Financial Well-being of Chinese American Households

Financial counseling and education becomes more important in the recent economic crisis. Financial ratios quantify household financial well-being and can provide a quick and easy way to identify household financial strengths and weaknesses. Using the survey method, this study investigates the balance sheet ratios of 149 Chinese American households in five Midwestern states in the Northwest Central Region. Results showed that the majority of Chinese American households did not save at least 3 months income in their emergency fund and 31.1% of them had more liabilities than assets. However, an overwhelming majority of the households held over half of their net worth in investment assets. Chi-square test results showed that those who expected the economy to perform worse in the future were less likely to meet the 3-month emergency fund ratio guideline and homeowners were more likely than renters to be insolvent. The number of Chinese Americans continues to rise. Not meeting financial ratio guidelines could lead them to various financial problems. Financial education may help these households improve their understanding of the operation of U.S. financial and investment markets and increase their ability to achieve financial goals