Center on Assets, Education, and Inclusion

A household’s ability to adjust to changing financial circumstances provides evidence of good financial health and demonstrates their resilience in the face of unexpected financial emergencies. To reinforce their resilience, households may use savings, credit, and insurance from financial services such as banks, credit unions, and alternative financial service (AFS) providers. The types of financial services available within the community may be associated with resilience, improving or impeding a household’s ability to save for emergencies or access credit.

This study used data on financial services, individual/household and community demographics (including smartphone use), and household financial health to test whether the geographic concentrations or densities of bank and credit union branches and AFS providers within communities were associated with households’ financial health. We explored these associations by income given that households may be exposed to varying densities of financial services within communities based on their income levels.

The findings from this study are not intended to be used for drawing clear prescriptions about building brick-and-mortar branches in communities. Instead, these findings offer preliminary understandings of whether the availability of financial services in communities relates to households’ financial health, for which households, and under what conditions.