How should a credit union measure member financial health credibly?

Use a validated, benchmarked instrument, measure the same members the same way over time, and compare the results against a national benchmark and a comparison group, not just your own average. Behavior metrics like savings balances or NSF counts belong in the picture, but on their own they can't tell you whether members are actually better off.

Why aren't behavior metrics enough?

Savings can rise, cash flow can turn positive, NSFs can fall, and credit scores can improve, and a member may still not feel any better off, or credit the institution for it. Behavior data tells you what happened in the accounts you can see. It misses accounts held elsewhere, and it says nothing about how the member is coping. A credible measure pairs what members do with what they report about their own financial lives.

What makes a measure credible to a board or a regulator?

• A validated instrument. Questions that have been tested to measure what they claim to measure, not a score designed in-house for the occasion.
• A benchmark. A score without a benchmark is just a number. Comparing your members against a national distribution tells you whether you're doing well, which an internal average can't.
• A baseline before the work starts. Next year's results need this year's number to be compared against.
• The same method every time. Same questions, same scoring, re-measured on a schedule, so change over time is real change and not a change in method.
• Claims the method can support. More on that in how to prove a financial wellness program works.

What instrument should we use?

The most widely used option is the Financial Health Network's FinHealth Score®: eight survey questions across four pillars, Spend, Save, Borrow, and Plan and Protect, that place each person as Financially Healthy, Coping, or Vulnerable. It is benchmarked nationally through the Financial Health Network's Financial Health Pulse® research. If you're weighing a score of your own, see build or buy.

Who should we measure first?

Start where you can measure consistently and act on what you learn. Several credit unions have started with employees, where participation is easier to get, then extended the same measure to members. Whichever group goes first, record the baseline before programs change, so later results have something to compare against.

How does Attune help?

Attune is the Financial Health Network's exclusive technology partner for FinHealth Score® implementation. Attune runs the assessment, tracks each member's results over time, and connects them to what the institution offered next, in the FinHealth Record™. If you're working out how to measure financial health for your board, book a call.

More answers for measuring financial health and proving programs work: Prove your financial wellness program works.