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This month folks in Massachusetts have more reasons to be happy, at least in terms of money matters. West Virginians, not so much. And we'll get to how California is feeling (financially) later. Let's just say things are not so sunny in the golden state.

It's been one month since the premiere of MainStreet's exclusive national financial happiness index and we're back with an update.

There were some interesting shake ups in the index rankings. However, Nebraskans have every reason to smile: They are sitting firmly at the top as the nation's most financially happy state once again.

The Happiness Index, which analyzes household income, debt, employment and foreclosures (see full chart below), 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.

Our Happiness Index, on the other hand, is all about which states are best weathering the current economic storm. The answer to that question appears to be resoundingly in favor of Nebraska, Iowa, and Kansas. They have retained their respective 1st,  2nd, 3rd place rankings this time around.

Drop Downs:
The most notable changes from last month in the index fell to those states struggling at the bottom of the list. Many of the states that experienced a boom during the housing bubble have more recently fallen by the wayside with increased foreclosures and debt.

  • California (previously in the 49th position) has now earned the infamous distinction of least financially happy state (51st overall) in the country. Contributing to this slide were the state's increasing unemployment numbers (from 10.5% to 11.2%) and a steady stream of foreclosures.
  • Also of note, West Virginia, which was 9th overall last month, is now sitting in the 18th position. An increase in the unemployment rate (from 6% to 6.9%) and a large increase in the number of foreclosures caused this dip.
  • Wisconsin fell from 10th overall to 21st overall. An increase in the unemployment rate from 7.7% to 8.5% is largely to blame.

Jump Ups:
There were also some states surging ahead. With most non-mortgage debt levels staying consistent across the states from month to month, these fluctuations in the index were due largely to changes in unemployment rates and foreclosure ratios.

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  • Massachusetts (previously in the 25th position) experienced a big pop this month as it jumped 12 spots on the index to become the new 13th overall most financially happy state. This change is attributed to a significantly lower number of foreclosures in the month of March.
  • New Jersey saw a big jump as well as it climbed from previously being 29th overall to now sitting in the 19th position. This change can also be attributed to a significantly lower number of foreclosures in March compared to February.
  • It's hard to lay praise on Oregon for climbing up from the absolute worst ranking (51st overall) last month to becoming the new 48th. But this was despite the state still holding claim to one of worst unemployment rates in the country (12.1%), second only to Michigan (12.6%).

Be sure to check back with each month to see how the Happiness Index changes.

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