The Center for Financial Services Innovation has identified eight indicators to measure financial health. These measurements can serve as a framework for guiding individuals and financial service providers toward an improved quality of life for consumers.
The eight indicators of financial health, presented in four categories, are:
- Difference between income and expenses
- Percent of bills that are paid on time and in full
- Number of months of living expenses in liquid account balances
- Amount of one’s long-term savings, assets, and investments
- Debt-to-income ratio
- Credit score or credit quality tier
- Type and extent of insurance coverage
- Behaviors that demonstrate future financial orientation
For additional information on financial health indicators, click here.
- Have students ask people to describe what is meant by “financial health.”
- Have students create a list of actions that might be taken to achieve financial health.
- What are additional factors that might be considered when measuring a person’s financial health?
- What actions are you taking to achieve financial health?