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Financial Health Framework

Overview

Understanding the financial well-being of communities is critical to improving outcomes and guiding investment strategies. The Financial Health Framework, used in the Community Financial Health module of the Benchmarking application, provides a structured way to evaluate financial well-being across three dimensions: Stability, Resilience, and Security.

This framework was developed by the USAA Educational Foundation and informed by the U.S. Treasury Department Office of the Comptroller of the Currency’s (OCC) Financial Health Vital Signs methodology. It is widely recognized as a standard for assessing household and community financial health. By applying this model, stakeholders can evaluate outcomes across geographies and populations, identify disparities, and track progress over time.

The Three Dimensions of Financial Health

  • Stability: The ability to manage day-to-day finances and meet obligations based on income and expenses.
  • Resilience: The capacity to withstand financial shocks and handle adverse circumstances, such as job loss or accident.
  • Security: Confidence in future financial well-being based on savings, home equity, and other investments.

Each dimension is measured through a combination of Critical, Supportive, and Contextual Indicators that capture both direct and indirect influences on financial health.

OCC Guidelines and Financial Health Considerations

The OCC advises financial institutions and community partners to:

  • Support the financial health of customers and communities.
  • Understand the financial challenges households face.
  • Explore opportunities to offer responsive products and services.
  • Take steps to help households improve their financial health.

The OCC defines financial health as a state that enables:

  1. Stability: Managing day-to-day obligations.
  2. Resilience: Withstanding unexpected shocks.
  3. Security: Building toward long-term wealth.

Comparative Analysis & Filtering

The framework’s scoring and indexing methodology allows for meaningful comparisons between geographies and demographic segments. It also supports filtering by attributes such as gender, race/ethnicity, and state, providing tailored insights for more precise analysis.

Methodology

Indicators are categorized into three groups based on their relative importance and impact:

  1. Critical Indicators (50% weight): The most significant factors directly influencing financial health.
  2. Supportive Indicators (30% weight): Metrics that provide additional context to enrich the assessment.
  3. Contextual Indicators (20% weight): Environmental or situational factors that frame the broader financial picture.

Each group of indicators is:

  • Aggregated: Using weighted averages or composite scoring.
  • Normalized: Adjusted to a common scale (e.g., 0–100) for comparability.
  • Rolled Up: Combined into a single score per category using the assigned weights (50/30/20).

This systematic approach provides a consistent, comprehensive view of financial health that captures both short-term and long-term dynamics across households and communities.

Data Sources & Update Frequency

The Community Financial Health Benchmarking application is powered by household-level data from private sources such as credit bureaus. These datasets provide a comprehensive lens into financial behaviors and outcomes at scale.

  • Update Frequency: Most values are refreshed quarterly.
  • Future Trends: In upcoming releases, users will be able to track KPI trends over time, enabling longitudinal analysis and stronger benchmarking.