Seven-tenths of households are in poor financial health

A new report from the Financial Health Network has found 70 percent of American households remain financially unhealthy, with many experiencing a worrying slide in their day-to-day financial conditions.

The 2024 Financial Health Pulse Trends Report highlights the growing financial vulnerability among middle-income households, particularly those with credit card debt.

The research indicates that credit card debt has a significant impact on households' ability to manage day-to-day finances, with moderate- and middle-income families experiencing the steepest declines.

“The data clearly show financial health in America—especially that of moderate and middle-income households—remains precarious and is influenced by a reliance on credit to stay afloat,”  Jennifer Tescher, president and CEO of the Financial Health Network said in a statement.

Between 2023 and 2024, households carrying credit card debt reported decreases in key measures of financial fitness including paying bills on time (60 percent to 57 percent), maintaining savings for at least three months (40 percent to 37 percent), and managing debt (51 percent to 48 percent). In contrast, households without credit card debt largely maintained stable financial health indicators and even saw an increase in confidence toward meeting long-term goals, rising from 49 percent to 54 percent.

The report also emphasizes the disparity between households with and without investments. Those with investments such as retirement accounts demonstrated stronger financial health, with 41 percent categorized as "financially healthy," compared to just 9 percent of households without investments.

Households with investments are also playing the long game well with year-over-year increases in future-oriented financial health indicators, including confidence in meeting long-term goals and planning ahead financially, according to the report.

While a decrease in interest rates may offer a measure of relief to everyday American households, Kennan Cepa, director, policy and research at the Financial Health Network called on industry players to take more proactive steps to help.

“By embracing financial health in product design and ensuring access to essential workplace benefits, industry can be critical drivers of financial health even when macroeconomic forces pose a challenge for consumers,” Cepa said.