Just as weight, nutrition, and exercise can give you an idea of someone's physical health, a few basic personal characteristics can predict financial well-being with surprising accuracy. Among them: Did you save any money last year? Did you miss payments on any obligations in the past year? And did you have a balance on your credit card after the last payment was due?
This is according to a "financial health scorecard" recently released by the St. Louis Fed, which tracked both financial health and net wealth. Authors William Emmons and Bryan Noeth relied on a series of demographic groupings including age, race and ethnicity, and educational achievement to form 48 non-overlapping groups. While the groupings helped establish correlation across questions, they also revealed some troubling patterns.
Chief among them: While educational attainment has long been considered crucial to expected future financial health, it's not as strongly associated as either age or race and ethnicity (things Americans can't change about themselves). Older families tend to have greater financial health than their younger counterparts, regardless of race and ethnicity or education. And white and Asian families typically enjoy better financial situations than Hispanic and African-American ones, irrespective of other variables.