(To see the latest Happiness Index results, read our May 2009 report here)

The folks in Nebraska are happier than you.

The state that brought you "Kool-Aid” and “CliffsNotes” and the world’s richest person, Warren Buffett (Stock Quote: BRK.A), is feeling better off than the rest of us, according to MainStreet.com’s new Happiness Index.

We all know that money alone can’t buy happiness, but having a job, home and enough money to cover your basic budgetary needs is a good start.

The Cornhusker state was awarded the top ranking because:

  • It ranked 2nd overall in lowest number of foreclosures
  • It ranked 2nd in lowest unemployment rates
  • It ranked 5th in lowest percentage of non-mortgage debt by income

The Happiness Index, which looks at household income, debt, employment and foreclosures, is a fresh take on the old and tired Misery Index, made popular in the 1970s. The Misery Index takes into account unemployment and inflation rates and seeks to identify the most financially miserable places to live.

The Happiness Index, on the other hand, is all about which states are best weathering the current economic storm.

Contrary to popular wisdom that densely populated urban areas of the country have ‘recession-proof’ housing markets and boast impressively high average salary ranges, The Happiness Index suggests that the Midwest is the main source of financial happiness. After Nebraska in the top spot, Iowa and Kansas came in at 2 and 3 on the list of the most financially happy states.

Other states did better than Nebraska in particular areas, but none had a higher blended average. Maryland, for example, was burdened by higher unemployment and foreclosure rates despite having one of the lowest percentages of annual income spent on non-mortgage debt.

There are some interesting trends that can be gleaned from the Happiness Index. Not surprisingly, many of the states that experienced a boom during the housing bubble have more recently fallen by the wayside with increased foreclosures and debt.

Just as the U.S. economy evolves, so too will the MainStreet.com Happiness Index. Although Oregon currently falls at the bottom of our list, the state is well positioned for a boost in the future due to its potential for an influx of green jobs.

The opposite case can be made for Nebraska, which could fall from the top of the list with time. Its economy relies heavily on corn production, which is subsidized by the government to create corn ethanol - an alternative energy source. But the future of corn ethanol is uncertain. Many believe that it's no longer a big part of the solution to our climate change or foreign oil problems. That could be bad for Nebraska and ultimately make it a less happy place to live.

Check back with MainStreet.com every month as we update the list.

Also, check out some coverage of the Happiness Index on ABC's Good Morning America.

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