The short and sweet of it:
The Elevault Financial Health Score is a tool to help users better understand their financial life as it relates to spending and saving best practices. We want to help users change their relationship with their finances and want to empower our users to have control over their money. The Financial Health Score uses five factors to measure Financial Health as outlined below:
1. Pay a Bill Using a VaultKey - Paying your bills on time and in full is a key part of financial health. Racking up late fees and interest is an unnecessary waste of money that could be saved for things you actually want like a new car or a vacation. In order to improve this factor of your Financial Health Score, you should set up a VaultKey to auto-draft one of your monthly recurring expenses. You can even set up an Expense Vault to track this expense and connect the VaultKey directly to it!
2. Spend Less Money Than You Earn - Putting away some of your monthly income is the best way to increase your savings and, in order to have some left over, you must try to spend less each month than you earn. If you spend less than you make each month, you will be able to build some sort of emergency cushion so that you can respond when you have an unexpected expense like a car repair or medical bill. This factor is calculated by dividing the balance of all the money that comes in to your portfolio by the balance of all the money that comes you. If your earnings are greater, you will receive a perfect score!
3. Have Adequate Emergency Savings - There is an often cited statistic in financial health media that states that a majority of Americans do not have $400 in savings to use in case of an emergency. This makes it hard to weather storms like car repair and medical bills without taking on interest-bearing debt. Financial health researchers suggest that people should have 3-6 months of their monthly expenses in savings to use in case of unexpected emergencies. At Elevault, we know that 3-6 months of expenses is a lot to ask and hard to achieve. We will give you a perfect score on this factor is you have 1 month of expenses saved!
4. Stay On Top of Your Finances - People are often blind-sided by financial emergencies and have to take out debt because they are not paying attention to their financial life. We think it is important that users take control of their finances and understand where their money is going and when. That's why we give users credit for logging in to their app and monitoring their spending and saving. Log in to the app 10 times a month to get a perfect score!
5. Automate Your Savings - While we think it's important to stay on top of your spending and saving and be aware of what's happening in your portfolio, we also know that it's easier to save to when your bank does it for you. Setting scheduled saves allows you to move money to and make progress on your financial goals on a regular basis, not just when you're thinking about it. Set up five scheduled saves to get a perfect score on this factor.