal loans, where total balances increased by 18.3%, and credit card balances increased by 16%.

"In the current economic climate, it is to be expected that US citizens are turning to search engines like Google to better discover ways to alleviate debt and save money faster. With consumer debt levels rising in line with the cost-of-living and inflation, the research aims to highlight the importance of living within means and creating personal finance plans.”

In just the past year, the number of Americans facing financial challenges grew to 55%, which was a nearly 20-point increase from the year prior, according to a KeyBank 2023 Financial Mobility Survey.

KeyBank
Kelleen N. Longfellow, KeyBank

“In addition, 2 in 5 people (42%) reported feeling overwhelmed or burned out as a result of their financial challenges, with Millennials (52%) and those under 35 (54%) experiencing burnout more acutely,” said Kelleen N. Longfellow of Keybank in a recent article she wrote for Mainebiz.

“Regardless of where they are in their financial journey, 85% of respondents have acknowledged that more financial knowledge and strategies could bolster their financial resilience in these times of continued economic turbulence and uncertainty.”

In “How to create a financial wellness program for your employees,” Longfellow discusses money management strategies that can address both short- and long-term financial goals. She includes plans for paying down debt, planning for retirement, individually targeted financial counseling, managing unexpected events, and budgeting practices.

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