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Why Financial Health Matters to Each of Us #FinHealthMatters

posted by Connie Thienes, Product Manager on Tuesday, June 27, 2017

Sure, most of us would agree financial health matters.  We all need to know how to earn, borrow, and spend money wisely.  And as a product manager in the financial services industry, understanding the financial health of specific segments of the population informs product development to varying risk profiles and segment needs.  That was about as deep as I thought about financial health – until recently.

On the recommendation of a senior manager in my company, I attended the Emerge Financial Health forum sponsored by the Center for Financial Services Innovation (CFSI).  Before the general conference sessions began, I participated in FinX, a field exercise providing attendees with the opportunity to experience firsthand the world of alternative financial services that exists mostly outside the traditional banking system – payday and title lenders, non-bank check cashing and money transfer services, pawn shops and refund anticipation loans. 

The FinX experience was both humbling and enlightening. I saw very clearly the many opportunities available to credit unions and banks for improving upon the expensive and often frustrating options used by many Americans who are struggling with their finances.

But participating in FinX did something more for me.  It opened my mind and heart to a degree that prepared me to comprehend the staggering impact of key statistics regarding financial health in America in a more profound way:

  • 57% of American adults – approximately 138 million – are struggling financially.
  • Holding income and other demographic and behavioral variables constant, consumers who plan ahead for large irregular expenses are 10 times as likely to be in a financially healthy segment compared with those who do not.  In other words, income may help, but so does the adoption of healthy financial habits.
  • For many of us, a stable monthly income will be less attainable in the future.  A study by Intuit predicts that by 2020, 40% of us will be independent contractors. 

As if those statistics weren’t enough, excerpts from the recently published book “The Financial Diaries,” written and presented by author Rachel Schneider, drove the message home. The book is based on the groundbreaking U. S. Financial Diaries research study that followed the lives of 235 low- and middle-income families as they navigated through an entire year.  It focuses on the personal stories of the families who participated in the study and provides deep insight into their day-to-day financial decisions. It also presents ideas for helping struggling families improve their financial stability. 

Thanks to the well-written stories of the families who generously gave their time to participate in “The Financial Diaries” study, I think differently about the financial lives of people in my own communities – both the suburban community where I live and work, as well as the rural community I grew up in and visit frequently.  The CFSI financial health forum was aptly subtitled “Moved to Act.”  In my case, at least, that goal was achieved. 

June 27th is #FinHealthMatters day.  I know now financial health matters to me. The need to become healthier with our money is not limited to “certain segments” of the population; the financial health of the people we interact with in our communities impacts all of us. 

I have a unique opportunity to incorporate promoting financial health as part of my day-to-day responsibilities for product development and enhancement.  I’ve laid out some specific steps [O1] I plan to follow based on CFSI’s “The Seven Stages of Your Company’s Financial Health Journey.” More to come on these steps in a future blog.

 If you are a financial services professional, I challenge you to join the #FinHealthMatters day conversation.   Why does financial health matter to you?

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