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WBK Industry News - Federal Regulatory Developments

CFPB Financial Well-Being in America Report Shows More Than 40 Percent of Adults Struggle to Make Ends Meet

In a first-of-its-kind national survey, the CFPB’s Financial Well-Being in America report is the result of a National Financial Well-Being Survey conducted in 2016.  The survey used a 10 question “scale” developed by the CFPB to measure the financial well-being of consumers.  According to the CFPB, the consumer sample was designed to be representative of U.S. households.   Additionally, respondents to the questions in the financial well-being scale, also answered questions about many other measures including individual, household, and family characteristics; income and employment; savings and safety nets; financial experiences; and money behaviors, skills, and attitudes. The key findings are the following:

  • There is wide variation in how people in the U.S. feel about their financial well-being;
  • Financial well-being scores reflect real differences in underlying financial circumstances;
  • Financial well-being scores provide information beyond traditional financial measures;
  • Savings and financial cushions provide the greatest differentiation between people with different levels of financial well-being;
  • Certain experiences with debt and credit seem to be strongly—and negatively— associated with financial well-being;
  • 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;
  • Many financial and demographic characteristics are associated with financial well-being, but several are not;
  • Multiple factors likely affect the exact level of financial well-being of any particular individual; and
  • Characteristics that have relatively little within-subgroup variation in financial well-being and low overlap of scores between subgroups may be more closely tied to financial well-being.

The CFPB also released an interactive online tool that can be used by individuals to self-evaluate their own financial well-being and find ways to enhance control of their finances.