Demographic Factors Associated With Financial Health

Financial health, an essential aspect of well-being, is shaped by various factors, drawing attention from diverse stakeholders. Unlike previous research, financial health is defined as an alternative objective measure of financial well-being, which is an index formed by indicators of spending, borrowing, saving, and planning. The current study examines the financial health of individuals by their level of financial resilience and capacity to pursue opportunities. Analyzing data from the National Financial Capability Study across 2015, 2018, and 2021 showed significant variations in financial health by year and state of residence. Key findings highlight associations between demographics (age, gender, race, education, marital status, income, and employment status) and financial health, collectively accounting for 39% of the variance in the Financial Health Index. Individuals aged 25–34 years, non-White respondents, those with less than a bachelor’s degree, divorced or widowed individuals, those earning less than $25,000 annually, and those with part-time employment or disabilities exhibited the lowest financial health scores. Interaction effects show that the associations between demographic characteristics and financial health varied significantly across survey years and states of residence, highlighting the need for tailored financial health improvement strategies. The results offer insights into how daily financial decisions and demographic factors are associated with individuals’ overall financial health. Educators, practitioners, and policymakers can use these results to tailor educational programs, client assessments, and targeted policies to effectively address different demographic groups’ specific needs and challenges.