Ratios and benchmarks for measuring the financial well-being of families and individuals

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Abstract

Financial planners and educators comprised a panel of 156 experts in this Delphi study designed to identify and refine ratios and benchmarks for measuring financial wellbeing. Consensus between the two groups existed for benchmarks on 20 of 22 ratios in the areas of liquidity, savings, asset allocation, inflation protection, tax burden, housing expenses, and insolvency/credit. Consensus regarding the usefulness of specific ratios was observed for liquidity and tax burden but not for inflation protection and insolvency/credit. The preferred ratios were generally less complex and more easily measured than many of the ratios used in previous work. From the findings, a profile of financial well-being for the typical family/individual was proposed.

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