Characteristics and Determinants of Household Types Based on the Debt Burden Levels

This study examined the characteristics of households categorized by debt burden levels based on the debt-to-asset ratio: no debt, debt burden ≤40%, and debt burden >40%. The 40% guideline is based on the debt-to-asset ratio guidelines used in 2024 by the CFP and AFPK certification holders in financial planning practices. The proportions of each group were 48.8%, 42.3%, and 8.8%, respectively. Households exceeding the 40% guideline were financially vulnerable, characterized by low levels of income, assets, and emergency funds, as well as limited financial literacy. In contrast, households within the ≤40% guideline exhibited strong financial stability, marked by high levels of assets, savings propensity, and financial knowledge. Debt-free households prioritized emergency funds and demonstrated risk-averse behaviors. The analysis of determinants for household types based on debt-to-income ratios indicates that groups such as women, individuals in their 30s, unmarried households, and those without homeownership are more likely to belong to the “no debt” or “over 40% debt” categories rather than the “under 40% debt” category.