About one in five Americans struggle to pay for basic needs including food, shelter, and medical care, while roughly one-third of U.S. consumers have a hard time making ends meet, according to a new report from the Consumer Financial Protection Bureau (CFPB).

The research, which took place last year, asked respondents 10 questions that were answered on a scale of 0 to 100. About one-third of Americans had financial well-being scores of 50 or below, meaning they have a high probability of not being able to make ends meet. A similar number of Americans scored above 61, which means they are unlikely to face financial hardship. The other third, of course, falls in the middle, somewhere between financial security and financial hardship.

A piggy bank sits on a calculator.

Financial well-being is not just about how much money you make. Image source: Getty Images.

What is financial well-being?

"Financial well-being is a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future and is able to make choices that allow them to enjoy life," according to the CFPB.

Differences in financial well-being do depend on income, but that's not the only, or even the most-important factor. Since a high earner can overspend, and not be in control of his or her finances, financial well-being is not driven by income. The key difference between people with positive and negative financial well-being is actually savings and financial cushions.

"The average financial well-being for adults with the lowest level of savings (less than $250) is 41, compared to 68 for adults with the highest level of liquid savings ($75,000 or more)," wrote the CFPB. "When we look at a related measure -- the capacity to absorb unexpected expenses -- we observe similar differences in scores."

How can you improve your financial well-being?

While making more money or cutting spending can help, the CFPB actually found that knowledge helps the most. Consumers with "higher levels of financial know-how, confidence, and certain day-to-day money management behaviors appear to have strong and positive relationships with financial well-being," according to the report.

Basically, people who learn how to invest well, and make saving money part of their regular plan have a better chance of achieving financial well-being. Earning money is obviously a piece of the puzzle, but knowing how to spend, save, and invest makes it more likely a person will be able to make ends meet or deal with a financial crisis.

What should you be doing?

The first step toward improving your financial well-being is taking responsibility for it. That can be as basic as creating a budget so you can control where your money goes each month.

If your income can cover your basic needs, then it's time to examine all the other things you spend money on. In many cases increasing your financial well-being involves making some discretionary cuts. It can be painful to cut the cord with cable or deciding to eat out less often, but if it leads to more savings, the added security is almost-certainly worth it. 

Own your finances and know where every dollar goes. That removes the mystery, and as you save, even if it's a tiny amount each week, you slowly build up the reserve needed to improve your personal long-term outlook and overall financial well-being.