Behind the rosy headlines of a soaring stock market and historically low unemployment levels, a majority of U.S. households are struggling with their financial health, according to a November 2018 report from the Center for Financial Services Innovation (CFSI).

“Loan defaults are inching upward and credit card debt is nearing an all-time high” hovering around $13.3 trillion, the report says.

“Total household debt is higher than it was before the [2007] financial crisis, baby boomers are nearing retirement with insufficient savings [with a collective savings deficit between $6.8 and $14 trillion], and Americans of all ages are buried under mounting student loan debt.”

In order to gauge the financial success of Americans as a whole, CFSI reviewed eight aspects of how Americans spend, save, borrow and plan with their money:

1. Spend Less Than You Earn

2. Pay All Bills on Time

3. Have Sufficient Liquid Savings

4. Have Sufficient Long-Term Savings

5. Have a Manageable Debt Load

6. Have a Prime Credit Score

7. Have Appropriate Insurance

8. Plan Ahead for Expenses

8 Financial Health Indicators That Measure Financial Health

To gauge Americans’ financial resiliency, CFSI surveyed 5,019 U.S. residents age 18 and older between April 26 and July 4, 2018, and inquired about eight aspects of their financial lives.

What CFSI found was a majority of Americans, 55 percent, are financially coping.

In other words, 138 million people in the U.S. are struggling with some, but not necessarily all, aspects of their financial lives.

• Around 28 percent of Americans were classified as financially healthy, according to CFSI, meaning they spend, save, borrow and financially plan in a way that allows them to be financially resilient.
• Close to 17 percent of Americans were classified as financially vulnerable, meaning they struggle with all, or nearly all, aspects of their financial lives.

Keep reading to learn more about the eight indicators of financial health!

1. Spend Less Than You Earn

• 47 percent of Americans say their spending equals or exceeds their income.

For some of the respondents, their spending exceeded their income due to income and expense volatility.

• 43 percent of Americans who spend more than they earn turn to credit cards to make ends meet.
• 10 percent of Americans said they used non-retirement savings to make ends meet.
• 41 percent of respondents who spend more than they earn noted they may have been more cash-strapped due to unusually high spending, unusually low incomes or both.
• 26 percent said they always spend more than they earn, which CFSI says suggests that living beyond one’s means may be a permanent state of affairs for millions of Americans.

2. Pay All Bills on Time

• 36 percent of respondents are unable to pay all of their bills on time.
• 93 percent said they were unable to pay all of their bills on time in the last 12 months.
• 87 percent of individuals who received and spent their 2018 tax refunds reported using the money to pay their bills.

3. Have Sufficient Liquid Savings

• 45 percent of Americans say they don’t have enough saved to cover at least three months of living expenses.
• The median savings account balance for Americans deemed Financially Healthy is $44,000, compared to $4,500 for Financially Coping individuals and just $300 for Financially Vulnerable individuals.

While Americans’ savings accounts may have much less money in them than what financial experts may recommend, however, CFSI found it’s not due to a lack of trying to save that’s the issue.

• 79 percent of respondents reported saving regularly whenever possible in their savings accounts.
• 75 percent of respondents said they are saving regularly or whenever possible in the form of cash.
• 70 percent of respondents reported saving or whenever possible in other savings vehicles such as mutual funds, money market accounts, stocks, certificates of deposit and annuities.

4. Have Sufficient Long-Term Savings

• 37 percent of Americans reported they are not confident they’re on track to meet their long-term financial goals.
• 42 percent of respondents reported having no retirement savings at all.
• Financially Healthy Americans have a median value of $106,000 in their retirement accounts.
• Financially Coping Americans have a median value of $25,000 in their retirement accounts.
• Financially Vulnerable Americans have a median value of $4,000 in their retirement accounts.

Despite the low retirement savings balances, a majority of respondents reported actively participating in employer-provided retirement plans.

• 74 percent of Financially Healthy and Financially Coping Americans are saving regularly in employer-provided retirement accounts.
• 55 percent of Financially Vulnerable individuals regularly contribute to employer-provided retirement accounts.

5. Have a Manageable Debt Load

• 30 percent of Americans say they have more debt than is manageable.
  • 27 percent of all respondents reported their debt prevented them from saving for retirement.
  • 13 percent of Financially Coping individuals said their debt has prevented them from retiring.
  • 42 percent of Financially Vulnerable individuals said their debt has delayed or prevented them from seeking or receiving medical care.

Excluding mortgages and home equity lines of credit:

• The Financially Healthy have a median debt load of $19,000.
• The Financially Coping have a median debt load of $20,000.
• The Financially Vulnerable have a median debt load of $25,000.

Among respondents who reported their debt is unmanageable:

• 27 percent of respondents said their debt has prevented them from saving for retirement.
• 13 percent of Financially Coping individuals said their debt has prevented them from retiring.
• 42 percent of Financially Vulnerable individuals said their debt has delayed or prevented them from seeking or receiving medical care.

Many Americans don’t think debt freedom is coming anytime soon either:

• 38 percent of all respondents with non-mortgage debt believe they will still have debt five years from now.

6. Have a Prime Credit Score

• 27 percent of Americans say they do not have prime credit scores.
• 15 percent of all respondents said they have “fair” credit scores.
• 12 percent of all respondents said they have “poor” credit scores.
• 6 percent of all respondents said they do not know their credit scores.

7. Have Appropriate Insurance

• 37 percent of Americans are not confident their insurance policies will cover them in an emergency.

Those at the lower end of the financial health spectrum are less confident about their insurance coverage.

• 40 percent of Financially Coping individuals are not confident their insurance policies will provide enough support in an emergency.
• 79 percent of Financially Vulnerable individuals are not confident their insurance policies will provide enough support in an emergency.

Financially Coping and Vulnerable individuals are also less likely to have insurance policies in the first place:

• 37 percent of Financially Vulnerable individuals and 60 percent of Financially Coping individuals have life insurance, compared with 72 percent of Financially Healthy individuals.
• 71 percent of Financially Vulnerable individuals and 88 percent of Financially Coping individuals have health insurance, compared with 98 percent of Financially Healthy individuals.

8. Plan Ahead for Expenses

• 40 percent of Americans do not agree with the statement “my household plans ahead financially.”

Still, many Americans are trying to financially plan ahead:

• 48 percent of respondents said they use a budget to track their spending.
• 41 percent of respondents said they have an emergency savings account.

Behaviors highly associated with financial health:

• Having an emergency savings account.
• Having calculated how much savings are needed for retirement.
• Having talked with a financial advisor or planner.
• Using a budget or other type of plan to track spending.
• Using automatic transfers to put money into savings accounts.