Here’s what will boost your feeling of financial well-being the most, researchers say
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Here’s what will boost your feeling of financial well-being the most, researchers say
Vanguard survey found having at least $2,000 in emergency savings is associated with a 21% higher level of financial well-being. On the other side, those with an income of $500,000 or more saw a 12% boost. Most financial experts recommend having about three to six months of expenses accessible in an emergency savings fund. Those with over $1 million in assets had an 18% boost in financial well being, according to the survey, which asked thousands of clients about their financial situation.
The Brief Emergency savings are the strongest predictor of financial well-being, a recent Vanguard survey found. Vanguard’s survey found that having at least $2,000 in emergency savings is associated with a 21% higher level of financial well-being. On the other side, those with an income of $500,000 or more saw a 12% boost in financial well-being.
Some money experts have insight on what helps the average American feel better about their financial situation – and it has little to do with a high income or assets.
Emergency savings amount
Conclusion:
The investment adviser group Vanguard surveyed thousands of its clients about their financial situation , and found the strongest predictor of financial well-being and lower financial stress was having at least $2,000 in emergency savings.
By the numbers:
Those who have at least $2,000 in emergency savings were associated with having a 21% higher level of financial well-being, versus those who didn’t have any emergency savings.
Those who have an additional three to six months of expenses saved up saw an additional 13% boost in financial well-being.
Dig deeper:
Additionally, those with an income of $500,000 or more saw a 12% boost in financial well-being.
And those with over $1 million in assets had an 18% boost.
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Financial well-being
More perspective:
Financial well-being is a state wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life, according to the Consumer Financial Protection Bureau.
Dig deeper:
Vanguard asked how often people spent thinking about and dealing with their finances, and found that those who have an emergency savings fund spent 2.5 fewer hours per week on financial matters.
On average, those without emergency savings spent more than 7 hours per week on financial matters.
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Big picture view:
Most financial experts, including Vanguard, recommend having about three to six months of expenses accessible in an emergency savings fund.