Transcript
CFPB FinEx Webinar:  Financial Well-Being by State in 2021
November 16, 2023
Presenter:  Hector Ortiz, CFPB
Facilitator:  Ken McDonnell, Financial Education Program Analyst, CFPB
  
 >>Robin Dixon-Jefferson:   Good afternoon, everyone, and thank you for joining. Before we get started this afternoon, I am Robin Dixon-Jefferson from the Events Management. I'll go over some logistics before we begin.

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For the record, this event is being recorded. At any time during the session, if you'd like to put your questions and/or comments into the chat box, make sure that the drop-down is to everyone so that everyone can see your questions and/or comments. Your questions will be answered at the back end of the presentation.
 
And with that, I will now turn this over to Ken McDonnell, who will officially start this afternoon's presentation. Ken, you now have it.
 
>>Ken McDonnell: Thank you, Robin, and thank you all for attending. We'll be going over our recent research findings that we've found of financial well-being by state. The data comes from 2021.
 
Next slide, please. For those of you who may not be familiar with us, we are the Consumer Financial Protection Bureau. We are the newest agency of the federal government, created in 2010. We are dedicated to making sure you are treated fairly by banks, lenders, and other financial institutions. We are here on your side throughout life's financial moments.
 
Next slide, please. Also, an opportunity for those of you who are not familiar and would be interested in joining our FinEx network, we'd encourage you to come and join us. You will receive updates on research, tools, and webinars via email. We'll also help you stay up-to-date on multiple webinars throughout the year, and it will also give you a chance to get to know some of your CFPB presenters who can work with you and your organization. So please feel free to sign up for the FinEx network if you haven't already done so.
 
And with that, I would like to turn this over to my colleague, Hector Ortiz, who will go over the findings. Hector.
 
>>Hector Ortiz:  Well, thank you, Ken, and thank you again to the FinEx network for this opportunity to share our work. I want to welcome again everyone, and thank you for your interest in learning more about how financial well-being varies by state.
 
The project that I will be discussing today was a joint project between the CFPB's Office of Financial Education and the Office of Older Americans in the support—of research analysis and support of Carly Urban, who's associate professor of Economics at Montana State University. She couldn't join us today, but she expressed her appreciation also for your interest.
 
Next slide. As Ken said, we will today briefly review the CFPB financial well-being scale and score. We will be reviewing a background on the existing research on financial well-being by state, and we will be discussing also the findings of how financial well-being varies by state, age, sex, race, and the changes from 2021. We will also talk about the relationship between financial well-being and poverty, housing and financial literacy and inclusion, and discuss some implications of this work.
 
Before we go into the results, I want to disclose that this presentation is made on behalf of the CFPB, but any opinions that I state today are my own and may not necessarily represent the views of the Bureau. I take full responsibility for typos and other mistakes.
 
I also want to say that our work here today was conducted using data from the FINRA Foundation, which is a non-governmental entity that is not affiliated with the CFPB, and while we relied on the FINRA data and we served in an advisory capacity in the design of the survey and the decisions about the survey, we were, again, two separate entities.
 
Next slide. And so I want to start with some background on the financial well-being scale and score.
 
Next slide. So I want to start with the definition of financial well-being. Some of you may be familiar with this work. We have presented several times to this network on our work on financial well-being. What we did was to learn about financial well-being. We conducted open-ended interviews, one-on-one, in-depth interviews with a broad, diverse group of adults around the United States, and from those interviews, we developed a definition. And that definition, which is shown in this slide, states that financial well-being is the state of being that reflects a person's ability to meet current and ongoing financial obligations, feel secure in their financial future, and make the choices that allow them to enjoy life. This definition was built people's own words, and it was seen here. It has both elements of the future and the present and elements both of financial freedom as well as financial security, and these were elements that came up in our interviews of people of all ages in all regions and social demographics.
 
Next slide. To measure this definition, which, as you can see, has clearly a holistic nature and a subjective dimension, the CFPB used the appropriate measure or appropriate measurement instrument for this, which is a scale. And for that, we developed, again, a scale that contains 10 items. That financial well-being scale has a shorter version, an abbreviated version, that is typically the one that is used in a wide range of surveys, and the scores that we'll be presenting today are based on the five-item scale that contains those questions that are presented here that include: "I'm secure in my financial future because of my money situation. I feel like I will never have the things that I want in life. I am just getting by financially, and I am concerned that the money that I have, will save, won't last, and then my finances control my life."
 
Next slide. And so the individual's responses to those five questions or the ten questions of the full scale are converted into a score, and that score is a standardized number that goes between zero and 100, and that sort of quantifies a person's underlying level of financial well-being. The score is further adjusted by age to account for differences, again, in response pattern between older and younger adults. And the scale was also adjusted by the method in which it was taken, so whether the person read the questions or someone else read the questions to the person, which usually it's proxy for whether it was completed online or completed on a phone survey. And the survey that we are presenting today and the results are based on an online survey.
 
The CFPB's financial well-being scale and score was validated and tested, and it is available for public use. So you don't have to—so for permission, we have a number of resources that we'll be discussing at the end that you can leverage. 
 
In a person's financial score, well-being score provides that single number that is between zero and 100, again, that captures holistically the level of financial well-being. It is also grouped in six categorical ranges that go from very low to very high.
 
Next slide. In those ranges—and I want to say one thing, that we will be sharing the slides after the webinar, because I do not expect that everyone will have the ability to take a look at these numbers carefully, similarly with the state-level results. But what you can see here is that those levels of financial well-being that go from very low to very high scores help identify in a categorical way the experiences of financial well-being. And as you can see, those who have low and very low score levels are those who experience the most severe financial and material hardships. Those include housing, food, and security. And on the other hand, people who report high and very high levels of financial well-being are those who have generally consistent levels of financial security, are not concerned, again, about a wide range of shocks, or do not experience those. And here you can see again systematically that whether it is the reporting of difficulty covering bills, anxiety about finances, having bad or very bad credit, not having emergency savings, being unbanked, having unpaid medical bills, all of those experiences systematically decline at each level of higher financial well-being.
 
Next slide. So what do we know about the role of geography and financial well-being? As I said, when we studied the meaning of financial well-being, we found out that the meaning was the same across the nation in different types of communities, rural, urban, and South, North, Northeast, West. However, when individuals described what mattered to their financial well-being, we uncovered a number of individual-level and household-level factors known to all of you:  education, income, occupation, debt. But then they also mentioned ones that related to the context, the environment in which they navigate their financial lives and decisions, and that included things about neighborhoods, their state of residence. And we know that these geographic differences, that there are, in fact, geographic differences in terms of employment opportunities, safety net programs, cost of living, availability of financial products and services. And those are the kinds of things that inform people's financial well-being. 
 
In 2018, we did our first report on this topic, and in that report, we described variations of financial well-being by state. And in that first report, what we revealed was that the average financial well-being score for adults in the United States was very similar across states, and that only a handful of states had scores that were significantly different from other states. So today we're going to see how that looked about five years later.
 
Next. And so now I will discuss the data source that was used in this study and the study methodology. 
 
So today's webinar is based on an analysis of the 2021 data and the 2018 National Financial Capability Study State-by-State Survey. Since 2009, FINRA has been sponsoring a new round of this survey, and that includes state-level samples. And the survey helps examine financial capability across demographics, behavioral, attitudinal, and financial literacy characteristics.
 
The 2021 NFCS specifically was administered to an online sample of 27,000 American adults. That's roughly 500 per state. There was also a sub-sample for Puerto Rico, and also the survey does, in our analysis, uses the corresponding both national and state weights to generate the scores. All of this information, as we put in the link, is available online with the methodology and the public's available data.
 
Next slide. And I just want to say that while the survey was constructed, again, to provide a very diverse representative sample of adults, there's a good chance that it undercounts some groups, including people whose primary language was not English or Spanish, which were the two languages that were used to fill the survey. And as we all know, people with significant physical limitations that prevent them from answering an online survey, and those who reside in institutional settings, this is a general challenge of a lot of surveys, the inclusion of institutionalized individuals. And lastly, I want to make clear that what we present are associations and not causality between the different factors that we examined.
 
Okay. So let's get to the results. Next slide. And we are going to start with the variations in disparities by state. 
 
First slide, please. So we're going to look here at how financial well-being varies by state for all adults. And in by-states here, we are only counting or aggregating the United States and the District of Columbia. We're going to have a separate set of slides for Puerto Rico.
 
The average financial well-being for all adults in the United States was 52 in 2021, but as you can see here, that average ranges from 50 to 55. And that five-point difference is significant, statistically speaking, and 19 states have an average score that was statistically different from the average of all other states. And what we have found in this analysis in 2021 is that there were more differences between states in 2021 than in 2018. In 2019, only five states had a score that was significantly different than others.
 
Next slide. As you briefly recall, scores are grouped also in categorical ways that go from very low to very high levels of financial well-being, and again, this allows us to estimate the percentage of the state population that has scores within those ranges. So now we're going to look at those who have scores below 37. So those are individuals who have low or very low scores. 
 
Next slide. So this slide sort of shows you the percentage of the population in each state that has low or very low score. In the United States, that is 18.1 percent. But it varies from 13.5 percent in Delaware to 25.4 in West Virginia. Again, we will be sharing the slides with you so that you can see the more detailed findings for the states.
 
Next slide. So another way that you can look at the financial well-being data is from the perspective of disparities, and so we are going to look—in this graph, we're looking at the difference in the score between those in the 90th percentile and those in the 10th percentile. So how big is that gap between the highest and lowest scores? And this spread, again, can be an indication of disparities in the experience of financial well-being in a given state, and as this graph shows, the spread of the scores, you can see that spread is 44 points in the United States on average. But that spread ranges from 38 in D.C. and Utah and Alaska. So those are the states that you could argue are more equitable in terms of the experience of financial well-being. And then the largest difference is Missouri with a 50-point difference.
 
Next slide. So having a survey that is conducted with certain frequency allows us to look at how these findings have changed over time. This is not a panel, so these are not the same respondents over time. This is a cross-sectional analysis. And so, you know, the U.S. population has changed over time so that we have to be mindful of that distinction. But we are going to talk about, again, how these averages change over time as well as how scores have changed, those disparities have changed between 2018 and 2021.
 
Next slide. So this is broadly the change in scores in the United States by state for the entire United States. But I want to start with making a couple of observations. One is that we know from multiple studies that there was an increase in financial well-being between 2017 and 2020, and we documented that in a separate project that we conducted at the CFPB. And we have seen other measures that improved during the pandemic and largely, to the surprise of many, given that many expected that the pandemic was going to bring a lot of uncertainty and changes to people's financial situations. But on average and in large part, given the response that was provided in supports by the government, lots of people experienced an improvement.
 
The NFCS was conducted at the end of 2021. So that was nearly a year and a half after the start of the pandemic, and at that point, what we have found is that comparing to the score of 2018, there was no change. So we were pretty much, the average was the same as before the pandemic. And this sort of also aligns broadly with other research that we have seen, that both—that again, that the pandemic did not significantly impact on average the situation of Americans, but also seems to align with other research that did show the financial well-being did not continue to rise at the end of 2021. And that was sort of maybe reflective of concerns about the finances of people in the future. As you know, at that time in 2021, the government supports for unemployment, families with children and businesses began to diminish, and so the concerns about inflation, that's when they started to uptick. And the analysis here further elaborates again that those changes in financial well-being, even though at the national level were zero points, they varied a lot by state. And here's what I think is the key highlight here is that in 31 states between 2018 and '21, financial well-being increased in 31 states, and in 20 states, financial well-being decreased. And those changes vary in significance. And so whether it's positive or negative—and again, Delaware and New Mexico were the two states that reported the largest changes in the average financial well-being. Delaware was the positive, and New Mexico had the largest decrease in financial well-being.
 
Next slide. And so the next, this slide looks at the issue of disparity, and what we're trying to capture here is, again, that difference between the 90th and 10th percentile, which shows you the gap between the highest score and one of the lowest scores in the state. And that, again, serves as a measure of disparity in the experience of financial well-being, and what we observed was that there were changes in the difference in gap between the 90th and the 10th percentiles. And what we found was that in eight states, the gap remained unchanged. But in 16 states, the gap decreased, with three states, Alaska, Kansas, and Nebraska. Those states reported significant decreases of three points or more. And then we have—on the other direction, we had a significant number of states where that gap increased. And from the decrease in—sorry—27 states where the gap decreased, and those 27 states where the gap increased, with two states, in particular, Indiana and Michigan, having a significant increase in that gap.
 
Next slide. In 2018, we looked at the differences by state, and we also looked at the differences by age. But for this project, we took two additional areas of interest. One was we looked at how financial well-being varied by state but also across gender and also across race and ethnicity. And I want to start first with variations by sex. 
 
First slide. So here's the financial well-being for males across states, and as you can see, the average for the U.S. was 53, but it ranged from 51 to 58. And the state with the highest score for males is Delaware, while the state with the lowest score was Ohio with 51.
 
Next slide. Among females, we find, again, a U.S. average of 51, but a variation across state where Illinois had the highest score at 53, and the lowest score for females was in Oklahoma with 47.
 
Next. Generally, in almost across all states, males had a higher financial well-being score than females. On average, that difference was 2.8 points, which is statistically significant, even though it's, again, 2.8 points. And that difference, again, is across almost all states, with the exception of Ohio, where the difference is not statistically different. It's statistically identical in that sense. In Illinois, where the data suggests and shows that, females had a higher financial well-being than males.
 
Next slide. And we also looked at changes between 18 and 21 nationally for both groups, and we wanted to see which ones—in what states there was a significant increase and a significant decrease for males and females. And as you can see here, that there was an increase in the financial well-being scores. You can see here, again, an increase in the scores in four states for both males and females and a significant decrease for males and females in three states, and those are presented here.
 
I want to also note that, again, that even though we have a significant number of state variation only between 2018 and 2021, it was only a few, a handful of states that actually had a significant difference.
  
Next slide. So now we're going to look at age group, and we're going to look at difference in financial well-being by age groups across and within states.

And for age, we're dividing them by 18 to 61, and 62 and older. 62 and older was a sort of a distinction that was made at the CFPB, both because statutorily that's how we defined older adults, but also at that point, this is the first typical age for Social Security benefits and for reverse mortgages. So there were other components.

When we look at financial well-being through this age spectrum, we see it more as a continuum. But for this purpose, we're dividing it, the older segment, that's those who are 62 and older. Next slide.

So in terms of the average score for adults, younger adults, so those who are 18 to 61 by state, you can see that it ranges from 46 to 52, even though the average for the United States is 49. And in 2021, the state with the highest score for younger and middle-aged adults was Delaware, and the state with the lowest score for younger and middle-aged adults was West Virginia. And this matches, again, the first slide about variations by state.

Next. But when you look at older, we do have different states now. Among older adults, the average scores range by state from 59 to 67, with New York having the highest score for older adults, while Ohio had the lowest score.

The average score for the United States was 62, and again, we'll share with you the slides and you can see the actual score for the states in the squares of the map.
 
Next. Across almost every state, not across almost, in all states, the average financial well-being of older adults is higher than for younger and middle-aged adults.

And this, to us, makes sense in the research of how people define financial well-being and how it connects to the life cycle of individuals. Again, that doesn't mean that there aren't younger adults, that there's variations within those groups or there's a certain level of overlap in the low levels of scores. But on average, again, we consistently find higher levels of financial well-being among older adults.

And this is, again, a testament to also the safety net of Social Security, Medicare. And so what we're seeing here, again, is a large difference. And the United States is almost a 14-point difference between the two groups.

But you can see from here that the state with the highest difference, again, was New York, where older adults had an 18-point difference compared to their younger peers, compared to the state of Wisconsin, where that difference was about 10 points. So Wisconsin had the slightly more equitable, in terms of age, financial well-being. 
 
Next slide. So in this slide, we're looking at the change from 2018 to 2021 in terms of looking at the states that had a significant increase in the financial well-being of older adults and the states that had a significant decrease in the financial well-being of older adults and also the younger segment. And as you can see here, older adults experienced an improvement in their actual financial well-being in approximately 10 states. And those are, again, it could be lower or higher difference.

You can see here, again, seven states where older adults had a significant increase and four states where younger adults had a significant increase. And the abbreviations for the states are provided in the slides. We'll talk about the implications of this in the later part of today's webinar.

Next slide. Now we're going to look at the race and ethnicity differences. Financial well-being across, and for sampling issues, we sort of, here we divided the group in what we call dummies, sort of two categories, white, non-Hispanic adults, and what will be the other racial and ethnic groups that are within the state.

Next slide. So let's start with the white, non-Hispanic population, and we do find, again, white variations among the white, non-Hispanic population that ranges from 49 in West Virginia to 50—I apologize—to 50—it should be 54 in Hawaii—to 60 in Hawaii. So the state with the highest score should be Hawaii, so it should be 60, not 52 as presented here. And that is a pretty significant difference. The average is 53 across the United States, but again, you have a wide 11-point difference between those two states. 
 
Next slide. And in this one, we looked at adults of other race and ethnicity. And here, again, we find that 10-point difference, and we have Delaware with the highest score and North Dakota with the lowest score of 44. Again, big difference between states and within the non-white population.
 
Next slide. So here's one of the findings that probably got our attention, and interestingly, a lot of these are not significant just because of what suggests that there is a lot of diversity in the financial well-being by groups, racial groups. But what we found was that, in general, in most states, white non-Hispanic adults have higher financial well-being score than non-white groups. And that, on average, across the United States is 1.7 points, but you can see how it varies by state, with North Dakota having a 10-point difference and West Virginia being the opposite. We're finding that in West Virginia, in fact, the non-white population have a slightly higher financial well-being than white non-Hispanic adults. Again, most of these differences are very small, so they're not statistically significant, and this indicates a lot of variations within each group at the state level, but again, these two extreme differences that we're seeing here are noteworthy.
 
Then next slide. In terms of states that reported a change between '18 and '21, what we found was that nationally white non-Hispanic adults experienced a slight decrease in their financial well-being, and you can see here that when you look at the number of states where—there were more states with a significant increase for those in the other race and ethnicity category, and more states where there was a decrease for the white non-Hispanic between '18 and 2021.
 
Next slide. And so now I just want to talk briefly about some of the findings that we have about the relationship with financial well-being scores in '21 with a couple of state-level measures of economic and social conditions.
 
First slide. So in previous research, we looked at the relationship with income, and we can see here that that relationship has always—which holds at the individual level, holds also at the state level in terms of the relationship between the financial well-being score of the state with the state's median household income. However, there is a couple of interesting gaps between some of those measures in some of the states. For instance, Delaware has one of the highest average financial well-being, yet it ranks 26th in median household income, while Utah ranks 44th in average financial well-being but is sixth in median household income. Again, the correlation between the two is strong but not perfect.
 
Next slide. We have a similarly strong relationship between poverty and the measure of the percentage of people who have low and very low financial well-being. So you can see that, in general, the percentage that report low or very low financial well-being exceeds the percent of the population that is under the poverty line. That kind of makes sense, but there's one exception to that rule, and that is the District of Columbia, where there's more people who are reporting incomes below the poverty line than low and very low financial well-being. And that could also say something about the systems of support that are available at the local level.
 
There is, however, again, a lot of significant variations in the gap between both measures, and I want to say that the smallest difference between the two measures is in Mississippi and New Mexico. So in those two states, the percentage of low and very low financial well-being is very similar to the percentage reporting incomes below the poverty line. But in other states, you do have, like in Utah and West Virginia, the very low and low financial well-being significantly exceeds the poverty rate by 10 points, and this misalignment, again, just speaks about the fact that these are just two different measures, correlated, but they're just two different measures.
 
Next slide. So here, we're looking at the financial well-being scores and the measures of financial literacy and inclusion, and you can see that here we find the strongest relationship with financial inclusion. So that means—so we're looking here at financial literacy and financial well-being. We're looking at also financial knowledge and use of alternative services, and again, we find a stronger relationship with the measures of financial inclusion, which is being unbanked or the use of alternative services. Particularly, the use of alternative services has the strongest correlation with the state-level financial well-being.
 
Next slide. We're also looking at a few other state-level conditions, and these include employment, health care access, and housing situations. These are things that people told us during the research that matter to their financial well-being, and that includes like housing burden, health care insurance and costs, loss of a job. And interestingly, some of these things do matter at the individual level, don't seem to matter at the state level. So in this here, what we find is that it is very strongly related to the—so there's a strong relationship between financial well-being scores and percentage with low financial well-being scores and the state level of health insurance coverage, so those two strongly correlated.
 
However, we are not finding a strong relationship with housing burden, and I know this may be puzzling for some of us, and you given the situation. Again, this is not—this was 2021, but this could also speak to, again, the compensatory factors that may be available at the local level in places with high housing costs and burden.
 
The second piece is that we find the relationship with unemployment rate either—and that could be also because of how complicated the housing measure, the unemployment measure is, which is very sensitive to the exact time. And I think that could be as a result of monthly variations and just generally that there are very limited differences in unemployment by state.
 
Next, I am going to quickly go through the findings for Puerto Rico. This was the first time that the survey was administered to a sample of people in Puerto Rico. And this was an important addition to the NFCS because it sort of teaches something about the territories. It's an important component to enhance our understanding, again, of the financial well-being of an important segment of the American population. 
 
And what we found—next slide—was that in 2021, the average financial well-being in Puerto Rico was 50, which is statistically lower than the average financial well-being for the states and D.C. combined, and that financial well-being score in Puerto Rico was, again, a reflection of something that is known to many of us, that in general, the income and the household incomes in Puerto Rico are significantly lower. In Puerto Rico, the median was $22,000 compared to $71,000 in the U.S., and it has one of the highest poverty rates compared to the U.S. Forty-one percent of the population in Puerto Rico live below the poverty line, yet what's interesting—and this, again, speaks to the difference between the two measures—was that compounded with the natural disasters, some of the economic downturn, what we found was that in terms of the percentage of people telling us that they had—in Puerto Rico, that they had low or very low financial well-being, that was 18.2 percent, which was similar to the share of adults in the U.S. that reported having low or very low financial well-being. And in fact, in Puerto Rico, that share of adults experiencing low and very low financial well-being was much lower than in 21 states, and this finding may be a little bit of an indication of the differences in cost of living but also safety nets and things that often we cannot capture in surveys, like in the effects of federal government support particularly that happened after Hurricane Maria.
 
Next. Then another thing that got our attention was how much more equitable the financial well-being experience was in Puerto Rico. You remember that in the U.S., the difference between the 90th and 10th percentile was 44 points. In Puerto Rico, it was only 37 points. And this finding, again, is puzzling, given that actual income inequality in Puerto Rico is pretty bad and ranks worse than the states, but there could be very important differences in, again, expenses and financial expectations compared to Puerto Rico and the states. And also, we find zero difference by sex in Puerto Rico. So this is another interesting finding in this research. 
 
So next slide. I want to talk quickly about some of the implications of this work, and I'm going to go through this very quickly and then share a couple of brief resources with you. I think that the main thing I want to say is that the analysis here suggests that financial well-being is experienced differently across states and in meaningful ways. 
 
Next slide, please. And with only five points separating the state with the highest average financial well-being with the state with the lowest, but in 14 states, one-fifth or more of the adult population in that state have very low or low financial well-being, and I thought that was a pretty meaningful finding.
 
Next slide. Also, that there are larger differences in financial well-being between states in '21 than in 2018, and that furthermore, 20 states show a decline in their financial well-being between '18 and '21. And this is an indicator that the pandemic may have created disparities in people's experience of financial well-being in some states, but also that the state's circumstances and responses may have also mattered in shaping people's financial experiences between 2018 and '21.
 
Next. And we also find that the percent of the population with low and very low financial well-being exceeds—generally exceeds the percent of the population with incomes under 100 percent, and this weak association again highlights the limitations of just relying on poverty as the sole measure of economic well-being of communities. So I know lots of other people are doing great work creating holistic measures of the economic well-being of their communities. Census is thinking about that. I know other nonprofits are doing and think tanks are doing that, and I think that's an improvement in our conversation about financial health and well-being of communities.
 
Next one. Then regarding disparities in well-being, I think we saw significant disparities in the financial well-being across states and within states, and that this gap increased in many places between 2018 and '21. And that gap is also reflected by age, sex, and race. And I think the big thing here is—I was surprised by some of those exceptions, and I think that work like this is important because it helps us look at those exceptions to the rule and enhance our understanding of the rules and how states can play a role in addressing disparities and inequities. And one of those exceptions was again Puerto Rico, and it was great that it was included in that sample. 
 
Next slide. And then the economic conditions of the states and notably that the median income, the health insurance coverage, and the levels of financial inclusions, particularly as defined by the use of alternative financial services, they're all positively correlated with their states, the residents' financial well-being, yet we found again no association between the housing burden and unemployment. And again, we have a mix of findings here, but I do think that they both fundamentally speak to the fact that policies at the state level can advance financial well-being because they can either act as mitigators of some of these factors or as enhancers of well-being.
 
All right. Next slide. So I'm going to go through a few of our resources for all of you who are interested in measuring financial well-being and getting more of this information. I'll go through some of those very quickly.
 
First—next slide—is where to get the FINRA capability data. In their website, all this information is available. You will find there the survey data set, the code book, and other information that is available to the public for use.
 
Next slide. In our website, you will also find a financial well-being hub where we have all the information about the scale, user guides, and other relevant materials that are related to our work on financial well-being.
 
Next slide. We also have an online version where you can answer the financial well-being questionnaire, and you can get the score. You can use this with your clients in some of the materials that are available there.
 
Next. If you are with a financial educator, coach, or a nonprofit interested in using the scale, we have a toolkit for users, has case studies, benchmarks, and other complementary resources.
 
Next. Finally, this concludes the presentation. I just want to say that if you have questions about the scale, the score, or surveys that have it, how to use it, contact us at FinancialEducation.cfpb.gov. We offer technical assistance, and we work with a number of you on, again, the adoption but also understanding the utility and uses of the scale. I just want to thank you all again for your time, and I have a few minutes for presentation.
 
>>Mr. McDonnell:  Hey, Hector. So we do have a question here from Jonathan Ferguson [phonetic]. This is referring back to the demographics that you gave in your presentation. He was asking if we have done any investigation of financial well-being related between urban and rural populations.
 
>>Mr. Ortiz:  Yeah. Great question. We do have a version of that survey that does allow us to impute rural status, and generally what we find is that, yes, it all depends on how you define rural. And so there is a measure of rural status that is very granular that goes from the very, very rural areas all the way to the more urban, and so that has, I think, nine codes. The USDA developed that. So, in that one, if you define rural as those who are extremely rural, like the eight and nine, that's when we do see differences.
  
Interestingly, there's a lot of experience of low financial well-being in a group of areas that are not fully rural and not fully urban, and, you know, understanding those will be an interesting project itself in that I suspect that some of those are communities that relied on an industry at some point. And those industries have disappeared or are going through transitions. So it's those middle codes. There's a few of those that have, like, significantly higher percentages of people with low financial well-being. So that is a great question.
 
>>Mr. McDonnell:  We have another question here from Jeff Huntsman [phonetic]. He is asking, are you aware of best practice programs or services that have made a measurable difference in financial well-being in targeted populations?
 
>>Mr. Ortiz:  So I just want to sort of talk about work that we did way back in—I think it was '17 that we released the Pathways to Financial Well-Being, and so the Pathways, what helped us was to understand what shapes financial well-being. So what we know, that financial well-being is the personal assessment of your situation, the subjective assessment. And what we observe and what we sort of documented in that research is that it is the objective factors that inform that subjective assessment, and that what we identified as areas of important change objectively included the presence of emergency savings and liquid savings and the presence of the improvement of creditworthiness, so the avoidance of rejection, improving credit availability, but also the importance of helping consumers sort of manage their debt.
 
And so those are the bread and butter of coaching, and those are the outcomes that we have documented before through randomized controlled trials and intervention that has an effect on people's financial well-being. But the long story, anyone who comes to me and says, "I want to use this scale for measuring my impact of my work," I say, "Look at this financial well-being framework, and look at the objective factors that are mostly related to subjective well-being."  Those are the ones that need to be targeted, and we have talked a lot about emergency savings and sort of having a positive cash flow, and that, for instance, it's an area that is key to financial well-being, because if you look at the four dimensions, it has an impact on all of those dimensions of well-being. 
 
>>Mr. McDonnell:  Thank you. So we have another question here from Jonathan Ferguson. Has the financial well-being data of 18-to-21-year-olds been compared against statewide for high school personal finance education requirements by state? 
 
>>Mr. Ortiz:  That's a good question. No, it's a great question, and if Carly Urban was here, she could have answered that question. This is her great area of work. 
 
I will tell you one thing that, you know, even her own research has shown one of the challenges for a project like that is that when you're dealing with a state level of financial well-being and you're also looking at an intervention that may have happened 40 years in people's lives ahead, you have sort of a challenge in that kind of analysis. And that's the same challenge that Carly has faced in her own analysis, but you could restrict some of this to just the younger segment. We have not done that. Great question. I will pass it on to Carly, but she has certainly found evidence that mandates on financial education do seem to correlate with more immediate financial decisions and outcomes.
 
>>Mr. McDonnell:  Thank you. Thank you very much, Hector.
 
And since we are at time, I would like to wrap up here and thank you all for our participants for coming to our webinar. And I'd like to thank you, Hector, for giving us such a wonderful presentation. And as always, I'd like to thank my outstanding events team of Robin and Isabel for making the show operate. We couldn't be here without you. Thank you all so much. 
 
>>Mr. Ortiz:  Thank you.

[End of recorded session.]
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