CFPB ‘spotlight’ shows about one-third of Americans saw drop in financial well-being from 2017 to 2020

Americans, on average, saw an increase in their financial well-being between 2017 and 2020 – likely aided by the government’s COVID-19 response offering varying types of financial and economic assistance – but most of those seeing improvement had higher incomes, according to a “data spotlight” released Tuesday by the federal consumer financial protection agency. Meanwhile, about one-third of Americans saw a decline in that measure, it said.

The Consumer Financial Protection Bureau (CFPB), in its report, said it defines financial well-being as “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.”

The bureau said it created a Financial Well-Being Scale looks at people’s day-to-day financial experiences and how their individual circumstances affect their ability to meet personal financial goals. The scale yields a financial well-being score – a single number between 0 and 100 – that the bureau said provides a holistic view of a person’s financial well-being. The scores are grouped in six categorical ranges from very low to very high: very low, with a score ranging from 0 to 29; low, from 30 to 27; medium low, from 38 to 49; medium high, from 50 to 57; high, from 58 to 67; and very high, from 68 to 100.

In its data spotlight, the bureau highlighted the following:

  • On average, financial well-being of U.S. adults increased slightly between 2017 and 2020, yet one in 10 Americans had low or very low levels of financial well-being.
  • Despite a national average increase, over a third of U.S. adults experienced a decline in financial well-being from 2017 to 2020.
  • Negative financial experiences or circumstances related to credit and banking were higher among adults with low or very low financial well-being.
  • People with low or very low financial well-being were more likely to face key pandemic-specific challenges.
  • People with low or very low financial well-being in 2017 were more likely than the general population to receive government financial support in 2020.
  • Despite increases in financial well-being between 2017 and 2020, longstanding differences in financial well-being among some groups persisted in 2020.
  • Between 2017 and 2020, U.S. adults of color, younger adults, and women had smaller increases in financial well-being than white adults, older adults, and men.
  • Differences in income predict financial well-being, including differences among key racial and ethnic groups.

The bureau said it first reported on people’s financial well-being in 2017, based on a National Financial Well-Being Survey conducted in late 2016.

Data Spotlight: Financial well-being in America, from 2017 to 2020