The financial health check

• Description of the programme
• The study
• Key findings
• Points to consider

Description of the programme

The Financial Health Check (FHC) offers a model of one-on-one scalable support for American households who face barriers to improving their financial situations. During a one-off 30-60 minute appointment with a trained consultant, participants are helped to make concrete decisions related to increasing their savings and reducing any debt that they may have. The consultant reviews monthly budgets and future needs, and assesses how much money can be set aside for different financial goals. They then set up automated and recurring transfers that regularly move money to designated savings or debt accounts. This is followed up by emails and text alerts that encourage participants to adjust their spending and savings levels if necessary.

The sessions were developed with three principles in mind:

1. Create a moment that fits into people’s lives, with the one-off initial call minimising the burden the process places on participants.
2. Facilitate follow through in real time, with easy-to-follow guidance and concrete steps to follow.
3. Make the new behaviour regular and automated, with follow-up texts and alerts when adjustments are required.

The study

Ideas42 partnered with the Boeing Employees’ Credit Union (BECU), one of the worlds largest credit unions, to implement a pilot of the Financial Health Check with BECU members. These sessions were offered free of charge to a randomly selected group of credit union members, who opted in if they wished to participate.

Those members who were eligible for the treatment and control groups received an identical recruitment email letting them know that BECU was considering a new service that would help members plan how to achieve their financial goals. Members who indicated they were interested were directed to either:

• ‘Control eligible’: a web page asking about preferences for this service. There was no further contact with the control group after completion of this survey.
• ‘Treatment eligible’: a web page describing the opportunity to participate in a limited pilot offering the Financial Health Check. Those who opted in received the above intervention (1,291 sessions in total).

Monthly administrative data was analysed for both the control and the treatment groups, with the primary interest being in changes in their savings and changes in their credit scores. The research also looked at changes in savings transactions (frequency and amounts), changes in balances and changes in the amount of debt held.

Key findings

• The main findings showed that participants who had access to the Financial Health Check intervention had net savings transactions (deposits minus withdrawals) that were 34% higher over the course of a year than those in the group who did not have access to the intervention.
• However, it is important to note that these results are reflective of those offered the FHC, not just those who completed it. As the authors note, because session attendees may be more motivated or better positioned anyway, they didn’t feel it was possible to directly compare their behaviour to those who were not offered the FHC or did not take advantage of the sessions. Therefore, the report does not report the outcomes for attendees alone.
• In the year after contact, BECU members who were offered the Financial Health Check made 5% more savings deposits than those who expressed an interest in working on financial goals but were not offered the treatment.
• This group also deposited 12% more money into BECU savings accounts than the control group.
• The report also offered a number of ‘lessons’ learned from the process:

Expand the reach

• Explore multiple delivery channels.
• Consider offering FHC programme elements alongside other customer contact points, such as opening new accounts.
• Market the service through multiple channels.

Customise the experience

• Create customised ‘tracks’ for different financial situations, such as manging irregular income streams or prioritising debt payments.
• Match complementary interventions to these customised tracks e.g. prize-linked savings programmes.

Increase scalability

• Use digital modules to create a cost-efficient blend of online and offline components.

Test new approaches

• Measure the impact of interventions to identify best practice and be able to target investments wisely.

Points to consider

• Methodological strengths/weaknesses: Findings are tested for statistical significance, adding more robustness to the analysis.
• A control group is used, allowing findings from the treatment group to be compared with a group not receiving the same intervention for benchmarking purposes.
• As mentioned above, the outcomes for FHC attendees are not explicitly contrasted to those who did not complete the session or who were not offered the intervention.
• Generalisability/ transferability: The evaluation is of significant interest to stakeholders and policymakers looking to commission or authorise interventions designed to increase individuals’ savings, particularly in a US context.
• Relevance: While these findings are from a USA programme, many of the learning outcomes may be transferrable to a UK context.