People who say their finances have gotten better since the recession also report lower levels of complexity in their financial situations, according to a new study by Chase.
Paying off credit card balances in full, having a good grasp on financial literacy, and taking advantage of financial tools and counseling were also tied to improved financial status.
The Chase Blueprint study showed that people who are still struggling post-recession have several things in common: they have multiple sources of debt, report increasingly complex financial situations, and are more likely to consider themselves financially illiterate than people who say they’ve recovered from the recession.
Simpler is healthier
The report, called “How Have Americans’ Financial Lives Rebounded From the Recession?” includes a survey of 1,242 people who were asked questions about how they are doing financially since the economic crash of 2008.
About a quarter of those surveyed said their financial health has improved since the recession. Of those, 43% say that their finances have also gotten less complicated. However, among people who said their financial health has taken a nosedive since the recession, 31% call their finances very complex.
Common traits of the financially fit
Paying off credit cards each month, refraining from borrowing money from friends and family, and staying away from things like payday loans and direct deposit advances were all linked to financial stability.
Of the quarter of respondents who said they finances were on the upswing, 60% say they almost always pay their credit card balance in full. Those who said their finances have gotten simpler since the recession also took out fewer loans, avoiding fees and other financial penalties associated with carrying a great deal of debt.
Being financially savvy makes a difference
Also common to the group who said they were financially healthy was a feeling that they understand what’s happening with their finances. More than half (55%) of the group with improved financial health considered themselves financially literate. One-third of those who reported decreased financial stability defined themselves as financially illiterate.
Overall, people have gotten financially savvier. Forty-five percent of respondents across the board felt they were financially literate, compared with 31% in 2010.