Eight Ways to Measure Financial Health

Submitted by Natasha Pei on November 10, 2016 - 12:36pm

Authors: Sarah Parker, Nancy Castillo, Thea Garon, and Rob Levy

Publisher: Center for Financial Services Innovation (CFSI), 2016


When providers measure the financial health of their customers, they can truly engage with their customers’ struggles and dreams. They can see which customer segments have difficulty saving for retirement and which have trouble building a stable credit score.

When providers measure financial health, they can start to identify which of their products are moving the needle for their customers and which aren’t. They can identify profitable strategies to build consumer financial well-being. They can also understand how an investment in improving consumer financial health will translate into an improvement in financial outcomes.

Consumers can gain a holistic understanding of their financial health and are better able to determine the impact of the financial products they use and the financial behaviors they exhibit. Unlike narrow measurement tools such as credit scores and straightforward net worth, measuring financial health is a 21st century tool.

With these goals in mind, CFSI has developed eight indicators to measure financial health. We believe that these indicators establish a framework for shifting the financial services industry towards a focus on financial health, a focus on improving consumers’ lives.

After more than a year of dedicated research, analysis, and outreach, CFSI has developed eight indicators to measure financial health. For each indicator, we provide benchmarks, financial data proxies, survey question alternatives, and data sources, among other things.

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