In this solo episode of the No Days Off podcast, host Brian Gubernick introduces the "No Days Off Financial Health Framework," a five‑metric system for assessing household financial resilience. Drawing on recent Goldman Sachs research that defines a "healthy household" through debt‑to‑income (DTI), debt‑service ratio (DSR), liquidity, savings rate, and net‑worth growth, Gubernick explains each metric, provides Goldman’s benchmark ranges, and then offers his more ambitious No Days Off targets (e.g., DTI < 20%, DSR < 10%, 12‑month liquidity, savings ≥ 25%, net‑worth growth ≥ 15%). He illustrates how DTI reflects long‑term leverage while DSR captures monthly cash‑flow strain, and he contrasts the two with concrete examples. The episode also reviews current U.S. household averages—DTI ≈ 9%, DSR ≈ 10%—showing that, despite headlines, many households are healthier than perceived, though averages can mask individual weakness. Gubernick concludes with actionable steps: calculate the five ratios, interpret them, and create a plan to reduce debt, improve cash flow, build reserves, increase savings, and grow net worth, emphasizing daily incremental improvement over perfection.
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Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. I think that many of us can look successful and still be pretty financially fragile. I think that's true for, for individuals and for families and even for companies. Goldman Sachs, who I have the opportunity to work with quite a bit in analyzing their data and having conversations with them, they recently released data describing what they call the healthy household from a financial perspective. It's their way of measuring whether consumers, despite inflation and high home prices and expensive debt, whether those consumers are actually on solid footing. Surprisingly, most American households right now are healthier than a lot of, a lot of the headlines suggest. But that's the national average. I want to talk about you. I want to talk about our No Days Off Nation. Today, we're going to talk about what a financially healthy household really looks like. And we're going to use Goldman's data and, and, and a few timeless personal financial principles so you can measure and not guess where you stand. So first, some context on the, on the source. Goldman Sachs, you may know, one of the most prominent banks in the world. They track household finances closer than most anybody else out there. Their research actually influences investors and major lenders and, and the Fed. When Goldman talks about healthy households, they're not talking about people who make a lot of money necessarily. They're talking about people who manage their money well, and they study facts and, and ratios. This is not very emotionally driven. They're going to look at how much debt a household carries. How expensive that debt is, how much income goes towards paying that debt, and how much buffer liquidity or reserves people have if, if things are to go sideways. That's how Goldman's data defines financial health. Let's talk about the state of the average American household. Okay, here's, here's what Goldman found. Debt-to-Income, DTI, across US households is around 9% right now. We're going to dive into what these, what these topics mean here, these, these terms mean. So just stick with me. But let's go through some numbers. DTI across US households, debt-to-income, is around 9% right now, which is actually pretty great, especially when you compare it to the 13% that existed right before the financial crisis in 2008. So 9% today, 13% 17 years ago. Debt service ratios, which again, we'll further define here, DSR, it actually measures monthly debt payments relative to disposable income. It sits near 10%, which is also close to multi-decade lows. Delinquency rates, which, which is about people missing payments, are are still pretty far below pre-crisis levels, and net worth right now is near record highs. And that's really being driven or boosted by home equity, rising home equity, and rising wage growth. So the average American household, at least statistically, is in pretty solid shape right now. But I think these, these averages can hide weakness. And if you really want to know how your household stacks up I think you need a framework, some sort of baseline by which you can, you can assess your financial situation and determine where you, you stand so you have awareness and you can act accordingly. Let's talk about what I, what I'm going to call the No Days Off Financial Health Framework for today's episode. Here's a system that, that, you know, I think you can use, and it's built on 5 data points that can tell you exactly how financially fit your household is. And we're gonna go one by one, starting with, I think, the two misunderstood metrics, which is DTI and DSR— debt to income and debt service ratio. So debt to income, DTI, is really about your leverage load, okay? It's a snapshot of your overall leverage. It tells you how much debt you've taken on relative to your income. So the formula is total debt divided by your gross annual income. Gross, right? That means, that means before taxes are taken out. Okay, so total debt divided by gross annual income. So think about it as weight-to-strength sort of ratio. Okay, if you earn $200,000 a year and you carry $400,000 in total debt, your DTI is 2 to 1 or 200%. Now, lenders typically calculate a monthly version of this number. Your monthly debt payments divided by your gross monthly income. So if your household is making $10,000 a month gross and you're paying out $3,000 in total debt payments, that means you have a debt-to-income DTI of 30%. 3,000 divided by 10,000. So, you're probably running some math in your head right now. Here's the baseline. If your DTI is under 35%, is under 35%, you are relatively healthy by the American standard. If you're part of the No Days Off Nation, what I think is optimal is 25% or even 20% or lower. So under 25%, but really striving to be under 20%. So in that same $10,000 per month, I would shoot to have total debt payments at $2,000 or less. 20%. 25% is what Goldman might tell you is optimal. I'm going to push it to 20%. DTI is a— it is long-term leverage. Okay, it doesn't tell you whether you're stressed today. It tells you how exposed you'd be if, if something changed tomorrow, like a job loss or, or rate hike or something like that. It's a balance sheet measure. It's your total debt load. Okay, now debt service ratio. This is your monthly strain. DSR actually measures, measures something completely different. It's not how much debt you have per se, it's how hard that debt is pressing on your monthly cash flow. So the formula is total monthly debt payments divided by monthly disposable income, which is after-tax. Remember, DTI took into account gross income. DSR, debt service ratio, takes into account after-tax dollars, so your true net disposable income. Think of this as your, your oxygen level. How much of your take-home pay is being consumed just to pay for debt. So let's say your after-tax income is $8,000 and your total monthly debt payments, which your mortgage, your car, your credit cards, your student loans, they total $1,200. $1,200 divided by that $8,000 would mean your DSR is 15%. So even if your DTI looks fine on paper, you're a high DSR, means you're pretty tight on your cash, on your liquidity. In other words, your cash is going out faster than it's being replenished. Goldman Sachs tracks DSR nationally because it predicts stress behavior, late payments, credit tightening, consumer pullback, things of that nature. A DSR above 20%, again, in the example I gave, it was $8,000 after-tax income payments at $1,200, so you're at 15%. But if you had $8,000 per month, if you have a DSR in this example above 20%, which would be at $1,600 in the, in the, in the example I gave you, it means that you're probably one event— a job loss, medical bill, something like that— one event from, from really feeling a squeeze. So what is a healthy per Goldman Sachs number to strive for in terms of DSR? Under 15%. What should we be shooting for at No Days Off? I'm gonna say 10% or less. 10% or less. So in that same $8,000 per month, $800 in debt payments. To put it plainly, DTI is how heavy the backpack is. DSR is how tired you are from carrying it. So they move together, but they're not always in sync. Someone could have a huge DTI, like a $2 million mortgage on a $500K income, but a really manageable DSR if their payments are locked at 3%. Conversely, a person can have a really low DTI but a punishing DSR if they're sitting on high-interest credit card debt. Okay, so DTI is about exposure and DSR is about the pressure. Let's go to the next ratio I want to talk about. That's your liquidity ratio. In other words, your reserves, your emergency runway. It's how many months you could go, you know, and keep the lights on if income stopped tomorrow. The quick formula is take your liquid assets, you know, your cash and those things that are liquid that you could turn to cash right now and divide that by your monthly expenses. Goldman would tell you that a healthy, uh, liquidity ratio is 3 to 6 months. At No Days Off, I think you need to have 12 months available to you. I'm not necessarily saying have 12 months reserve sitting in an account, but you need to have access to it, especially if you're an entrepreneur or a variable income earner where there's less predictability. When we talk about liquidity, we're talking about your flexibility. It's, it's, it's how you're able to manage setbacks or even a disaster. The next ratio is going to be your savings rate. Your savings rate is the percentage of your after-tax income, your net income, that goes into savings or investments every month. We've talked about this one quite a bit. Goldman would tell you healthy is 15% or more at no days off. We really want to strive for 25% or more of our after-tax income going to savings or investment every single month. This is the number that truly determines how soon you can buy your freedom, right? The ability to work because you want to, not because you have to. The last thing I want to look at for, for determining whether our households are, are financially healthy is your net worth growth rate. We talk about tracking your, your net worth regularly here. This just tells you how your overall financial system is, is improving. So tracking your net worth, uh, year over year, which is your assets minus your liabilities— Goldman would say what's healthy is 5 to 10% growth annually. I think at No Days Off we need to strive for 15% plus. No matter the market, I think there's opportunity such that we can hit 15% plus year over year. This is your report card over time. Your income is great, but it's not what makes you wealthy. It's the compounding that makes you wealthy over the course of time. So, a financially healthy household isn't necessarily a high-income household, given what I've just shared with you. A financially healthy household is a, is a resilient household. Goldman's data shows that Americans are healthier today, really because they deleveraged after 2008, and then they refinanced during that 2020-2021 rate trough that we saw. Healthy households, or today's households, are a bit healthier because people locked in lower costs, and then they've had an equity run in their houses. And many have expanded their savings. I still think we have quite a ways to go as a nation, but we are pretty healthy relative to history. Even in a tougher rate environment, households today are not breaking because DTI is manageable and DSR is under control. Now, we all might know someone that's having a different experience. I'm just looking at nationwide data. You can create that same resilience at home. The way you do it is by watching these ratios I just described with the exact same precision that Goldman monitors the economy. So what do you do? What are your action steps as we wrap up? Run your ratios, calculate your DTI, calculate your DSR, look at your liquidity, look at your savings rate, and look at your net worth. Then interpret those results. DTI will tell you if you're overleveraged. DSR will tell you if your cash flow is stressed. Liquidity will, will tell you how long you can endure some sort of disruption. And savings and net worth, they just show your progress towards the independence you likely desire. So after you've run the ratios and you've interpreted those results, Make a plan. Make a plan. Today's about awareness. So maybe lower that DTI by paying off the bad debt. Reduce the DSR by looking at maybe refinancing or consolidating or doing something of that nature. And start working on liquidity and savings and net worth if in fact you find yourself a little bit below where you'd like to be. Again, the goal here isn't necessarily perfection. It's taking steps every single day. To get a little bit better. Awareness around this stuff builds control, and control in my mind builds confidence. That's all we have for you today, the No Days Off Podcast. Thank you so much for listening, and remember, every single day brings a new opportunity to get better. So let's get after it.
