The U.S. Financial Health Pulse from the Financial Health Network reports research findings on the financial health of Americans. From an overarching perspective, they categorize Americans into one of three financial tiers:
- Financially Vulnerable
- Financially Coping
- Financially Healthy
Before moving on, can you guess the percentage of Americans within each tier? Once you’ve made your guess, read on…
- Financially Vulnerable: 17%
- Financially Coping: 55%
- Financially Healthy: 28%
These numbers don’t really show the epitome of a healthy financial picture, do they? Even though more than half of Americans are financially coping, just “getting by” each month can be extremely stressful which in turn can cause emotional issues as well as even more financial problems.
So let’s see what the research says about other areas of the American consumer’s financial health…
- 47% are spending more than or equal to their income
- 36% are unable to pay their bills on time
- 45% don’t have enough savings to cover three months of living expenses
- 37% aren’t on track to meet their long-term financial goals
- 30% have more debt than they can manage
- 27% don’t have prime (good) credit scores
- 37% aren’t confident about their insurance coverage
- 40% don’t plan ahead financially
Interesting numbers. If you really focus in on the percentages, you’ll see that a large percentage of Americans aren’t handling their finances correctly. This, in turn, can negatively affect their credit score which makes taking out a loan more difficult when needed.
Financial Health Trends and the Potential Price
It’s apparent by the numbers above that things need to turn around. Being financially healthy is important for all Americans – learning how to curb spending, save more, borrow only what’s needed and making financial plans for the future.
Right now, it doesn’t appear as though that’s happening. Take a look at some of the current trends:
- Americans who had financial struggles growing up are less likely to be financially healthy today. The opposite is true for those who did not struggle – they are more likely to be financially healthy.
- Here’s some good news: Education and stable employment may offset the effects of childhood circumstances.
- Wages have risen by just 10% since 1973, while housing, food, and healthcare costs have soared. Millions of Americans struggle daily to afford these necessities.
- Increased cost of living makes it more likely for people to be more financially stressed and less financially healthy.
- Americans with unstable jobs are falling behind as they strive for financial health.
- Employees with salaries in the $30,000 to $60,000 range are most affected by workplace instability and would gain the most from employer-provided benefits.
At this point in time, the financial health of Americans could use some improvement. The percentages attached to spending, savings, borrowing and planning are especially important because those are the items you can start working on immediately. When you visit myFICO.com, it’s easy to look around and find some of the answers you might need to help lower your stress and help make your finances healthier.
Remember, myFICO forums is a great place to see how others are dealing with financial issues as they try to enhance the health of their finances – a little bit at a time.