More people feel that they have higher income than expenses each month and a savings buffer of at least two months' salary after tax.
The changes are admittedly small compared to last year's report, but still provide an indication that a certain recovery is underway for Swedish households, says Madelén Falkenhäll, economist for financial health at Swedbank.
We are seeing that more and more people are adding to their savings, even groups that are having somewhat tougher financial times.
Women's financial health has improved somewhat, but men feel more in control of their finances. The biggest difference lies in savings.
Even when we look at women and men with the same salary, we see that women save less.
A social issue
The differences between age groups remain large. 88 percent of those aged 67 or older feel that they have good or strong financial health. Among young adults aged 18-29, the figure is 67 percent, slightly worse than the previous year.
It's about how we manage our money and make good decisions. It's also not surprising when you haven't had time to grow into it.
Young adults are more easily influenced by their surroundings and social media, other studies conducted by the bank show. This in turn can lead to increased consumption at the expense of savings.
Falkenhäll would like to see personal finance given an even greater place in school.
It can't depend on having parents who can explain and help. It becomes a societal issue.
New lesson
However, the economic turbulence of recent years may have brought important lessons, not least for the younger generation who may not previously have experienced an economic crisis.
Once you've learned that lesson, I think you take it with you.
Is there anything negative about people having better financial health?
From a macro perspective, there has been a lot of talk about private consumption. It is a trade-off where the economy as a whole may need private consumption to get going while many households primarily prioritize savings, says Madelén Falkenhäll.
Swedbank's measure of financial health is partly based on the UN's definition of financial health.
Swedbank's measure is based on the following criteria:
- A personal budget in which income is higher than expenses each month.
- Insurance that protects personal finances, such as unemployment insurance and home insurance.
- A savings buffer of at least two months' salary after tax.
- Saving for events later in life, such as retirement.
- A manageable debt level with margins to withstand interest rate increases and a weaker economy.
- Knowledge to make good decisions about personal finances.
Source: Swedbank
