All over the country, financial troubles are keeping working Americans up at night, and it is even damaging their mental health. According to a recent study by Fidelity Investments, 51% of people say they are just breaking even or spending more than they earn per month.
“The score is based on what we believe are the four key domains of Financial Wellness: budget, debt, savings and protection, all of which are equally significant,” says Jeanne Thompson, senior vice president of thought leadership at Fidelity Investments. “The score is unique in that it accounts for objective criteria, such as how much savings a person has and how they manage expenses, and subjective criteria, like how they feel about their finances. We believe Financial Wellness means being well and feeling well.”
Although the tool will be available to employers in the summer, Fidelity has conducted a survey of more than 6,000 people to determine how well they are doing in each of these four money management categories as well as how they feel about each.
The results indicate that 14% are financially “excellent” (a score between 81 and 100), 37% are “good” (a score between 61 and 80), 33% are “fair” (a score between 41 and 60) and 16% “need attention” (a score between 0 and 40).
The survey also found that Generation Xers seem to be the most financially stressed with 52% saying they feel neutral or negative about their debt; meanwhile, 65% of Boomers feel like their debt is manageable.
Not surprisingly, the survey found that money tends to bring happiness. Fifty-seven percent of those surveyed said they could not be happy unless they are financially secure. Millennials are more likely to feel this way than other generations, with 66% agreeing with the statement. The study also indicated that planning for the long-term has its rewards. Those planning for more than 10 years ahead tend to be in excellent financial health, while those planning for the next few weeks are in need of the most attention.
Moreover, the survey found that women are twice as likely as men to feel worried or sick about their financial situation.
“When the Financial Wellness Score is made available this summer as part of Fidelity’s Money Checkup, it will be a wake-up call for some employees and for others it will bring peace of mind,” says Thompson. “The score will bring clarity to where they stand financially and put a spotlight on next steps. We’ll be working with employers on how they can incorporate this Financial Wellness measure as part of their strategy to give employees the financial confidence and control they need.”