1) The Tenuous Segment 29 Million Coping, with Little Buffer for Financial Hurdles 7 US Financial Health Segments More than half of Americans in the tenuous segment live paycheck to paycheck (53%) and struggle to keep up with bills and credit payments. Yet the majority receive regular wages and predictable income. Healthy Coping Vulnerable In many ways, individuals in the tenuous segment resemble those in the striving Thriving Focused Stable Striving Tenuous Unengaged At Risk segment, though they differ significantly in their planning and saving behaviors, and they have less financial confidence. People who fall into this segment span all income levels and represent diverse demographics. Who Are They? 12% of12% of 12% AdultsAdults Adults Age Age American of American American Are Financially Tenuous Are Financially Tenuous Are Financially Tenuous Age 65+ 65+ 50-64 50-64 50-64 36-49 36-49 36-49 26-35 26-35 26-35 18-25 12% 18-25 18-25 Race/Ethnicity 65+ 12% Gender Gender Gender 12% 49% 49% 49% 51% 51% 51% 12% 28% 28% 25% 25% 23% 12% 23% Male MaleFemale Female Male 28% 25% 23% 12% Household Income 62% 15% 13% White, Non-Hispanic Hispanic Black, Non-Hispanic 9% 35% have children 17% $60,000 - 99,999 27% $30,000 - 59,999 28% Less than $30,000 2% Other, Non-Hispanic $100,000 or more Female 28% 2+Races, Non-Hispanic Total US Population Age 65+ 29% 36-49 18-25 23% 17% 13% Race Male 18% 50-64 26-35 Household Income Gender 50% $100,000 or more Female 50% $60,000 - 99,999 26% Hispanic $30,000 - 59,999 27% Black, Non-Hispanic Less than $ 30,000 25% 22% White, Non-Hispanic Other, Non-Hispanic 2+ Races, Non-Hispanic 68% 14% 11% 6% 1% 

2) What Behaviors Does This Segment Exhibit? Planning None of the financially tenuous plan for large, irregular expenses. » 37% use a budget or monthly spending plan. ? »  0% could only make ends meet for three months 5 or less in the event of a sudden drop in income. Saving One third do not save. »  ne in five have a regular saving habit, 46% save O whatever money is left over at the end of the month, and 33% do not save. »  9% have less than $5,000 in non-retirement 5 savings, and 53% have less than $10,000 in retirement savings. Attitudes þ 53% say “I always find myself living paycheck  to paycheck.” þ 41% say their finances cause them significant stress.  þ 36% are confident they can meet their short-term  savings goals. þ 33% are confident they can meet their long-term  goals for becoming financially secure. þ 45% believe they have the skills and knowledge to  manage their finances well. þ 51% are only slightly or not at all confident they could  come up with $2,000 in a month in an emergency. þ 52% expect their financial situation to be better in five  Debt Many have debt loads that may be difficult to manage. $ »  4% have student loan debt, 25% have medical 4 debt, and 84% have other non-mortgage debt. »  t least 41% have an unhealthy amount of debt A compared to income.* years than it is today. “ always find myself living paycheck I to paycheck,” more than half of tenuous Americans say. What Products Are They Using? »  0% have a checking account, 74% have a savings account, 9 and 76% have a credit card. 59% have all three. Individuals in this segment tend to leverage financial services using a variety of channels, including ATM, phone, online, and mobile. They use a variety of locations to cash checks to receive immediate access to funds, including bank branches, check cashers (also known as currency exchanges), retail locations, mobile apps, employers, and friends and family. »  3% have a prepaid card, and 5% have a payroll card. 1 64% use online banking and 42% use mobile financial services regularly. »  4% check their checking account balance at least once a week. 6 »  4% use online banking and 42% use mobile financial 6 services regularly.** »  5% use debit cards always or often to make purchases. 6 »  8% use online bill pay always or often, and 30% use automatic 5 bill pay always or often. »  n the past year, 19% of these consumers borrowed money from I friends and family, 15% took out a loan to buy a vehicle, 9% used a line of credit, and 7% used a home equity loan or line of credit. »  0% are always on the lookout for new financial services products 1 or providers. * An ‘unhealthy amount of debt’ is defined as having a financial obligation ratio of 40% or more. The ratio could not be calculated for 17% of this segment because respondents answered “don’t know” to one or more of the questions that provided data for the ratio. ** Mobile financial services includes mobile banking, receiving an SMS alert from a financial services provider, and using mobile remote deposit capture. Regular use = in the last 30 days. 

3) How to Reach 29 Million Financially Tenuous Americans The tenuous segment has regular income streams, they use technology more than the average consumer, and they are optimistic about the long term. Providers have an opportunity to serve this segment by further exploring their financial pain points and testing innovative solutions to uncover: »  hat are the most effective strategies to help this segment plan W ahead? More than half (57%) say they would plan ahead if they could. What is preventing them from planning, and what tools and motivators can help them reap the benefits of thinking and planning ahead financially? »  an well-designed, targeted products and services boost the C financial confidence of this segment? Does increased financial confidence reduce stress and/or drive positive outcomes across multiple aspects of consumers’ financial lives? »  hat tools, features, and incentives are most effective at W helping this segment establish and maintain saving habits? Does gamification engage them? Do encouraging texts and alerts motivate them to continue? Read More and Engage To engage with the dialogue, follow us or use #finhealth. @cfsinnovation LinkedIn Facebook Support for this Brief MetLife Foundation is a major sponsor of CFSI’s ongoing consumer financial health work, including these segment briefs. About the Consumer Financial Health Study The Consumer Financial Health Study benefited from guidance and generous financial support from Ford Foundation and MetLife Foundation. The Consumer Financial Health Study also benefited from generous financial support from American Express. The Center for Financial Services Innovation launched its Consumer Financial Health Study to better understand the current state of financial health in America and consumer challenges. For more on the study – including details on the survey instrument, methodology, financial health indicators, and financial health segmentation – download the segmentation whitepaper: http://bit.ly/ConsumerFinHealth Copyright 2015 Center for Financial Services Innovation ALL RIGHTS RESERVED