Transcript for: 

Bureau of Consumer Financial Protection
Financial Well-Being Scale: Step-by-Step Implementation for Employers



Hello and welcome to our webinar presented by the Bureau of Consumer Financial Protection. I will be your facilitator. Today we will discuss the financial well-being scale, step-by-step implementation for employers. Let me introduce our speakers. Both are from the BCFP. Before turning the call over to Laura and Irene I will run through our logistics. 

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With all of that out of the way it is my pleasure to turn the call over to Irene from the Bureau.

Thank you very much and we are very excited to be here today. To talk to all of you on the call. Before I start I want to, as a government employee, do a quick standard disclaimer.  This presentation is being made by a Bureau representative on behalf of the Bureau, but it does not constitute legal interpretation, guidance or advice and any opinions or views stated by the presentor are our own and may not represent the Bureau's views. I almost have that memorized. We do say that before all of our presentations. We are with the Bureau of Consumer Financial Protection and probably most of you, or many of you, hopefully know who we are. We are a relatively new federal agency that regulates the offering and provision of consumer financial products and services and educates and empowers consumers to make better informed financial decisions and it is that latter piece, helping consumers to make better informed financial decisions, that is why we are here today and why we hope all of you are here today. Before I dig in further you will note the title of this webinar is employee benefits and human resources, an introduction to financial well-being. We will be aiming our remarks at employers, people who do benefits, HR, plan administrators, folks like that. I know many of you on the call do not do that. I expect we have a wide range of folks and we are thrilled about that, but of course you will hear that lens in the webinar and we welcome you to think about how it could apply to your own situation but also as employers or if you’re working with employers. And of course this tool is relevant for other types of practitioners as well. So again we welcome all types of organizations on the call but we will be aiming this towards employer organizations.

Next slide. Just a quick overview of what we are going to do today. We are going to do a brief introduction about why we are here and then give context about why employee benefit specialists are financial educators, whether they know it or not, and how that could be a role that could be helpful and help you do your work better if you are playing that role. Between numbers 2 and 3 we will slip in a section on financial education and principles for effective financial education to add grounding about how fin ed works. Then we will dive into what the financial well-being scale is, how to use it, how to interpret the score, and then talk a little bit about case studies and practice in the employer setting, and some of those sections will be handled by my colleague Laura who does our employer-based work. We are both with the Office of Financial Education within the Bureau. I do more work with financial educators and Laura does more work with employers among others so we will be talking to both of those audiences. We will summarize at the end. 

Next slide. Actually we can skip over the introduction slide. So I put a question: What do you think of when you think of financial well-being? Especially for those who may not be familiar with some of the work the Bureau has done on this before, that term can mean different things to different people. We may all have a different answer to that. That is one thing that makes it special is everyone's sense of well-being is going to be different. It is not necessarily a fixed, particular income that for any person would mean achieving financial well-being, it will be unique. So we are focused on the ways that our measurement tool can help adjust across people's different aspirations, goals, financial situations to help us measure well-being. And that is a term that is been used by some federal commissions, international organizations, governmental organizations. That is a term that is the end goal for helping people financially, to help people get to a financial state of well-being. The Bureau tried to figure out what that meant and how to measure it and that is the basis of the work you will hear about today. 

Next slide please. We will cover, and get to know, the Bureau's financial well-being scale which is how we have defined and measured well-being and then how you can use it in your job in human resources. 

And so, next slide, the goal of the webinar is for you to be able to describe the role of the employee benefit specialist as a financial educator, to be able to administer the financial well-being questionnaire, to understand the financial well-being score and how it describes an individual or employee, and then to describe how the financial well-being score can be used as part of a benefits strategy. 

Next slide and now this is where I will turn it over to Laura who will talk about how this concept fits into the employee benefits and employer world and how that is connected to financial education.

Hi everyone, I am Laura, the senior content specialist for the Office of Financial Education here. Most of my career before joining the Bureau was spent in benefits and investment education working with employers of all sizes, so I am excited to be talking with you on this subject, realizing that many employers are now turning their attention to the financial wellness of their employees. 

Next slide please. I think some of the reasons for this include a genuine concern for employee well-being and for stress levels generally, recognizing that any kind of stress, including stress about money, can show up in employee productivity, health and job satisfaction. 

Next slide. We have some other business metrics we have been hearing from employers that are affected by lack of financial well-being from employees. Those could be productivity, workplace accidents, usage of employee assistance plans, short and long-term disability, turnover, absenteeism, healthcare costs, all of these types of business bottom line metrics can be affected when people are dealing with stress, particularly financial stress. You might think of a person who is dealing with a debt collector either for themselves, for their parents. They would have a physical response to this financial stress and they might even not access their medical care because their funds are so tight and this can be seen at any level of the organization. Keep that in mind and it could be short-term or sustained over time. Throughout this presentation I want to keep in mind that in the position of HR or benefits you might get to know personal details about an employee, for example their health situation or family details, and naturally you have a professional obligation to keep that personal information private and confidential, not to let it affect other decisions about the employee. And I want to stress when we talk about the financial well-being scale, the way an individual employee answers questions about this, or the financial well-being score that an employee may ultimately receive, we would expect this personal information would be included in that information -- so that that would also be kept private and confidential and not shared with anyone who does not have a need to know it. 

Let's continue to the next slide. Financial wellness you may not think of it as a primary part of your job, but you really are in a unique position to have a positive impact on the people that you are serving. The nature of the relationship between an employee and an organization is at heart financial. Employees make a lot of consequential financial decisions at work or related to work along the lines of choosing benefits, saving for retirement, making tax withholding choices and even paying for transportation or education. Those are all work-related decisions that can happen -- and to be honest, in this world, the workplace is the only place where a lot of adults get any financial education at all. So in the course of this webinar we will help you with some tools and ideas to help build understanding of how the workplace can be a supportive place for employees to gain skills for day to day as well as long-term money decisions. 

On the next slide I would like to introduce to you the five principles of effective financial education. Probably when you hear financial education or employees hear financial education you might think of one-on-one counseling or classes that are offered. Today there is more and more in the realm of apps and technology that are providing things you might call financial education. Hands-on learning, kinds of reminders, games, alerts, things that tend to bring financial education into a more technological setting. Whatever form it takes, for this education to be effective the goal should be to make a real positive difference in somebody's actions that lead to increased financial well-being. Let's walk through the five principles. These principles -- just a word about how they were developed. They were developed and synthesized through discussions that the Bureau has been having with financial educators, coaches, and other types of professionals who work with adults on a daily basis to improve their financial skills, their financial well-being. So we hope to illustrate how these can be employed in organizations that are working with employees. So each one of these we’ll go through, one at a time. We’ll start with: Understand who you are talking to. And this seems, it is an important starting place by understanding the challenges and goals of the employees you are talking to. A good diagnostic hopefully will point you to issues to focus on, how to structure your program as well as providing a baseline or a benchmark for tracking success. You might ask your employee workforce: Are they worried about student debt? Retirement? Making day-to-day ends meet? About their own individual finances? Are they carrying a range of responsibilities for family members? These kinds of decisions can be more than just individual employees so think about how you can incorporate everybody who has influence on that employee’s financial decisions. For example, an employee may be carrying to work a range of financial responsibilities, like managing their own finances, managing finances for an aging parent, or helping a teenager find reliable transportation. 

The second principle here on the next slide has to do with providing actionable, relevant, and timely information. You might think of this as your communications strategy and whether your benefits and HR communications are hitting the mark. One part of this is to identify the teachable moments, the ways that you can reach people and the times you can reach people to make it easy for them to find information on specific decisions. For example, maybe upon hiring, but it could also be at any time there is a change in their money situation or a life event that you get to know about. To try to make it easy to find information to make a specific decision. If an employee, for example, feels they need to make a decision like stopping their contributions to the 401(k) plan, make sure that information is easy to find., that here is enough education provided to make sure the employee understands the effect on their paycheck and down the road on their long-term savings, and is there a way for that employee to remind him or herself to get those savings restarted in the future. 

The next principle on the next slide is talking about improving key financial skills. People rely on habits as well as conscious skills when they take action on their money situations for their own life goals. So understanding how those habits and skills are formed and then helping to improve them can make financial education more effective. I am not going to go into detail here but the Bureau has a lot more information if you are interested specifically in this principle on key financial skills, habits and decision-making behavior. 

Taking a look at the next slide, we will talk about how to build on motivation. This is the way to help people. Financial education can really help people do this. They can work with their motivation to strengthen their behaviors and focus on what actions they can take. Trying to help people focus on their own values rather than setting up external influences or benchmarks, help them persevere when things get harder to do, and build confidence in achieving their financial goals. One of the ways we have seen workplaces set this up is, maybe there is a buddy system or peer group that can reinforce each other's motivation. Some of the current money apps they may be using also have ways to do this, helping people celebrate smaller incremental achievements on the way to their ultimate goal. So that helps them continue to stay motivated and build that confidence. Those are a couple of examples. 

And on the next slide, the fifth principle is to make it easy to make good decisions and follow through. I'm going to spend one minute on talking about making good decisions. Let's define that a little better. What we mean by a good decision is a decision that supports the individual’s own goal, however that individual defines it. We recognize there are situations that people encounter that can strongly influence what they actually do and whether their actions do in fact ultimately support the goals they have set for themselves. Specifically that is our definition for a good decision. And the workplace definitely has unique opportunities to implement this principle. You can make it easier for people to obtain financial education, integrate it into their workday, integrate it into benefits processes that they have to go through, through payroll, through information sessions that are front and center for employees. Those are unique ways the workplace can influence this and it helps people overcome what they call the intention-action gap -- the difference between what they want to do and what they actually do. There was one European study where 72% of people say they wanted to buy a green product, environmentally friendly product, but only 17% of them actually did. Closing that gap is what this principle is aiming to do. 

On the next slide I want to wrap this up. Please don't be overwhelmed by these. Apply them as they make sense in your environment. If you follow any of these five principles, and help implement them in your workplace, you are going to be helping people make better choices. As we go back to the first principle – understand who you are talking to --  one way to set a baseline is through the financial well-being scale. And I will hand this back to Irene who will walk through that for a minute.

Thank you Laura. And now we will get back to financial well-being scale as one tool you can use in helping your employees move towards financial well-being and in improving your own financial education offering. When thinking about what you as an employer could do and about how you could help people move towards financial well-being, one thing that our research is based on is the idea that financial education is not only about the hard numbers. As an employer the data you may have access to is income and tax withholding, healthcare benefits enrollment, retirement plan enrollment, contributions, wage garnishments – all those pieces are important numbers and do say a lot about someone's financial situation, but there are limitations as referenced in what Laura said. People have different goals and aspirations. Everyone is individual. They’re trying to achieve different things through finances and it is important to note how people feel about their financial well-being. The subjective aspect is very important. People know more about their own situation beyond just the numbers and know what goals they are trying to achieve, so measuring the subjective part is really important, and that is what the financial well-being scale does. 

Following up on that idea there is no single element, no single data element that can fully capture how people feel about their money situation. There is no single number. The kind of numbers we have traditionally captured. And so the Bureau has tried to create both a definition and a way to measure well-being as the ultimate goal of financial education and a way to capture people's subjective sense of where they are financially. The Bureau has a four-part definition. I will read it quickly. It does not appear in full on the slide, in part because we know people may have other ways of thinking about financial wellness in the workplace. Our definition is that an individual has control over day-to-day, month-to-month finances, has the capacity to absorb a financial shock, is on track to meet their own financial goals, and has the financial freedom to make choices to enjoy life. That is unique people have different roles and choices that they would make and you can group that into what you can see on the slide here: security and freedom of choice, for the present and future. Those things I just said to you fit into those boxes. We went through a fairly lengthy process to create that definition, talking to consumers, educators, doing literature reviews, and put out that definition several years ago. Everyone said, “Great definition, but how do we measure it?” So the next step was creating the scale. So with this relatively new financial well-being scale you can now score and measure financial well-being. 

Next slide please. The Bureau developed and tested a set of questions or a scale – that is one thing that the term scale means – to measure financial well-being. And it is designed to allow practitioners and researchers and others, such as employers, to accurately and consistently measure something that is not directly observable. I cannot look at you, I cannot look at your employee file and say, this person feels really good about their finances, without actually asking. So this scale will allow us to get at some of those elements. Our research shows that generally a well-being score is fairly stable and does not vary much in the short term. So it is useful for measuring differences across individuals or groups or customers or different types of employees. Although certainly different interventions, we think, anecdotally, and hope over time to do research on, of course we hope that people can increase their financial well-being score through doing assorted financial education activities and other things. The last thing before we talk about the scale itself is that it is a government resource and as such it is free and publicly available. It is not copyrighted so it is available for anyone to use. We have a number of tools to help you use it. 

Why might you want to use a well-being scale? As an HR professional, you may be dealing with immediate issues of an employee's financial well-being. You may have them being contacted by bill collectors or employees requesting pay advances or loans from retirement plans. You may need to process wage garnishments. Of course you need to maintain the employee’s privacy and confidentiality, but those may be opportunities where you may want to be talking to people about their financial situation and how you can either help or potentially refer them to other sources of help. And this scale can be one tool. And also in your work beyond assisting individuals, you may be in a position to look at trends or patterns in your employee population as a whole and the well-being scale could help support that assessment of your workforce. It can help to provide data points to assess your benefit strategy, it can help your organization identify needs or gaps in benefits packages, it can help employees identify opportunities to increase usage of existing benefits that help them move towards well-being. It could help you adjust your products and services to better align with this score. So there is a bunch of ways that you could use it, potentially, with your employees to help meet all those goals that were mentioned earlier around productivity and stress and all those other things. 

What the scale is and isn’t. This is part of your toolbox. The scale which you will see in a minute does not replace other things you might be doing. It does not replace other types of data collection you may do, or services you may offer. It is meant to be one more tool to help provide a full picture of your employees’ financial state. And, you can compare the numbers that you get with larger national data or other audiences to have a better sense of where your employees stand and how to help them. And the financial well-being scale, because it is subjective, does not diagnose specific money issues. It’s not going to tell you, this person has a debt issue and they need to do five things to fix that debt, and here’s what they are. It is really subjective. You may have other ways to address very specific money topics but it is meant to be a broader assessment of where people are feeling, although they of course know their own situations well. They could tell you more about what a low score means to them -- why it is low -- if you're having that kind of conversation. 

Just quickly the scale is 10 questions. You will see them in just a minute. I won't say much about this but while they are deceptively simple questions, they represent a large and complicated research process that involved a series of cognitive interviews to ensure people understood the questions, factor analysis(I don't even completely know what that means) but it’s a way to figure out which questions best measure the underlying concept. And lastly, my favorite word: psychometric testing, try dropping that in a social gathering and see the response. Which is a way of measuring whether questions are correctly measuring the underlying concept. It is a type of science that is used to develop a lot of different questionnaires that are rigorously tested. This was tested with over 15,000 people. All that is to say it is a reliable and valid scale. 

On the next slide you will see the questions that make up the scale. Again 10 questions. What the person taking the questionnaire would answer – whether these different statements apply to them completely, very well, somewhat, very little, or not at all, or a slightly different formulation (always, often, et cetera). And they are actually very simple questions. I could handle a major unexpected expense. I am securing my financial future. I can enjoy life because of the way I am managing my money. My personal favorite: Giving a gift for a wedding, birthday or other occasion would put a strain on my finances for the month. You can see the questions are about how people feel about their finances and you can see how they relate, some of them are clearly about day-to-day finances and some are clearly about planning for the future, some are measuring your ability to make the life choices that you want to make. They are getting at the questions, sometimes with a positive frame or a negative frame. Intentionally we put all these questions together you will get a single number that will be your financial well-being score. There is also a shorter version of this questionnaire so I am going to ask to jump to slide 34 because I think that is a better order. Sorry. 

In terms of how to administer it, there are two versions of the questionnaire: the 10 question one you just saw, and there is also a short version of five questions which gives you approximately the same score with the same level of validity as the longer version. Individuals can answer these questions on their own. They can take it themselves or they can do it with a person, with a benefits specialist or financial coach. So you could administer it as part of an annual employee survey or part of any education program you might have as part of information or communication plan. And as we note here, generally the longer version is preferable but certainly if it is a longer questionnaire and you are trying to shorten or limit the number of questions you’re asking, generally the short one is also quite satisfactory. 

Next slide please. We are going to talk about interpreting, scoring and interpreting the scores. The important thing to know here is that you take that little questionnaire that you saw and you get a bunch of numbers but those numbers are not your score. You have to go to a scoring sheet. 

Can we have the next slide? Basically you have to add up the numbers, go to a worksheet. So if you go to the next slide, we don't actually have a screenshot of the worksheet here, so all these instructions don't make complete sense, but you have to go and look across a table like the old IRS tax table. Remember if you ever did your income taxes on your own? We have to see based on your response pattern what your score is. So again it’s a little hard to understand this without actually seeing the scoring sheet but there is a next step of scoring. 

If you want to use the scale, people have to answer all the questions. You cannot skip questions or the scoring will not work. So there are no “don't know”s or skipped questions. If you want more detail on exactly the underlying data analysis for the scoring methodology and all of that, it is all available on our website for those of you who get into data and research stuff. More importantly because the scoring I just described, although you cannot see it, is an extra step. We do now have an online version of the financial well-being scale that exists on our website that provides automatic scoring. You can go in and ask the questions with a click, get an immediate score. We don't save that data but someone can print it out, so you could send employees there and the URL is there. 

Next slide. The financial well-being scale score is a number between zero and 100. It was intentionally set with the median being around 50. Remember this is not an academic scale. 60 is not failing and 90 is a good grade. Put that out of your head. We do have a general sense. The national average is 54 and we know from other data analysis and a large survey that essentially scores of under 50 suggest people are struggling and having trouble making ends meet. Of course it is worse the lower you are. Between 50 and 60, which is where about one third of the population falls, the person has somewhat more stable finances but still is struggling some of the time. Above 60 approximately – and again, about a third of the population is in each of these places -- suggests that people are generally financially secure. We have more detailed benchmarks coming out fairly soon but this gives a general sense. Again the average is 54. And from our experience with people using the scale in a financial education setting, a lot of people who are struggling with their finances are going to be in the 40s and sometimes lower, which suggests there are things they could do to improve their finances. 

Next slide. We actually have a whole report of survey results because we did a large national survey using the scale and other questions about people’s financial situations and behaviors. We have a whole report on that if people are interested. Just quickly, we do know that things like liquid savings are a very important predictor of a higher financial well-being score. Certain day-to-day money management habits. Financial self-efficacy. And even since this deck was developed, we have new research coming out showing that one of the single most important determinants is financial skill and that really means how to find information, trustworthy information, how to process that information and use it and how to execute a decision based on it. You don’t need to know everything, you just need to know how to find out something for the immediate decision you need to make. And that is a place where employers can really play a role of being a trusted source. People don't need to know it all, but do they know how to get to it and you as an employer can help people find trustworthy sources of information or can help people understand the decisions they are making around the benefits you offer, like retirement plans. That is a very important component of well-being. When we control for everything, obviously income matters hugely, and lots of other demographic factors are important, but when you adjust for all of that, we find again that skill matters a lot and again income is not the only determinant. People say you have more money and you are more financially well-off. That is true as a general trend but there are plenty of people with lots of money who do not feel they have well-being and have trouble managing their money and people with less income who do better so it does not explain everything. So it is really that other 30% that is the place where I think you can really make a difference with financial education. We will talk a little bit now to close up, about how we can use the well-being scale. 

The purpose of the well-being scale: We really designed it to allow practitioners, researchers and folks like employers and employee benefit folks to accurately and consistently, as we said earlier, measure something that is not easy to observe, but that the respondent knows a lot about. So we can use the score to quantify and compare across time or across individuals. We at the Bureau have used it to study the relationship between financial well-being and other factors. That is where we got that finding about financial skills being so important. That I mentioned a short time ago. And so we already talked about how to score it. I think the important thing, too, is if you are using the financial well-being scale with employees, telling people what the score means. Practitioners have generally not shared the number with people. If I tell you, you are a 38, what does that mean? We are still refining our own sense of what it means and how to communicate about it, but it can certainly suggest areas where a person could do more to work on their day-to-day money management or seek other types of financial education that would be helpful. So it is potentially a conversation starter or entry point. 

And so moving to the next slide: Things you can do with it. Again, you can use it as an initial assessment and I think if you click once more there will be a sub bullet. There is. So you can use the person's financial well-being in the moment to see how they are feeling about things. And really a lot of folks said it is useful as a conversation starter. So if I asked someone what is your income, it’s a straightforward answer. It may not be that helpful. But if I say can you afford to buy a wedding present this month, what would that do to your finances, and you would say, oh my God I had two birthday parties to go to, and I could not afford it. And then you can open up and say maybe how can we set aside a special occasion fund or whatever the “it” is. That’ reallyif you are in a one-on-one situation, but generally if you are doing that it could be a nice assessment or starting point or conversation starter. 

The next one will go green. Track individual progress so if you are either working with someone over time or doing periodic surveys you can use this scale to track changes in individuals’ financial well-being over time. You can look at the whole score. You can also look at changes in answers to individual items of those 10 questions, which may provide some additional insights, although you don't get the power of the scoring methodology that gives you a sense of how the different factors interact. But some changes in particular questions may highlight an individual’s preference for taking more control over money management or building stronger protections for financial shocks, which may suggest products or services or types of education that would be particularly helpful. 

Going to the third bullet here, assessing your benefits and communications outcomes. If you are an employer and you’re thinking about your employee benefits and how to help your employees on well-being, the scale can provide a tool to measure the extent to which those programs are working. Are they improving the financial well-being of the individuals? You could use it as part of reports on the effectiveness of your programs and services such as financial education you may offer. You could also use it to compare across different populations in a program to see how a particular intervention affects different people in different geographical areas or across different job roles and may suggest different things that you can do to help people in different situations. 

And then the last soon-to-be green bullet with one more click and this is really for any of you who may be doing something much more broad around research: We certainly have encouraged people doing large-scale surveys and this has been used by surveys at the Federal Reserve and FINRA Investor Education Fund and other survey researchers have been using the financial well-being scale in surveys they are doing across the population. If any of you on the call are doing that type of research, survey research or things like that, the scale is a nice piece to add to it. It has been validated. We have national data you can compare to, so it does provide an opportunity to analyze the relationship between financial well-being and other factors.

Laura will bring us home around how you can use this in an employer setting and make this work in practice.

Hopefully you have been thinking through a few applications as we been talking and coming up with ideas on your own, for your own situation. These are thoughts about how to administer this scale. Think about a situation where you might administer it companywide. You could administer it as part of information gathering and you could collect financial well-being scores and analyze them on an anonymized companywide basis. Look at whether at a high level are your employees self-reporting a good level of financial well-being? Is that, whether they are reporting a relatively strong financial well-being relative to the national averages that were just mentioned? Taking a look at differences among the employee groups, taking a look at the communication strategy, and seeing how that can help reach employee groups that you want, or help look at some of the resources you provide and how you might adjust those to work toward that goal. You could use the financial well-being scores to compare and benchmark against your peers as you look at other things that you do to stay competitive in the benefits and compensation world. And also, as we were saying, related to employee satisfaction, look for whether the financial well-being scores either overall as an organization or within different employee groups correlate to things like job satisfaction or other kinds of factors that your organization is interested in. Relationships between healthcare enrollment or benefits usage and things like that. Just some ways that the financial well-being scale might be able to help your benefit strategy. 

Looking at the next slide, the scale can also help in providing an entrée into financial education generally. A couple ways you could deploy it depending on your organization’s goals. If you are at the point where you are interested in financial well-being, but maybe what you're ready to do at this point is open up this conversation or help employees as part of your self-service strategy, you can deliver the link to employees and encourage them to take the questionnaire on their own. Look at their scores, make decisions for their own situation based on the information they are getting from there. That might help you encourage employees to take action about something that may be on their own minds. Just beginning the discussion inside the organization, even without a full financial wellness program, you can start to raise the awareness that this is an important topic for your organization.  Use it as an interactive activity to start the conversation, to get people started on a path, to start to generate ideas about what employees or management may want to achieve as part of a starting place. I have a couple of hypothetical examples to go through. 

On the next slide there is a broad application here that might percolate throughout the organization. So let's say company X uses the financial well-being scale to continually measure and improve their employee programs. So this company offers the financial well-being scale as part of their new hire orientation, as part of their process, and then annually includes it in their employee satisfaction survey. Based on the results that they see from the administration of the scale, the company comes back to HR and benefits and says, your mission as a department is to enable all employees to contribute at optimum levels toward the success of the business. Let's use this information about financial well-being to assess whether we need to adjust the overall strategy for the business, the individual benefits and program offerings that we have, and the communication approach. This may be a way to broadly apply the results of the financial well-being scale throughout the organization. 

On the next slide there is a different example. For a more specific or focused application. To use the scale to examine differences in groups of employees and then fine-tune the communications throughout the company. So recognizing that the benefits offered are consistent through all levels of the organization but not all benefits are equally valuable to all employees. There is not necessarily equal take-up for benefits among all employee groups. So administer the financial well-being scale and then examine those results by different employee characteristics. Does financial well-being correlate to a certain level of tenure or an age group or a division of the organization? Type of job or location? One observation might be if financial well-being tends to be lower among younger employees and in the manufacturing facilities, the company could take an action like providing a refresher on financial coaching benefits that it might already offer, and make sure that employees in those job categories are taking advantage of that.

Back to you so you can sum up where we can find these things online, and then we will take questions.

Everything we have said and much, much more is available on our website. We have reports on how we defined financial well-being, the definition that I spoke of very briefly. How the scale was developed. How to use it. We have a report called Financial Well-Being in America, which summarizes the stuff I said about the average score across the country and the different score bands. We have a new report that focuses on financial skill and its role in financial well-being. All of that is on our website. It’s not all in one place – in fact, we are in the process of putting together a hub. Probably the most practical place to start is probably the second link here, [see slide] which talks about the scale itself, how to score it and use it. And then if you want to just try it out yourself in its most usable form it is on the online questionnaire, the tool where you can go and click boxes and out comes your score, along with a little bit of tools and resources we have that connect to  day-to-day money management and long-term financial security. That is the top URL. [See slide] And of course, if you go to our website and use the search function for financial well-being, you will see a lot of these things come up. So that is a place where you can find out more about this. We also have plans in the longer-term to have some more specific toolkits for practitioners in the financial education field, and hopefully some things applicable to employers specifically as well. Stay tuned for all of that and I think at this point we are ready to open up for questions.

Thank you Irene and Laura, I appreciate your content presentation and we will move to questions at this point. If you have a question for Laura or Irene, please do use that Ask Question button in the webinar and that is on the player page. We do have a couple of questions that came in and I will start with:

In addition to an aggregate score, can you get scores along the four dimensions of financial well-being?

That is an excellent question and unfortunately the answer is no. The scale as a whole uses complicated scoring technology similar to what the SAT does, to give you a single number, and it is not designed right now to break it down by the different dimensions. You can see by looking at the questions -- I alluded to this very rapidly in passing previously --  some of them, it is clear they are referring more to day-to-day money management, like “my money controls me” or “I have trouble making ends meet” or whatever the wording was, and some are more about the other dimensions. But they all interact in different ways, in complicated research-y ways so right now you cannot get a separate score for each of the four. You can only look at how questions change over time, which is imperfect. I will note there is a new -- it is newer so we are just beginning to promote it – we also have a financial skill scale, which is also a 10 question scale. It is different but it is in all the materials about financial well-being that ask specifically about this issue of skills, you know how to do certain things, which also gives you a score. It is sort of one component. It may be of interest to people if you want to also use the financial skill piece, but we can’t yet do things along the four dimensions. That was a very long way of saying no. Next question?

That sounds great. Thank you for that and we do have another question and it is: I have administered the Financial Well-Being scale in our existing financial wellness program for my company. One question employees often ask me: Am I supposed to answer the question based on how my finances are right now, or how they usually are?

That is interesting. I talked to a lot of practitioners of different types about their use of the scale and it is always “lots of people don't know what the question means and should I interpret it for them” and “what if they are not happy that day, will that affect their score?” I think this sounds trivial in a way, but it should be however the person wants to interpret it at the time. I think it is meant to be what is your sense of your financial situation.  Generally not necessarily this precise day but it really is for the person to answer the way they want to answer it and again that sounds silly, but when it was tested, we tried many, many iterations of the questions and these were the ones that best captured the underlying concept and stayed steady, in ways that matter.  We encourage -- don't interpret the question for people. If they say they don’t know what it means, say “answer as best you think” or “how do you feel as you’re answering the question.” And that is the best way to administer the scale. It should not change dramatically based on how they are feeling that day. The questions are intended to get you out of “how do you feel this minute.” How do you feel the end of the month and how do you feel about the future? So if the research was done right, it should account for the different ways people could interpret that.

Thank you for that. Our next question: “Can you repeat that definition of a good decision, that was the number five principle, and they would like you to make it easy.”


The definition, when we say “make it easy to make a good decision,” we mean a good decision is one that reflects the person's intentions. So if I set a goal of buying an environmentally friendly product, if that is important to me and something I feel is what I intend to do, is it very likely that I will actually make that purchase that reflects my intention? That is a nonfinancial example but that is what that means. A good decision being one that supports whatever the individual has decided their goal is.

There is an implied hint there that good is not defined by us -- being the employer, the practitioner, the Bureau -- it is defined by the person. So you may not, or I may not, agree with Laura's goals, but there is, I think it is hidden there, the idea that just because you don't like the decision, don't like someone's goal -- we have to be open to everyone having their own approach and set of goals and life choices they make. And we want to support them in achieving their own goals and not add our own to the mix. Is that accurate?

Yes.

Thank you so much. The next question. This is in reference to principle number 2, and what you mean by timely information?

I think mostly by timely information we mean in time to affect the decision the person is considering. So information about home ownership is generally interesting, but specific information about how to make a decision about a home loan is going to stick better if it is given to the person when they are facing that decision. So timely information is one that is in time for the choice in front of that person.

It is great to have general education about financial topics, people can always use that. But for many folks what’s going to make the most sense is information customized to the decision they are making at the time. It’s connecting the information to the decision of that person that is relevant to that person at that time.

Our next question: Will today's webinar be recorded and made available for further viewing and listening with colleagues who could not participate today?

Yes, that is our intent. The webinar is being recorded and the recording will be made available. I would be patient. Sometimes these things take time to work their way through the process and eventually be posted. 

Where will it be posted?

We will post it on our website. I have everybody's email addresses and once it is posted I will send an email out to all of those who registered with a link to the webinar for viewing later on.

Our next question -- I know we are close to time but the question is, particularly from the employer perspective -- How would you compare the value of using this scale as opposed to other scales like the financial capability scale?

That is a great question. We get asked that question all the time because there are several other scales out there, financial capability scale from University of Wisconsin-Madison, the CFSI financial health index, and we love them all. And they really do measure different things. And in fact, Michael Collins, who did the financial capability scale, was an advisor in our project as well, so it is all intended to be very complementary. The financial capability scale really measures financial behavior, so it is what someone is doing. It is not as much measuring -- it is sort of an interim step, people need to have the skill and knowledge to make the financial decisions to do the financial behavior that will help them move to their goal that leads to objective financial situation changing which leads to financial well-being. That is a pathway in our pathways report that came out a couple months ago, also part of our financial well-being suite of tools. The financial ability scale is measuring that behavior: Are you paying bills late, The questions like that are about behavior. There is an objective, although they are self-reported, the financial well-being scale is really the end goal, are you satisfied with where you are? It's not, did you pay your bills late? If you did pay your bills late, you may be unhappy with your financial situation or well-being, so it's probably linked, but it is really measuring something different. The financial health index is also looking more at objective financial situation, your behavior leads to where you are financially, how many credit cards do you have, how much debt do you have, and that index has changed over time. A traditional measure that is, a bit more, and ours is the subjective long-term goal. So they are each valuable and useful in a different context, depending on what you are trying to measure and we encourage you to look at all of them. Your question is from an employer perspective and Laura would like to address that specifically.

There are many ways and many measures out there and another benefit I think to the financial well-being scale is that we have the Financial Well-Being in America nationally representative survey. Many of the metrics that are available in the employer world take the measure of people who, for example, participate in an employer’s retirement plan or people who are full-time employed and that is why they were invited to take a metric or scale like that. So the financial well-being scale is not only validated for all ages and ranges of people in the United States but it is really representative, the survey results are representative and the averages and benchmarks are representative of the entire US population.

An observation I would like to make which is that if you are thinking about people's privacy and their comfort level with sharing certain things, the other scales do ask a little bit like, are you paying bills late? You may be uncomfortable saying yes I do, and by the way my bill collector will be calling me at work tomorrow. Whereas the questions are more general, but how you feel about your finances, I am thinking out loud here, maybe it's more comfortable to answer that in an employer setting because it is not about specific behavior that you may feel embarrassed about or uncomfortable talking about. That is just a thought. Again there's bigger considerations about what is the right measurement tool to use, but that is just a thought. And actually just because I have the floor, I see the couple next questions are where do we find the financial skills questions and the pathways reports. They are two lovely reports that came out September 14th of this year. The Pathways to financial well-being and the Measuring Financial Skill: A users guide and they are both on our website. To be honest it is probably fastest to Google it, although Laura may be in a position to look up the URL. Eventually they will all be in one place. They are--

You will be able to find them most easily, probably if you start on the consumerfinance.gov website and look under Data & Research. There is a section for Research and Reports, and that is probably one of the easier paths to find it, rather than my trying to spell out a whole URL on the phone.

Or use the search function on our website. If you type in “financial skills” or “pathways” it may actually get you there faster. Or plain old Google too. I am personally fond of those reports and would love it if you looked at them and I think we are just starting to unpack what all that means for the field. The scale itself has been around longer, we have had more time to have people try it and tell us what they think, and where the pain points are. Other pieces are newer, especially the skill scale. We are still exploring how that might best be used in practice, which is why we did not focus on it today, but we would love to have people try it out and let us know what they think.

Thank you for that and thank you for your presentation. We are a couple minutes over at this point so I am going to go ahead and -- I already thanked you but -- thank you Ken and Laura and Irene for sharing your time and expertise. Thank you to our participants for joining us today. This completes the webinar. Enjoy the rest of your day.

[End of webinar]


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