CHICAGO (8/27/15)--More than half of those in “The Tenuous Segment,” the third of the four types of financially struggling consumers--as profiled by the Center for Financial Services Innovation (CFSI)--live paycheck to paycheck.
While these roughly 29 million Americans may earn typical salaries and have reliable sources of income, what holds them back is their inability to plan and their limited financial knowledge and confidence, the CFSI found. This is where credit unions and other financial institutions can come into play.
This week, News Now is covering the four types of American consumers who struggle financially, as described by the CFSI. The segments include “The Financially At Risk,”“The Financially Unengaged,”“The Financially Tenuous” and “The Financially Striving.”
Nearly half of this segment says their financial situations cause them significant stress, nearly none plan for large irregular expenses, and only 37% put together a monthly spending plan, according to the report.
Additionally, one-third of this population fails to put money into savings on a regular basis, and a huge percentage have debt loads that may be difficult to manage.
Fortunately, the CFSI said, individuals in this segment tend to use a variety of financial services channels, including ATMs and online and mobile banking. By the numbers:
The tenuous segment uses “technology more than the average consumer, and they are optimistic about the long term,” the CFSI said.
With that in mind, for financial institutions to best serve this population, the report suggests considering reaching out with budgeting products that will help them plan ahead for large or unexpected expenses.
The report also reminds financial institutions not to forget to promote the power of saving.
“What tools, features, and incentives are most effective at helping this segment establish and maintain saving habits?” the CFSI posed. “Does gamification engage them? Do encouraging texts and alerts motivate them to continue?”