The Financial Resilience View of the Benchmarking app focuses on a household’s ability to withstand and recover from financial shocks. This includes having liquid assets, access to credit, and insurance coverage that can buffer the impact of sudden income loss or unexpected expenses.
The indicators in this view help evaluate not only the resources currently available to households but also their preparedness and capacity to manage adverse financial events. As with the other views in the financial health framework, insights are categorized by their weight and influence: Critical, Supportive, and Contextual.
Critical Indicators
These indicators have the most significant impact on financial resilience and are used to assess how well households can handle economic disruptions without derailing their financial well-being.
- Estimated Liquid AssetReadily available financial resources. Higher liquid assets provide a stronger buffer against unexpected expenses or income loss.
- Estimated Liquid Assets IndexMeasures the relative level of liquid assets available for financial stability.
- Savings Balance EstimateLarger savings balances increase the capacity to handle financial shocks without resorting to debt or disrupting long-term financial plans.
- Total Credit UtilizationLower credit utilization suggests more available credit for emergencies and generally indicates better credit health.
- Life Insurance Cash Value EstimateAn estimate of the cash value accumulated within life insurance policies, providing a measure of accessible financial resources for future needs or emergencies.
Supportive Indicators
These indicators add nuance to the resilience picture by examining insurance coverage and access to credit products that enhance a household’s ability to manage unexpected financial events.
- Propensity to Have Renters InsurancePredicts the likelihood of a household maintaining renters insurance for financial protection.
- Propensity to Have Home InsuranceEstimates the probability of a household carrying homeowners insurance coverage.
- Propensity to Have a Personal Line of CreditIndicates the likelihood of an individual maintaining a personal credit line for flexible borrowing.
- Credit ScoreHigher credit scores typically mean better access to credit on favorable terms, which can be crucial for managing financial shocks.
Contextual Indicators
These indicators provide insight into broader behaviors and access trends that help frame the household’s financial resilience, though they do not directly impact the resilience score.
- Percent of Households with Bank CardShows the percentage of households that currently hold an active bank-issued credit or debit card.
- Percent of Households with Bank Cards in Last 12 MonthsTracks new bank card ownership among households over the past year.
- Percent of Households with HELOCRepresents the proportion of households with a home equity line of credit for borrowing flexibility.
- Percent of Households with HELOC in the Last 12 MonthsHighlights households that have opened or used a HELOC within the past year.
The Financial Resilience View helps identify which households are well-equipped to manage emergencies and which may be more vulnerable to financial disruption. By assessing liquid resources, credit access, and insurance coverage, this view enables a deeper understanding of the financial safety nets available to different populations.
