Your Financial Health Score
Understanding where you are lets you know what steps to take next. Answer 8 simple questions about how you spend and save — and then see how to build your financial health.
“Financial literacy” is a widely used term that refers to the skills and knowledge you use to make financial decisions. But it sometimes suggests poverty and other money crises stem solely from a lack of knowledge — an assumption the ignores the complexities of life. Think instead in terms of “financial health,” which measures your ability to handle financial stressors and reach your long-term goals.
You can improve your financial health with a series of actionable steps that build stability over time. Use the eight-question quiz below, which leverages the Financial Health Network FinHealth Score® Toolkit, to understand your starting point. Then read on to discover the next steps for leveling up to greater security.
How to improve your financial health
For most people, attaining financial health is a journey. Your journey may begin in crisis — during a period of unemployment or low wages, for example — or you may be in a good-paying job with benefits and ready to save for your children’s college fund or maximize your retirement savings.
Your score in the financial well-being assessment above gives you an idea of where you are. The three sections below expand to provide helpful guidance. Start with the one tailored to your score, but also feel free to check out the next section to how your journey will continue.
If you’re financially vulnerable (0-39 points)
“Financially vulnerable” means you likely have a hard time keeping up with your bills and may be unable to save for the future. A surprise bill such as a car repair or doctor’s visit can spell disaster when you’re in this position — you don’t have a financial cushion and might not have access to low interest loans or credit when you need to cover an unexpected expense.
Here are some resources that may help you in a crisis and lay the groundwork for greater financial security.
- How to Pay Bills When You Can’t Pay Your Bills: If you can’t cover everything, check out these sources of help and strategies to minimize the fallout.
- 6 Ways to Get Free Money From the Government: Programs include help with utility costs, child care, college — even help with a down payment on a house.
- What is a Payday Loan? These high-cost, short-term loans are risky, but there are alternatives.
- Beware of Predatory Lenders: Know the warning signs of a toxic loan.
- Banking 101: The traditional banking system has some benefits alternatives don’t, such as fraud protection, free check cashing and access to lower-cost loans.
- Emergency Fund: What It Is and How to Build One: Research shows even a few hundred dollars in reserve can mean budget shocks don’t derail your life.
- How to Build a Budget: A plan for maximizing your money doesn’t have to be complex.
- What You Need to Know About Building Credit: Building your score can save you money and let you borrow at better rates.
- A Simple ‘Recipe’ for Managing Your Credit Score: Know a few key ways to build your score.
If you’re financially coping (40-79 points)
As someone who is financially coping, you may be thriving in some areas but struggling in others. Perhaps you are buried by debt but manage to make all of your minimum payments on time, or you manage your debt well but aren’t saving for retirement. Like the financially vulnerable, an unexpected expense could destabilize you.
More than other groups, you may find helpful resources in all categories, but here are some to help address possible financial pain points and shore up your security.
- Buying a Home With Bad Credit: It is possible — here’s what to know.
- First-Time Home Buyer Guide: Those new to the housing market have some key help.
- How to Save for a Down Payment: You might not need as much as you think.
- Down Payment Assistance: Getting Help Buying a House: These programs can help, even if you’re not new to the housing market.
- How to Manage Your Money: These strategies help you make sure each dollar does the most for you.
- Intro to Retirement Planning: Start where you are and with what you have. Every bit helps.
- Beginner Guide to Investing: What to know about goals, timelines and the amount of risk that makes sense for you.
- College Savings Strategies: Explore the many ways you can set aside money over time.
If you’re financially healthy (80-100 points)
Financially healthy folks are successfully managing all aspects of their financial life. They have good to excellent credit, a handle on debt, an emergency savings fund and are on the right track for retirement. The goal for you, if you fall in this category, is staying the course and reaching your financial goals.
Here are some resources to maximize your efforts and ensure you’re getting the most out of the optimal position you’re in.
- How to Achieve Perfect Credit: An excellent score unlocks the best terms, but some people like to aim for 850.
- Investing Your Savings For Short- and Long-Term Goals: Knowing the timeline you’re on helps you make the best choices.
- What Is Asset Allocation? Learn about balancing where you put your money to best reflect your age, goals and risk tolerance.
- Choosing a Financial Advisor: Find a professional to help you meet your goals.
- How to Save More for Retirement: It’s all about how you account for savings in your budget.
- Best Investments for Any Age or Income: Fine-tune your approach, depending on your circumstances.
- IRAs vs. 401(k): How to Choose: How to weigh what account is best for you.
- Choosing the Best Index Funds: Learn more about an easy, hands-off, low-cost way to invest.
- How to Invest in Stocks: Get started with an online brokerage account — it’s easier than you might think.