Meaningful Consumerism

FHI Partners with Salvation Army for Award-winning Program

Thanks to a partnership between Intermountain Salvation Army and the Financial Health Institute, people who are struggling with addiction recovery at the Harbor Light center are getting back on their feet. The Financial Health Institute developed a program that specifically meets the unique financial challenges of their target population. As we all know, being financially stable makes a difference in the amount of stress that people endure and that has a significant impact on addiction recovery. In recognition of this accomplishment, Consumers United Association announced that our unique partnership won a Right On the Money award for 2016.

The awards are given each year to organizations that provide excellent financial education programs to people of all ages, with a special emphasis on unique populations and tailored programs. You can read more about the awards at


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Lessons Learned from Personal Economics Program Pilot

For the last eight years, the Financial Health Institute has been teaching courses at nonprofits across the country. From this experience, our faculty noticed a recurring trend in the sector—massive staff turnover. We understand that personnel change and movement occurs in all sectors, however, there are additional consequences and effects this may have in a field that is largely dependent on interpersonal rapport and trust. People who are trying to recover from issues like substance abuse, plus gain and maintain housing and employment, among a litany of other challenges, may depend on the relationship they have built with their patient, experienced and knowledgeable human services staff to guide them through their recovery process. This is not to say that we expect or desire all things within organizations to remain static. We accept and understand that this is the “nature of the beast,” we just think we might have a partial solution.

We created the Personal Economics Program (PEP) to ensure that the customers of nonprofit agencies were provided consistent and in-depth education in the areas of Financial Health, Employment Sustainability, Benefits, Housing Exploration, and Health Literacy. Each course is 12 – 24 hours of content and 6-12 hours of directed assignments, so participants can practice what they have learned. This 12-week comprehensive program was piloted in November 2015 and has been even more successful than we could have imagined. As a result of the program’s success, we have been asked to continue to provide the course at the original pilot location and at two more organizations. We truly believe that the curricula taught in this program enable customers to gain essential knowledge that will allow them to successfully navigate their lives and begin to make essential behavioral changes.

In light of the completion of the pilot PEP, I recently interviewed Joanne McLain, PhD, one of the instructors of the program and co-creator of the curricula.

  1. What do you think are the most valuable lessons that participants learn from PEP?

“I think the most valuable lesson that participants gain from PEP is a sense that they can do things to make a real difference in their own lives. They also develop valuable skills that will transfer to other areas in their lives, like improved attention, critical thinking, goal-planning and a future focus.”

  1. What gap do you think PEP fills in the human services system?

“It can be hard for human/social service programs to sustain education over an extended time like this. Instead of one or two sessions, PEP participants attend classes four times per week for three months. This allows us to dive more deeply into complex and difficult topics and take longer to discuss important issues. It also helps in the development of skills for discourse and critical thinking. In my experience, our focus on the combination of financial health, employment sustainability, health literacy and benefits exploration is unique in the field. Participants have expressed sincere appreciation for the knowledge they are gaining.”

  1. In your experience, what is the largest educational need of the participants in the classroom?

“The ability to sustain focus over time and to mentally grapple with complex concepts are skills that can be difficult to develop when you are living within the reality of poverty and substance abuse. As a result, all other knowledge and information becomes hard to process.”

  1. What has been the largest lesson you have learned as a PEP instructor?

“How incredibly varied the participants’ lives and perspectives are and how gracious most of them are, despite the difficulties that come with running a pilot program.”

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Credit Scores Predict Relationship Success

We’re all familiar with the situation. You have a friend who you love to spend time with. The problem is their version of “spending time,” involves spending money and lots of it. You enjoy the night out, but the subsequent financial stress you experience is a recurring issue at the core of your friendship. Meanwhile, you have another friend whose idea of having fun together is more like yours—taking a hike for free, cooking dinner at home, etc. You get the drift. The bottom line is that money—and your relationship with it—can frequently make or break friendships, and as it turns out—romantic relationships.

New research from the U.S. Federal Reserve examined millions of credit scores and determined that couples with healthy credit scores, have a healthier coupling. In fact, researchers posit that “credit scores reveal general trustworthiness” of relationship partners—an integral quality of a lasting relationship. Even more interesting is that the researchers found that people tend to match up with those who have similar credit scores, by a mere 69 point difference.

So what does this mean for the dating world, including dating websites? It could mean that the inclusion of details about credit scores might be useful to truly find a long-term match. However, for people who have had their credit scores ruined by fraud, divorce or other forces outside their control, this may seem an unfair representation of their true character or potential. Either way, this new research concretizes something that we have all experienced—our relationship with money and our financial health is in many ways related to the people we choose to surround ourselves with, for better or for worse.

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Familial Financial Strain Linked to Childhood Obesity

A new study suggests family-related stress can be linked to childhood obesity, especially in girls. The study examined three types of family stress: family disruption and conflict (divorce, a parent’s incarceration or death, child suffering violence); financial strain (living below the poverty line, mother’s long period of unemployment); and maternal poor health (mother’s binge drinking, drug use and depression). The longitudinal survey data found that girls who experience family disruption, conflict or financial strain repeatedly between their birth and age 15, were more likely to be overweight or obese by age 18.

This study is revelatory because it demonstrates that the chronic financial and economic stresses that a family experiences can directly affect the physical well-being of their children. Of course, this has huge long term implications for not only the health of children, but for the associated costs of obesity. This means that in order for obesity intervention programs for children to be effective, they should focus on reducing family related stress by offering services that focus on financial stress and its dynamic relationship with physical health.

The Financial Health Institute knows that financial and economic stress impact physical, mental and social well-being. Our training programs focus on understanding why financial stress impacts all areas of our lives and provide tools to alleviate this stress, thereby improving financial and physical wellbeing. These are the kinds of services that would be incredibly effective if integrated into school-based obesity intervention programs. Contact us for more information about our training programs and services.

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Financial Health Defined

What the heck is Financial Health anyway? And why is it important? Ask those questions in a room full of people and you will get an interesting array of answers!

Typically, when people respond to this question, they think of better financial plans, having some savings, having little or no debt and the ability to meet needs while having some wants met. Usually, there is consensus that good financial health means less worries and stress.

So, these are good descriptions of what having “good Financial Health” might look like – but they don’t really define the term. The Financial Health Institute, as our name would indicate, is very interested in the definition of Financial Health, probably because it is the cornerstone to everything that we do and hope to accomplish. And, so we‘ve spent a lot of time working on a definition that takes into account the full scope of what we think “Financial Health” means. We define it like this:

Financial Health is:

The dynamic relationship of one’s financial and economic resources as they are applied to or impact the state of physical, mental and social well-being.

Here’s why we define it this way.

The World Health Organization, on the other hand, defines “Health” as: “A state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” While in this definition, a person’s financial situation is, at best, implied, the World Health Organization does further elaborate on this concept in their explanation of Health Promotion.

Health Promotion is described as: “The process of enabling people to increase control over, and to improve, their health. To reach a state of complete physical, mental and social well-being (their definition of health), an individual or group must be able to identify and to realize aspirations, to satisfy needs, and to change or cope with the environment.

Health is, therefore, seen as a resource for everyday life, not the objective of living. Health is a positive concept emphasizing social and personal resources, as well as physical capacities. Therefore, health promotion is not just the responsibility of the health sector, but goes beyond healthy life-styles to well-being.”

A Resource For Everyday Life

Well now, that’s very interesting. “Health is seen as a resource for everyday life…Health is a positive concept emphasizing social and personal resources, as well as physical capacities.”

I like this definition as it would support what everyone I’ve ever discussed this concept with already knows – that is, health is an invaluable, intangible asset closely aligned with the ability of a person to maintain or grow financially and/or economically.

In the traditional sense of the term, Investopedia defines Financial Health as: “A term used to describe the state of one’s personal financial situation. There are many dimensions to financial health, including the amount of savings you have, how much you are setting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses.”

You will note that “health” in this definition refers to one’s financial situation, and not to the soundness of one’s body or mind. And when I bring up financial health, in almost all contexts, this is what people think about.

But I think this definition is too narrow. I think there is a tendency to put our finances into one silo, our health into another. Yet, your personal finances and all of your financial decisions impact so many other areas of your life and we want to begin to draw attention to these intersections.

Focus on Financial Health

Health and finances are dynamic, always changing, in flux, up and down. Your personal financial situation can be unhealthy and the result of that can lead to problems in other areas of your life.

Your personal health can be poor and that can lead to significant financial issues. So we want to help people focus on “Financial Health” and examine more closely how a person, family or organization uses their finances and economic resources and ultimately how their decisions, behaviors, routines and habits impact their overall well-being.

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Financial Health & Financial Stress in Human Services

The Financial Health Institute defines “Financial Health” as:

“The dynamic relationship of one’s financial and economic resources as they are applied to or impact the state of physical, mental and social well-being.”

There is widespread evidence that a person’s financial health can impact their physical health and vice-versa. People who are struggling financially or are experiencing a downturn in their personal financial or economic situation are much less likely to visit the doctor, pay for medications, take their medications, eat healthy and even exercise. Stress can cause fatigue, headaches, insomnia and other symptoms that affect people’s ability to manage their financial situation. People who are navigating chronic diseases or serious medical conditions frequently find themselves struggling with immense debt, having to file for bankruptcy, having their credit seriously impaired, using all of their savings, eliminating discretionary income and perhaps worst of all, feeling hopeless that it will ever get better.

We define “Financial Stress” as:

“A condition that is the result of financial and/or economic events that create anxiety, worry, or a sense of scarcity, and is accompanied by a physiological stress response.”

“Chronic Financial Stress,” then, is ongoing (yet frequently intermittent) financial stress. Typically, as Financial Stress increases, a person’s state of Financial Health decreases, creating a damaging effect on physical health, as well. Chronic Financial Stress is the most typical intersection where financial and physical health mutually impact.

Why it is Important for Clients

The Stress in America Survey is commissioned each year by the American Psychological Association to measure attitudes and perceptions of stress among the general public and to identify leading sources of stress, common behaviors used to manage stress and the impact of stress on our lives. It has confirmed that there is a strong link between stress and overall health. Participants’ responses have revealed high stress levels, reliance on unhealthy behaviors to manage stress and alarming physical health consequences of stress — a combination that suggests the nation is on the verge of a stress-induced public health crisis.

The APA reports that, in 2012, Money (69%), work (65%) and the economy (61%) were the most frequently cited causes of stress for Americans. Money and work have been at the top of the list of stressors for almost every year since the APA began collecting this data. Additionally, a growing number of Americans (51%) are citing personal health and their family’s health as a source of stress. Approximately seven in 10 Americans report that they experience physical symptoms (69 percent) or non-physical symptoms (67 percent) of stress. Symptoms include irritability or anger (37 percent), fatigue (37 percent), feeling overwhelmed (35 percent) and changes in sleeping habits (30 percent). Finally, many people are not coping effectively with stress: People report lying awake (42 percent), overeating or eating unhealthy foods (36 percent) and skipping meals (27 percent) in the past month due to stress.
The impact of chronic stress on the body and mind is also well documented. Chronic stress impairs cognitive ability, memory and learning. It increases the likelihood of sleep disturbances. It increases the likelihood of maladaptive coping strategies, thereby increasing the likelihood of future and/or chronic financial stress and/or other behavior-related diseases, including Cardiovascular Disease, Adult Onset Diabetes, and Obesity.

Poor Financial Health and high Financial Stress are not concepts that are reserved for low-income populations or for people living in poverty; Financial Stress impacts up to 75% of Americans. As we will see throughout the Financial Health for Case Managers training, stress is an extremely subjective experience.

Throughout the human services field, in most instances the clients being served are struggling financially and/or economically. By definition, the bulk of the clients entering into the human services system are struggling with some part of their personal financial or economic condition. The client’s Financial Health has been impaired, either acutely or chronically, sometimes due to factors within their control and sometimes not. Frequently the client is struggling to reduce their Financial Stress and improve their Financial Health and this is how they find their way into a human service agency.

Organizations frequently tell us that their clients need to learn how to budget their money better, that clients need to understand the differences between wants and needs and to prioritize, that clients need to understand the importance of saving money and paying their bills on time. The majority of low-income clients that we have worked with over the last eight years have identified similar sentiments: they would like to budget, save, improve their credit and control their spending. However, they inevitably raise another point. They repeatedly tell us that Financial Stress is their biggest concern and they would like to be able to reduce the Financial Stress in their lives so that they can be better parents, spouses, family members and employees.

Why it is Important for Case Managers

Clients all too often look to Case Managers as their de facto personal economic experts. Yet, we have found that the majority of Case Managers have had very little training in personal finance for their own lives or for their occupation. We also know that for Case Managers there is very little available in the way of tools for or training on how to navigate a client’s financial or economic condition. And the few programs that are available offer very little insight into understanding difficult sociological and behavioral components of personal finances and economics, specifically as they relate to stress and well-being.

Due to lack of training and resources, we have heard from many Case Managers that they are uncomfortable trying to explain personal finances and economics to their clients. Frequently, when it comes to getting into the nuts and bolts of personal finances, Financial Stress and even financial trauma, whether for themselves or their clients, the Case Manager feels unprepared.

The Financial Health for Case Managers Training (FHCM) provides detailed information on the causes of Financial Stress and the subsequent physiological and behavioral responses to Financial Stress. The training looks at programmatic flaws that can inadvertently have a potentially negative impact on client performance. Finally, FHCM provides essential tools to help Case Managers better assist their clients as they navigate and potentially lessen Financial Stress in their journeys to improve their Financial Health.

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Financial Stress & Emotional Support

According to the most recent Stress in America: Paying with out Health survey, released by the American Psychological Association, for the majority of Americans (64 percent), money is a source of stress. Unlike in prior years of the survey, this year a clear gap emerged between those living with lower-income households reporting higher overall stress levels than those living in higher-income households.

The consequences of financial stress for the majority of Americans, particularly those with lower incomes, manifests itself in regards to their overall health and wellbeing. Those living in lower income households with extreme financial stress are more likely to report sedentary or unhealthy behaviors than those in lower income households with less financial stress. Nearly 1 in 5 Americans report skipping doctor’s appointments when they are in need of health care because of financial concerns and almost a third of adults report that money is a major source of conflict in their relationship.

The survey also revealed that a proven solution for lowering stress levels is emotional support from family or friends, but that nearly 43 percent of American surveyed said they had no source of emotional support. Those who reported lacking of emotional support were more stressed, more depressed/sad and less likely to make lifestyle changes because they were too stressed. To boot, significantly more Americans from lower-income households than those from higher-income households say that they do not have emotional support.

If friends and family are not providing the stress-abating emotional support that individuals need in order to break the cycle of financial stress and improve financial health, then who can? Assuming some lower income individuals interface with Human Services in some capacity, perhaps it can be inferred that case managers might be the next best thing to friends and families. However, one cannot assume that case managers are immune from financial stress and unhealthy coping methods, but they might serve their clients better and become healthier themselves with the same emotional support that all people are proven to need.

The Financial Health Institute’s Case Manager Training helps case managers learn how to align their spending, saving and health related behavior with their personal values so that they are outfitted with more tools to guide their clients.

Read more about Financial Health for Case Managers

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Introduction to Nutrition Economics

How does your diet impact your financial health?

It’s not a secret that our health care costs in the U.S. continue to rise dramatically. It’s also not a secret that people in the U.S. are struggling with nutrition/food related diseases. There is no shortage of data in regards to the costs associated with diseases that are results of poor diets, and those costs are spread out among the individual, employers, the government and society as a whole. So, as it relates to financial health, it would appear obvious that the relationship among an individual’s nutrition, overall health and personal economics are tightly enmeshed.

Yet, in our trainings and seminars, we repeatedly hear people exclaim that they “can’t afford to eat healthy,” that “eating healthy is too expensive,” or that they “don’t have time to cook.” This immediate and chronic feeling of financial, time or economic scarcity leads to eating food with little or no nutrient density, fast foods, and packaged and processed foods that are quick to prepare and cheap to produce.

Fast forward a few years and look at the medical bills, medical debt and personal bankruptcies that occur as a result (and to an extent) of the individual’s diet/health and we can see the long-term, perhaps hidden, cost of not eating healthier. That is to say, the short-term feeling of financial or economic scarcity (as we so regularly witness) outweighs the rational benefit of healthier eating, which in turn promotes long-term financial health.

The study of “Nutrition Economics” is an emerging field that is nestled inside of the field of “Health Economics.” Most of the literature we have found in regards to Nutrition Economics is aimed primarily at policy makers, thus far. However, FHI believes that it is important to bring more information about Nutrition Economics to the general population. It’s definitely worth learning more about as a means to improving personal financial health. This article or the full paper from The Nutrition Society (in the UK) is a great introduction to this worthy field.

link to full paper

Be on the lookout for more from FHI about Nutrition Economics!

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Intro to Behavioral Economics

At the Financial Health Institute, we contend on a regular basis that traditional forms of financial literacy programs, and for that matter, most programs aimed at personal finances, focus on what we call “Rational Behavior Education.” That is to say that the curriculum and teacher expects that if we are given the right information, which they will be providing, we will act in a more rational way – thereby improving our personal economic and financial condition. We will see the error of our ways and understand the benefit of acting more rationally with our financial and economic resources – and of course, make immediate changes to our behaviors.

So, in order to help people with their personal financial situation, there has been a lot of interest and money applied to the field of “Financial Literacy.” The majority of financial literacy programs that have been developed and are on the market make the following (dangerous?) assumptions.

  1. The person has a job or income.
  2. The person will want to learn how to better manage their finances with the goals of …
  3. Saving money. Saving money can be for any number of reasons, but there is definitely an emphasis on saving so that the person will want to….
  4. Invest because the person will eventually want to
  5. Retire.

Obviously, then, it is in the individual’s best interest to listen closely to the curriculum being offered and to immediately apply the concepts therein.

And this all makes great sense, unless of course the person doesn’t have a job. Or, if perhaps the person doesn’t believe they have any money to manage. Or if, perhaps the person doesn’t believe that they are capable of saving money. Or if, perhaps the person believes that they are and always will be “bad with money.” Or if, perhaps the person doesn’t trust the banking system. Or if, perhaps the person doesn’t trust people to help them with their investments. Or if, perhaps the person doesn’t believe that retirement is really something that will be available to them. Or if the person feels like they’ve tried it all and feel hopeless…or if…or if…or if…

Perhaps if we were all perfectly rational beings (i.e. Home-Economicus as described in basic economics courses), the world of traditional financial literacy would make for an effective educational strategy. We would teach people these principles and courses of action one time, they would apply them and we would then have no other financial or economic issues. Yet, having worked with people for over seven years on these topics, the one thing we can assure you is that most of the population does not behave rationally when it comes to their personal finances and economics.

As a result, the Financial Health Institute is very interested in the field of Behavioral Economics, which has looked at traditional economics and the concept of the “Economic Human” as perfectly rational and said – “we’re not sure about all of that. Most of the humans we know aren’t perfectly rational.” While Behavior Econ is mostly worked on in labs and on university campuses as of now, FHI is interested to see how it applies to the individuals and organizations we work with, and learning how we can better utilize this field of study to help our clients. If you are not familiar with Behavioral Economics and the growing research around this field, over the next couple of weeks, we would like to direct you to a couple of publications that might help you to become acquainted with this relatively new approach to understanding human behavior around finance and economics.

For this week, check out “The Behavioral Economics Guide 2014,” edited by Alain Samson. It will provide you with a great introduction to the field of Behavioral Econ along with definitions of terms, a list of books to read, scholarly journals, educational programs offering a focus on BE, and some “Applied Perspectives.” It’s a bit lengthy, so you might want to go through it a section at a time, but a very good primer for a person new to the concept. You can click here to go to the guide.

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Medical Debt and FICO9

Seldom does the average American get the opportunity to peek inside the mysterious world of credit scores. The introduction of the new FICO9 scoring model provides an opening to some valuable insights and, as always with FHI, a chance to explore the cultural and mental clockwork that drives our positive and negative credit behaviors.

Credit Scores Demystified.

Basically, creditors send regular account status reports to credit reporting agencies (Experien, Equifax, and TransUnion). FICO then applies a model that evaluates the entries to generate a score reflecting our future reliability to pay based on our past actions. FICO claims 90 percent of all U.S. consumer lending decisions use their score, including 50 of the largest credit card issuers and auto lenders and tens of thousands of other businesses. That means that their new scoring decisions or model changes affect our day-to-day ability to get affordable credit and car insurance, rent a property, or even land a job. FICO9 actually brings some changes regarding medical debt that can positively affect credit scores under the right conditions.

Less Ding for Medical Debt.

Recognizing that not all debt equally reflects a consumer’s reliability to pay, FICO made an important distinction with the new model. Rather than continue to ding scores for all collection debt, the model now discerns medical collection accounts from, say, unpaid phone bill collection accounts. Each represents about half of all consumer collection debt. Now, unpaid medical debts will weigh less on scores than before, positively affecting consumers already having delinquent medical or other negative debt more than those with otherwise positive reports.

Debt Affects More than your Credit Score.

It is important to remember that these changes are only in force as lenders upgrade to FICO9. So, meanwhile, let’s take the opportunity to understand why we get into medical (and other) debt in the first place so we can potentially regain control and avoid credit-related stress.

All debt is a gamble. That is, whenever we sign a contract to pay for services in the future, all parties are counting on our “future self” carrying out life going as planned, which often does not occur without several safety nets in place.

Unexpected expenses can occur; losses of income happen; savings can be depleted or non-existent. And pressures rise when a debt payment is missed. Each month, the gamble of whether we can keep our end of the deal, and the consequences if we cannot, put additional stress on us. So why do we do it?

Our culture tells us we need stuff now; that we deserve it; that we are broken without it. We are made to experience scarcity, which is defined as “having less than you feel that you need.” (“Scarcity: Why Having Too Little Means So Much” Mullainathan and Shafir, 2013).

We are told hundreds of times per day through ads of various sorts. And the credit industry is a huge part of the influential media we innocently experience. In the “spending moment” or “financing moment” it will serve us to breathe, walk away, and consider how we are being influenced by outside forces, consider the gamble of credit, and the related ongoing, or chronic, stress.

After all, chronic stress is proven to be directly related to major medical issues that cost us as individuals, as families, and as a society, and that result in medical debt. And so the debt cycle starts all over again. Future posts here will discuss how to address current (including medical) debt with ease and grace, addressing the typical behavioral barriers that get in our way – including what causes them.

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