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Conversations on Progress
Earlier this year, the Center for Financial Services Innovation (CFSI) released Understanding and Improving Consumer Financial Health in America, examining the financial health of Americans, by looking at consumer behaviors, attitudes, preferences, and product usage. According to the study, financial health is attained by consumers when their day-to-day financial system functions well and increases the likelihood of financial resilience and opportunity. The concept of financial health reflects new thinking around the outcomes of financial capability efforts. So while financial literacy refers to what a consumer knows, and financial capability is about consumer behaviors, financial health refers to what consumers hope to achieve. Similar to how exercise and a proper diet can improve a person’s physical health, CFSI describes how financial capability is a set of behaviors – such as budgeting, saving for the future, selecting the right type of financial products – that can improve consumers’ financial health.