Perhaps the most disheartening measure of Americans’ deteriorating financial security is an analysis which concluded that the American dream—defined by factors that generally correspond to middle class benchmarks like owning a car and a home—requires an annual income of $130,000 for a family of four. In 2018, the median family income was roughly half that figure.6,7 This begs the question: is widespread financial insecurity robbing people of their chance to achieve the American dream?
The Connection Between Financial and Physical Health “Wellbeing” is a fitting term because it accurately suggests a connection between financial and physical health, a link that research strongly supports. A survey by the American Psychological Association found that money is people’s number 1 stressor.
This is a crisis of “financial wellbeing,” a comprehensive term to meet a complex problem. For the purposes of this Challenge we use financial wellbeing as a holistic term to describe someone’s overall financial health. The Consumer Financial Protection Bureau offers a helpful definition:
72% of adults reported feeling stressed about money at least some of the time, and a quarter rated their stress as extreme.12 Couple this anxiety with the fact that financial issues sometimes cause individuals to miss medical appointments or forgo treatments and prescriptions and it becomes clear that financial insecurity is actually making people sick.
Financial wellbeing is 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.8
It is important to note that, as unsettling as the state of financial wellbeing may appear, when the data is disaggregated by race, the reality is even more distressing. In fact, some analysts claim the long-standing wealth disparity between white and minority groups is widening; African-American and Hispanic families’ median net worth was less than 15% of white families in 2017.9 The homeownership rate for African-American and Hispanics is half that of their white counterparts and they are twice as likely to resort to predatory payday lending.10,11 For this reason, the Unlocking ₵hange Challenge intentionally targeted innovations making an impact in underrepresented communities and programs managed by innovators who look like the communities they seek to serve.
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