Here's an interesting post from NerdWallet that says only one in ten Americans is at peak financial health.
They determined "financial health" by creating an online survey which "asked more than 2,000 U.S. adults about eight important components of financial health."
They then weighted the questions to produce a financial health score for each person surveyed.
Only 10.5% of respondents received a perfect score. A perfect score was given to everyone who met all of the following:
- Money left over after paying critical bills and living expenses
- Three months or more of living expenses saved
- Confidence that retirement saving is on track
- All or most bills paid on time
- Credit card balances always or almost always paid in full each month
- Good to excellent credit score
- No debt or debt that does not disproportionately affect daily decision making
- Enough insurance coverage to protect against major financial loss
On one hand, you could say "no wonder only 11% met all the criteria because there are so many parts of it."
On the other hand, these are pretty basic criteria. If you can't meet these, you're probably hurting in one way or the other.
Here's how we stack up on the eight:
- We always had money left over after paying critical bills and living expenses. This is because we lived on much less than we earned.
- We generally had six months of living expenses saved in cash.
- I'm retired, so I'm confident we're on track here. ;)
- All of our bills are paid on time.
- We always paid off our credit cards every month.
- We have had credit scores in the 800 range for as long as I can remember.
- We had no debt other than our mortgage and even paid that off over 20 years ago.
- We have enough insurance to cover us against major financial loss.
Again, pretty basic.
If you wanted to see if someone was REALLY in great shape, I'd add in "saving a large percentage of income each year." Not sure what the percentage would be -- maybe 15%?
Thoughts on any of this?
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