CFPB - Financial Well Being User Guide Scale

Measuring financial
well-being
A guide to using the CFPB Financial Well-Being Scale
December 2015
Table of contents
Table of contents......................................................................................................... 2
1. Introduction ........................................................................................................... 4
2. Background ........................................................................................................... 6
2.1 What financial well-being is ..................................................................... 6
3. The CFPB Financial Well-Being Scale ............................................................... 8

3.1 About the scale .......................................................................................... 8
3.2 The questions that make up the scale ...................................................... 9
3.3 Using the scale ........................................................................................ 10
4. Producing a score .............................................................................................. 12

4.1 Scoring overview ..................................................................................... 12
4.2 The scoring process ................................................................................ 12
4.3 Differences in scoring tables .................................................................. 14
4.4 Interpreting the score ............................................................................. 14
4.5 Frequently asked questions .................................................................... 14
4.6 Notes for researchers ............................................................................... 17
5. Scoring examples ............................................................................................... 18

Example 1: Under 62, self-administered...................................................... 19
Example 2: Age 62 and older, administered by someone else..................... 22
2 MEASURING FINANCIAL WELL-BEING: A GUIDE TO USING THE CFPB FINANCIAL WELL-BEING SCALE
Appendix A: The CFPB Financial Well-Being Scale questionnaire
and scoring worksheet....................................................................................... 25
Standard version questionnaire ...................................................................... 26
Standard version scoring worksheet ............................................................... 27
Abbreviated version questionnaire ................................................................. 29
Abbreviated version scoring worksheet .......................................................... 30
1. Introduction
Every day thousands of financial professionals, including counselors, educators, coaches,
planners and others, help consumers navigate financial challenges and opportunities through a
diverse array of approaches and programs. There is a growing consensus that the ultimate and
common goal of these efforts is to improve the financial well-being of the people served.1 Yet
financial well-being has lacked a standardized definition or form of measurement.
In order to provide practitioners and researchers with a standard, reliable, and broadly available
way to measure individual financial well-being, the CFPB led a rigorous research effort to
develop a consumer-driven definition of financial well-being, and then tested a set of questions–
a “scale”–to measure financial well-being. The scale is designed to allow practitioners and
researchers to accurately and consistently quantify, and therefore observe, something that is not
directly observable–the extent to which someone’s financial situation and the financial
capability that they have developed provide them with security and freedom of choice.
This guide describes the research behind the CFPB Financial Well-Being Scale and provides
detailed steps for using it, including how to score individuals’ responses and compare their
scores.
The CFPB Financial Well-Being Scale is:
 A consumer-driven measure based on a definition of financial well-being that draws on

insights from both consumers and experts.
1 For additional background on financial well-being in policy and research see “Financial Well-Being: The Goal of
Financial Education” available at http://www.consumerfinance.gov/reports/financial-well-being/.
 A measurement tool developed using state-of-the-art techniques, including cognitive
interviewing and testing to ensure accurate comprehension of questions. The scale is a
highly reliable and valid measure of the financial well-being construct based on multiple
waves of quantitative testing.
 A common metric that allows an “apples-to-apples” comparison of scores across

consumers. It can also be used to assess a consumer’s current state of financial well-
being, to track their progress over time, and to understand how other factors, including
program interventions, affect financial well-being.
 A free and publicly available survey instrument and measurement scale.
2. Background
2.1 What financial well-being is
Until recent work by the CFPB, financial well-being had not been explicitly defined from the
consumer perspective. To support practitioners and scholars in the field, the CFPB set out to
create a standard, comprehensive definition of financial well-being for all adults, 2 one that is
relevant across a range of different circumstances. 3
The CFPB’s research team4 started by listening to Understanding financial well-

people across the United States talk about what being is crucial to helping
financial well-being means to them. We found that consumers achieve it.
consumers perceived 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. Combined with a review of research and consultation with
leading experts, the CFPB found that financial well-being includes the following elements:
2 “Adult” refers to those ages 18 and older.
3 For more information on the CFPB’s definition of financial well-being, how it was created, and what may influence
it, see “Financial Well-Being: The Goal of Financial Education” available at
http://www.consumerfinance.gov/reports/financial-well-being/.
4 The research team responsible for conducting the research and analysis to develop this definition of financial well-
being, as well as to develop the scale to measure financial well-being, included Bureau staff as well as a team of
research contractors led by the Corporation for Enterprise Development (CFED), including the University of
Wisconsin-Madison Center for Financial Security, the Urban Institute, ICF International, and Vector Psychometrics.
 Having control over one’s finances in terms of being able to pay bills on time, not
having unmanageable debt, and being able to make ends meet.
 Having a financial “cushion” against unexpected expenses and emergencies. Having

savings, health insurance, and good credit, and being able to rely on friends and family
for financial assistance were factors that increase consumers’ capacity to absorb a
financial shock.
 Having financial goals—such as paying off one’s student loans within a certain number of
years or saving a particular amount towards one’s retirement—and being on track to
meet those financial goals also made people feel like they were in good shape
financially.
 Being able to make choices that allow one to enjoy life—such as taking a vacation,
enjoying a meal out now and then, going back to school to pursue an advanced degree, or
working less to spend more time with family—was also deemed an essential ingredient in
financial well-being.
Another way to think about this is that financial well-being implies having financial security
and financial freedom of choice, in the present and in the future.
FIGURE 1: THE FOUR ELEMENTS OF FINANCIAL WELL-BEING
3. The CFPB Financial
Well-Being Scale
3.1 About the scale
After developing a consumer-driven definition of financial well-being and its main components,
our research team next engaged in the complex task of converting that definition into a concrete
measurement tool that practitioners and researchers can use in their work. With the support of a
number of experts using state-of-the-art
methods, we developed a 10-item5 scale and What is a scale? A scale is an
conducted extensive testing and validation of the instrument used to measure something,
scale to ensure its quality and reliability.6 such as an attitude or ability. By
definition, scales are always made up of
Our scale incorporates consumers’ perceptions of multiple questions or “items.” A good
financial well-being to deliver a single financial scale provides consistent results every
well-being score that captures the four elements time it is used; assuming that what is
of financial well-being. The scale is constructed being measured does not change, and
reliably measures the concept it is
so that it is possible to compare different people’s
supposed to be measuring.
scores directly, or to see how an individual’s
financial well-being changes over time.
5 The standard version of the scale contains 10 questions. We have also developed a 5-item version that covers the
same issues in a more succinct manner, but trades off some sensitivity in measurement.
6 The statistical analysis used to develop the scale and scoring procedures was conducted by Vector Psychometrics
using Item Response Theory methods.
3.2 The questions that make up the scale
The CFPB Financial Well-Being Scale contains 10 questions (Table 1).7 These questions were
selected through a state-of-the-art process that involved:
 A series of cognitive interviews to ensure that people understand the questions and
what they are designed to ask.
 Factor analysis to select the questions that best measured the underlying concept of
interest.
 Three rounds of psychometric testing with over fifteen thousand respondents in

order to select the questions that provided the greatest reliability across adults. 8
TABLE 1: FINANCIAL WELL-BEING SCALE
Questions Response Options
How well does this statement describe you or your situation?

1. I could handle a major unexpected expense  Completely
2. I am securing my financial future  Very well
3. Because of my money situation, I feel like I will never have the  Somewhat
things I want in life*
 Very little
4. I can enjoy life because of the way I’m managing my money
 Not at all
5. I am just getting by financially*
6. I am concerned that the money I have or will save won’t last*
How often does this statement apply to you?  Always

7. Giving a gift for a wedding, birthday or other occasion would put a  Often
strain on my finances for the month*  Sometimes
8. I have money left over at the end of the month  Rarely
9. I am behind with my finances*  Never
10. My finances control my life*
* Denotes questions for which the response options are “reverse coded”
7 For an abbreviated 5-item version of the scale, see Appendix A at the end of this user guide.
8 For a more detailed description of how this scale was developed, see the forthcoming full methodology report.
3.3 Using the scale
The CFPB Financial Well-Being Scale was designed to allow practitioners and researchers to
accurately and consistently quantify, and therefore observe, something that the respondent
already has a sense of–the extent to which their financial situation and the financial capability
that they have developed provide them with security and freedom of choice. The purpose of the
score is to help practitioners or researchers quantify and compare the score across time or
across individuals, or to study the relationship between financial well-being and other factors.
The score produced will not be meaningful to the respondent in isolation.
The CFPB Financial Well-Being Scale can be used in a variety of ways, including:
 Initial assessment: The scale can be used to assess a person’s financial well-being at
intake. In addition, reviewing individual questions that make up the scale with a person
that you serve could also help guide a conversation about their financial situation, both
strengths and needs, in terms that resonate with and motivate consumers.
 Tracking individual progress: The scale can be used to track changes in an

individual’s financial well-being over time. While not providing the same quantifiable
measure of progress as a financial well-being score, changes in answers to individual
items may provide additional, more nuanced insights into how individuals are
experiencing their financial situation over time. Such changes may highlight an
individual’s progress in taking more control over money management, or building
stronger protections against financial shocks.
 Assessing program outcomes: The CFPB Financial Well-Being Scale provides a tool
to measure the extent to which programs are improving the financial well-being of the
individuals that they serve. The scale could be used as part of reports on the effectiveness
of programs and services, such as financial education and capability programs. It can
also be used to compare different populations in one program—for example, how a
particular intervention differentially affects different people—or to compare changes in
financial well-being across programs.
 Financial well-being survey research: The scale can be used in survey research to
analyze the relationship between financial well-being and other factors.
There are many different approaches to helping consumers navigate the variety of financial
challenges and opportunities they may face at different points in their lives. And, there are
many valid ways to measure the outcomes of specific programs and interventions.
The CFPB Financial Well-Being Scale was created to supplement program performance
measurement tools and data collection procedures that programs already have in place to
identify, track, and measure an individual’s progress. While our scale development process
shows that the CFPB Financial Well-Being Scale scores are strongly correlated with a number of
objective financial indicators such as credit scores and experiences with financial emergencies or
material hardship, the scale is not a substitute for these indicators, or other direct measures of
an individual’s intermediate outcomes relevant to a given program’s specific goals like improved
money management habits or debt reduction, or for existing reporting requirements from
funders.
The CFPB Financial Well-Being Scale adds the following to existing measures of program
performance:
 A holistic outcome metric that reflects success in consumers’ own terms and allows for
variation in individual preferences and goals.
 A rigorous and simple way to measure important but traditionally hard to quantify
success factors like feelings of empowerment, confidence and satisfaction.
 A measure that can be used as a common metric across very different types of financial
capability programs and interventions.
4. Producing a score
4.1 Scoring overview
The score used for the CFPB Financial Well-Being Scale is based on an Item Response Theory
(IRT) analysis. IRT is a statistical method that provides a more precise measure than a simple
summary score. IRT gives us more precise individual estimates because it allows different items
in a scale, and people’s responses to these items, to contribute differently to the final score.9
IRT analysis underlies the scoring model used in standardized tests such as the SAT. Typically
IRT methods use a formula embedded in statistical software to estimate values for each answer
a respondent provides to a scale item. However, the CFPB Financial Well-Being Scale is
accessible to practitioners and others who may not have access to this specialized software. In
practical terms, practitioners who do not use IRT software can use a “lookup” table, provided in
the scoring worksheet in Appendix A at the end of this user guide, to score responses to the
CFPB Financial Well-Being Scale. This will involve the two-step scoring process outlined below.
4.2 The scoring process

Once you have a respondent’s completed questionnaire, determining their Financial Well-Being
Scale score is a two-step process:
9 In other words, if two people both achieved a total response value of 24, but did so by responding differently to
various items, they might in fact have different levels of financial well-being.
Step 1 Determine the total response value (or raw total): Using the scoring
worksheet, enter into the right-hand column the number from 0 to 4 that
corresponds to each of the person’s responses, and add them up to find the sum
total. This is the “total response value” you will use in Step 2.
Step 2 Convert the total response value to a CFPB Financial Well-Being Scale
score: On the second page of the scoring worksheet, locate the total response
value from Step 1 in the first column, then follow the row across to the appropriate
column based on the respondent’s age group and whether or not the respondent
read the questionnaire to themselves (“self-administered”), or had the questions
read to them by someone else (“administered by someone else”). This will give you
the respondent’s CFPB Financial Well-Being Scale score.10
The scoring worksheet is available in Appendix A at the end of this guide. For more detailed
instructions about the two-step scoring process, including step-by-step examples showing how
to score different age groups and survey modes, see Section 5: Scoring Examples.
It is important to note that a questionnaire can only be scored using the scoring worksheet if the
respondent provided an answer to all questions in the scale. Any responses such as “don’t know”
or skipped questions make the use of the look-up table inaccurate.11
Looking for a shorter scale?

The standard 10-item version of the CFPB Financial Well-Being Scale provides a higher level of
precision and reliability of estimates, and is therefore better able to detect changes in a person’s
financial well-being over time. Most practitioners will want to use this standard version of the scale.
However, if the standard scale is not an option due to space or time, you may use the abbreviated 5-
item version of the CFPB Financial Well-Being Scale questionnaire. The scores from the
abbreviated scale can be compared directly to the scores from the standard version. Regardless of
respondent’s age or mode, using the appropriate column in step 2 of the scoring worksheet for the
scale you are using (either standard or abbreviated) produces a comparable CFPB Financial Well-
Being Scale score.
10 Information on why the scoring is different for different age groups and modes is provided in the “Frequently
Asked Questions” section of this user guide.
11 Questionnaires with missing and “don’t know” responses can still be scored using specialized IRT software.
4.3 Differences in scoring tables
The scale is constructed so that the same questions and response options can be used with all
respondents. The only difference is which column you will use in Step 2 of the scoring
worksheet to locate the actual CFPB Financial Well-Being Scale score:
 Age group: The scoring conversion tables are divided into two age groups: adults age 18
to 61, and adults age 62 and older.
 Mode: The scoring tables for the two age groups are further divided on whether the
scale was self-administered or administered by someone else.
4.4 Interpreting the score

4.4.1 What the score means
A CFPB Financial Well-Being Scale score is a standardized number between 0 and 100 that
represents the respondent’s underlying level of financial well-being. The number does not have
meaning on its own, and most people’s scores will fall somewhere in the middle—extremely low
or extremely high scores will be uncommon.
4.5 Frequently asked questions

Why is the scoring different for different age groups?
We wanted to create a financial well-being scale that could be used by both working age and
older adults, including those in retirement. Based on our research and testing, we determined
that consumers did answer the CFPB Financial Well-Being Scale questions slightly differently
depending on their age group (i.e. “working age adults” under 62 and “older consumers” 62+).
Note that in practice the underlying differences by age are reflected by a gradual shift from
working and accumulating savings to exiting the workforce and decumulating savings.12
However, the scale uses age 62 as the point that separates these populations. Step 2 of the
scoring worksheet takes these age-related differences into account, and converts the raw total to
a “normalized” financial well-being score that is then directly comparable across age groups.
Why is the scoring different for different modes?

Survey researchers know that sometimes respondents answer survey questions a little
differently depending on how a questionnaire is administered—for instance, whether it is self-
administered or administered by someone else. Based on our research and testing, we
determined that consumers did answer the questions on the CFPB Financial Well-Being Scale
slightly differently depending on whether they were administered the questions via phone, or
they self-administered the scale using a computer. Step 2 of the scoring worksheet takes these
mode-related differences into account, and converts the raw total to a “normalized” financial
well-being score that is then directly comparable across the modes.
Can I score a questionnaire if the person doesn’t respond to all the items?
No. For the scoring methods outlined in this user guide, it is necessary for respondents to
provide an answer to every item in the questionnaire. It is not possible to accurately score
individuals who do not respond to all the items with the two-step process, as skipping items
reduces the overall number of items being measured. (For instance, an individual who answered
all of the questions and has a total response value of 30 out of 40 likely does not have the same
financial well-being as an individual who skipped two of the items and therefore has a total
response value of 30 out of 32.) However, researchers who are able to use IRT software for
scoring instead of the assessment scoring worksheet can estimate scores that account for
missing responses.
12 For more information on differences in perspectives on financial well-being between working age and older
consumers see “Financial Well-Being: The Goal of Financial Education” available at
http://www.consumerfinance.gov/reports/financial-well-being/.
Can I make changes to the questionnaire?
If you make changes to the wording of question items or responses, you will not be able to
accurately estimate a respondent’s CFPB Financial Well-Being Scale score. For the scoring
methods outlined in this user guide, it is necessary for respondents to answer to every item in
the questionnaire using the exact item wording as presented. If the standard version of the
questionnaire is too long, or if you wish to leave out individual items, the abbreviated 5-item
version of the Financial Well-Being Scale is an alternative option, but again it should be used
exactly as worded in this guide.
What is a good (or bad) score?

A higher score indicates a higher level of measured financial well-being, but there is not a
specific cut-off for a “good” or “bad” financial well-being score. Unlike credit scores, for
example, which are often discussed as a series of ranges (such as 600-650, 650-700, and so on),
the CFPB Financial Well-Being Scale scores have not been around long enough for research to
have established meaningful ranges for different “levels” of scores. However, as you use the scale
with the individuals that you serve in your programs, you may be able to establish benchmarks,
as well as analyze their financial well-being scores in relation to other data you may have on
their financial situation.
It is also important to note that small changes in scores due to answering a few questions
slightly differently may result in movements up or down the scale that do not necessarily
indicate a meaningful change in underlying financial well-being. Each estimated value on the
CFPB Financial Well-Being Scale is measured with some error, so small changes in a person’s
score should be interpreted carefully.
Do I need permission to use this scale?

No. This scale and scoring procedure is free and publicly available.
4.6 Notes for researchers
Abbreviated scale
The research team created both a standard (10-item) and abbreviated (5-item) version of the
scale. The 5-item scale can easily be added to longer surveys and it still provides reliable and
adequate coverage of the four elements of financial well-being. The correlation between the
scores for the 10 -item and 5-item versions is high. However, unless time and effort constraints
are a significant concern, we believe the standard version will be preferable in most cases due to
its higher reliability, precision, and resulting sensitivity to change over time.
IRT model parameters

The CFPB Financial Well-Being Scale scores provided in the scoring worksheet were generated
using the software system flexMIRT®. The technical documentation needed to score the scale
using IRT software, including necessary item and group parameters, are detailed in a
forthcoming technical report on the development of the scale.
5. Scoring examples
This section contains easy-to-follow examples of how to complete the scoring process.
Notes on the scoring process:
 Once you have the respondent’s completed questionnaire, the first step of the scoring
process is to find a respondent’s total response value (or raw total).
 The second step of the scoring process, converting the total response value to the CFPB
Financial Well-Being Scale score, varies slightly depending on the age group and data
collection mode of the respondent.
Two examples show how to complete the scoring process for various combinations of factors:
Example 1. Under age 62, self- administered
Example 2. Age 62 and older, administered by someone else
Example 1: Under 62, self-administered
Step 1
Determine the respondent’s total response value: With the completed questionnaire in
hand, record the numerical value of each response and sum up the total value of his or her
responses across all the items in the scale. In the example below, this gives you a total
response value of 12, which we’ll use in the next step.
Step 2
Convert the total response value to a CFPB Financial Well-Being Scale score: Find
the total response value (12) in the left-hand column. Follow the row containing that score
across to the first mode column (“self-administered”), then to the appropriate age column (“18-
61”) to find this respondent’s Financial Well-Being Score (40).
Example 2: Age 62 and older, administered
by someone else
Step 1
Determine the respondent’s total response value: With the completed questionnaire in
hand, record the numerical value of each response and sum up the total value of his or her
responses across all the items in the scale. In the example below, this gives you a total
response value of 36, which we’ll use in the next step.
Step 2
Convert the total response value to a Financial Well-Being Scale score: Find the total
response value (36) in the left-hand column. Follow the row containing that score across to the
second mode column (“administered by someone else”), then to the appropriate age column
(“62+”) to find this respondent’s Financial Well-Being Score (72).
Appendix A: The CFPB Financial Well-Being Scale
questionnaire and scoring worksheet
This appendix contains both the standard version and the abbreviated version of the CFPB
Financial Well-Being Scale questionnaire and scoring worksheet, which are also available at
consumerfinance.gov/financial-well-being.
Standard version questionnaire
Standard version scoring worksheet
Abbreviated version questionnaire
Abbreviated version scoring worksheet

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Measuring financial

3. The CFPB Financial Well-Being Scale ............................................................... 8

4. Producing a score .............................................................................................. 12

5. Scoring examples ............................................................................................... 18

The CFPB Financial Well-Being Scale is:

 A consumer-driven measure based on a definition of financial well-being that draws on

 A common metric that allows an “apples-to-apples” comparison of scores across

 A free and publicly available survey instrument and measurement scale.

The CFPB’s research team4 started by listening to Understanding financial well-

2 “Adult” refers to those ages 18 and older.

 Having a financial “cushion” against unexpected expenses and emergencies. Having

FIGURE 1: THE FOUR ELEMENTS OF FINANCIAL WELL-BEING

 Three rounds of psychometric testing with over fifteen thousand respondents in

TABLE 1: FINANCIAL WELL-BEING SCALE

Questions Response Options

How well does this statement describe you or your situation?

How often does this statement apply to you?  Always

 Tracking individual progress: The scale can be used to track changes in an

4.2 The scoring process

Looking for a shorter scale?

4.4 Interpreting the score

4.5 Frequently asked questions

Why is the scoring different for different modes?

What is a good (or bad) score?

Do I need permission to use this scale?

IRT model parameters

Notes on the scoring process:

Example 1. Under age 62, self- administered

Example 2. Age 62 and older, administered by someone else

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