America is strong, but millions aren’t thriving
America is having one of its strongest financial runs ever. The economy is robust, the unemployment rate is the lowest it’s been in nearly 50 years, and wages are the highest they’ve been since 2008. But when we dig deeper, we see that millions of everyday Americans are barely making ends meet and experiencing high financial stress and low financial health. And that includes Americans in higher income brackets — financial stress doesn’t discriminate based on income level.
Let’s take a closer look by comparing two boroughs of New York City as an example. All data below reflects MoneyLion calculations using data sourced from third-party partners, as of October 2018.
Staten Island and Brooklyn: Income, debt, and financial stress
Debt, credit, and payments are top drivers of financial stress, so we measured these three factors for each borough and used the data to calculate a financial stress score (1 – 100).* A score of 1 indicates the healthiest levels of debt, credit, and payments — and minimum financial stress. Conversely, a score of 100 indicates dangerously high debt, credit utilization, and delinquencies — and maximum financial stress. So, how did Staten Island and Brooklyn stack up? The results may surprise you.
Staten Island is in the 80th income percentile, which means that residents, on average, earn more than 79% of the country. So you’d think they’d have low financial stress, right? Unfortunately, you’d be wrong. On average, Staten Island has a high debt-to-income ratio (83rd percentile nationally), high credit utilization (74th percentile nationally), and very high rate of payment delinquencies (93rd percentile nationally). This all gives Staten Island an elevated financial stress score of 85.
Now let’s look at Brooklyn. Compared to Staten Islanders, Brooklynites have lower income on average — they’re in the 60th income percentile — but they’re doing better overall in terms of financial stress factors. On average, Brooklyn’s debt-to-income ratio is healthier (43rd percentile nationally). Its average credit utilization rate is lower (61st percentile nationally), and its average rate of payment delinquencies is significantly lower (63rd percentile nationally). As a result, Brooklyn’s financial stress score is 57 — almost 30 points lower than Staten Island’s.
Financial stress is a nationwide issue
Staten Island is not alone. Financial stress is a nationwide problem. We estimate that 68 million Americans are financially stressed — even though it may seem like they are doing well for themselves. As our borough comparison shows, it’s not always about how much money you make. In fact, a 2015 Nielsen study found that 25% of American families making $150,000 or more a year still live paycheck to paycheck, and 33% of households earning $50,000 to $100,000 do too.
With no easy way to manage debt, unexpected expenses, and rising costs, financial stress is affecting tens of millions, across all income brackets.
Americans need an easy way to monitor financial health
All of this made us think … Why is there no easy way to monitor financial stress and strength? We measure physical health; we’ve got EKGs to monitor our hearts. We know high blood pressure is linked to low heart health. We measure our daily steps obsessively with Fitbit because we know a healthy heart is good for us.
So where’s the Fitbit for our wallets? It should be just as easy and fun to monitor our financial health. Now it will be. Introducing the Financial Heartbeat℠ from MoneyLion.
Conquering stress with the Financial Heartbeat
The Financial Heartbeat is our proprietary visual score that all Americans can use to measure progress towards their financial dreams. We’re leveraging powerful artificial intelligence (AI) tools, machine learning, and data science to help all Americans escape the traditional hassles of managing personal finances and feel more empowered and in sync with their money.
The kind of easy, daily measurement provided by the Financial Heartbeat makes progress and positive momentum more accessible and attainable. For MoneyLion members, this is an essential navigation system to better financial behaviors and a healthier tomorrow.
Financial Heartbeat: Five tenets
The Financial Heartbeat measures and monitors four areas of financial health — Save, Spend, Shield, and Score — and celebrates progress with Strive. Now members will have at their fingertips (in our award-winning app) a real-time score and personalized advice for the five pillars of their financial health:
- Save: The Save icon measures savings health — how well members are prepared for expenses, both unexpected and planned.
- Spend: The Spend icon helps members keep spending in line with their incomes — a critical step for financial strength.
- Shield: The Shield icon helps members understand and organize their insurance needs and coverage. Step by step, they can build their Shield of protection.
- Score: The Score icon encompasses credit score and overall credit health in terms of utilization and interest.
- Strive: The Strive icon keeps members motivated with badges and points for easy and big wins and positive financial steps.
Together, these five scores add up to a total Financial Heartbeat score (1.0 to 10.0, with 10.0 as a perfect score). By providing feedback and reinforcement, the Financial Heartbeat reflects and validates the hard work that Americans put into improving their financial health.
America’s most powerful financial membership
MoneyLion has made a commitment to help all members reach an above-average Financial Heartbeat score of 7.0 by 2020. We’re passionate about strengthening the Financial Heartbeat of America, one member at a time.
Our team has been hard at work building America’s most powerful financial membershipSM, and we’re thrilled to offer Americans a revolutionary new way to get ahead. The Financial Heartbeat complements our Zero-Fee CheckingSM, 0% APR InstacashSM cash advances, Managed Investing, America’s fastest 5.99% APR Credit Builder Loan, Cashback RewardsSM, and more.
With the new MoneyLion Financial Heartbeat and access to the industry’s most valuable checking and investing capabilities, Americans can finally feel like they have a path to a more successful financial future. Now they can make their money work as hard as they do.
The Financial Heartbeat will be available for all MoneyLion app users in March 2019. Learn more by downloading the app or visiting moneylion.com.
*MoneyLion internal calculation of financial stress based on debt-to-income ratio, average credit utilization, and rate of payment delinquencies, on a scale of 1 (least stressed) to 100 (most stressed).
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“America’s Most Powerful Financial Membership℠” is based on our analysis of membership programs and products offered by competing financial institutions. Learn more.