What makes Americans fall behind in their finances? Evidence from the national well-being survey

The question of how often Americans fall behind on their finances is analyzed using the National Financial Well-Being survey of the United States Consumer Financial Protection Bureau. An ordered logit model is proposed to study the effect of individual and household characteristics on the likelihood of falling behind in one's finances. The analysis shows that traditional variables such as income, age, education, and health are statistically significant predictors of falling behind in one's finances. In addition, the study shows that the volatility of income, saving habits, and individuals' financial knowledge significantly contribute to the explanation of Americans' economic behavior.

Automated summary

The frequency of Americans falling behind on their finances is analyzed using the National Financial Well-Being survey. An ordered logit model is proposed to study the impact of individual and household characteristics on this likelihood. The analysis reveals that income, age, education, health, income volatility, saving habits, and financial knowledge significantly contribute to Americans' economic behavior.