The Affordability Monster Isn't Under the Bed. It's in the Transaction Data. 🎃
We keep hearing that Americans are struggling with affordability.
Groceries cost more.
Housing consumes more of the paycheck.
Transportation is expensive.
Insurance premiums have climbed.
Debt payments compete for increasingly scarce dollars.
And for many households, there simply isn't much left over.
Credit unions see the headlines.
They read the economic reports.
They hear the national statistics.
But here's what I think we sometimes overlook:
You don't need a national survey to tell you whether YOUR members are struggling with affordability.
Your members may already be telling you.
Not in a survey.
Not in a focus group.
Not by calling the contact center and saying, “I'm experiencing financial stress.”
They're telling you through their financial behavior.
Every single day.
Affordability Leaves Clues
Imagine a member whose paycheck has increased over the last two years.
On paper, things look pretty good.
Income is up.
The member is employed.
Their checking account is active.
Their loan payments are current.
Nothing is flashing red.
But now look at what is happening around that paycheck.
Groceries ↑
Housing ↑
Transportation ↑
Debt payments ↑
BNPL ↑
Savings ↓
Suddenly, the picture looks different.
The member may be earning more.
But they aren't necessarily getting ahead.
And that's an important distinction.
Affordability Isn't a Transaction. It's a Pattern.
A $185 grocery transaction doesn't tell us someone is struggling.
Neither does an $800 auto payment.
Or a mortgage payment.
Or a credit card payment.
Or a transfer from savings.
One transaction is simply a transaction.
But patterns begin to tell a story.
What happens when grocery spending consumes a larger share of income?
What happens when transportation payments rise while savings balances decline?
What happens when housing, auto and debt payments consume most of the paycheck before discretionary spending even begins?
What happens when BNPL payments begin appearing alongside increasing credit card obligations?
What happens when the member stops moving money into savings and starts moving money out?
Now we're no longer looking at isolated transactions.
We're looking at signals of financial affordability.
The Paycheck Isn't the Whole Story
This is why income alone isn't enough.
A member can make $75,000 a year and feel financially squeezed.
Another member can make considerably less and have greater financial capacity.
Why?
Because affordability isn't simply about how much money comes in.
It's about what happens to that money after it arrives.
Think about a paycheck landing in a member's checking account.
Before that member gets to make many choices, portions of that paycheck may already be spoken for.
Housing.
Transportation.
Insurance.
Utilities.
Debt.
Food.
Childcare.
Then comes the question that really matters:
What's left?
Enough to save?
Enough to prepare for retirement?
Enough to absorb an unexpected expense?
Enough to pay down debt?
Enough to make choices instead of constantly making trade-offs?
That remaining capacity can tell us something important about the member's financial strength.
The Grocery Bill Is a Signal
Earlier this year, I wrote about something deceptively simple:
The grocery bill.
Food spending is especially interesting because members have limited ability to opt out.
People can postpone a vacation.
They can delay buying furniture.
They can skip entertainment.
They can't stop eating.
So changes in grocery behavior can become an affordability signal.
Maybe total grocery spending increases.
Maybe members shift where they shop.
Maybe discount retailers capture a larger share of spending.
Maybe transaction frequency changes.
None of these signals independently proves financial distress.
But combined with income, savings and other obligations, they provide context.
The grocery transaction stops being merely:
$143.27 at Walmart.
It becomes part of a larger question:
How much financial capacity does this member have left after paying for the essentials of everyday life?
Transportation Tells Another Part of the Story
Now consider transportation.
Suppose transaction data shows a recurring $750 payment to an outside auto lender.
Traditional competitive-spend analysis might identify that as a refinancing opportunity.
And it may be.
But through an affordability lens, we ask another question:
What is transportation costing this member relative to their financial capacity?
Add fuel.
Insurance.
Maintenance.
Perhaps another vehicle payment in the household.
Now transportation isn't simply an auto-loan opportunity.
It's part of the member's affordability picture.
And if the credit union can refinance that $750 payment to $625?
That's not merely a loan captured.
That's $125 of monthly capacity returned to the member.
That's a very different definition of success.
Housing May Be the Biggest Signal of All
Housing works the same way.
A mortgage or rent payment by itself tells us relatively little.
But housing cost relative to income tells us more.
Combine that with savings behavior.
Debt obligations.
Delinquencies.
Changes in deposits.
Now we're beginning to understand whether the member's housing situation appears financially sustainable.
Again, the question isn't simply:
Do we have the mortgage?
It's:
Can this member afford the life they're living?
Debt Adds Another Layer
Credit cards.
Personal loans.
Student loans.
BNPL.
Outside lenders.
One payment may mean very little.
Multiple obligations competing against the same paycheck may mean much more.
Especially when they're accompanied by declining savings.
Or increasing credit utilization.
Or changes in credit health.
Or a paycheck that disappears faster every month.
This is where individual signals begin to connect.
And the picture starts becoming much more useful.
What Happens When We Put the Signals Together?
This is the opportunity I believe credit unions have.
Not to build another dashboard full of transactions.
But to begin connecting the financial signals they already possess.
Income tells us what comes in.
Transactions tell us where it goes.
Savings tells us what's left.
Debt tells us what is already obligated.
Credit tells us something about financial health and repayment behavior.
And member feedback can tell us something data alone cannot:
How financially confident does the member actually feel?
Together, those signals give us a much richer view of the member's financial life.
That's Why We Built CU Power
Credit unions have always believed they improve members' financial lives.
I believe that.
You probably believe that.
Our members may believe it too.
But increasingly, I think we need to move from:
We believe we make a difference.
to:
We can demonstrate the difference we're making.
That's the idea behind CU Power.
We're looking across seven dimensions of member financial strength:
Transportation
Housing
Emergency Savings
Debt Stress
Retirement
Credit Health
Financial Confidence
Not because any one measure perfectly defines financial well-being.
It doesn't.
But because together they begin to answer a much more important question:
Is this member financially stronger?
And importantly, much of the evidence needed to begin answering that question may already exist inside the credit union.
Start With What You Can See
You don't have to measure everything.
You don't need perfect data.
And you don't need to solve affordability for every member tomorrow.
Start with one question.
Look at the data you already have.
Maybe it's:
What percentage of members have enough liquid savings to absorb an unexpected expense?
Or:
How much of members' income appears to be consumed by housing?
Or:
What are members paying outside lenders for transportation?
Or:
Are grocery costs consuming a growing share of the paycheck?
Or even:
How quickly does the paycheck disappear after it arrives?
Each question gives you another piece of the affordability picture.
Then connect the pieces.
Because the Monster Isn't Invisible
Affordability can feel enormous.
Inflation.
Housing.
Food.
Insurance.
Transportation.
Debt.
Those are massive economic forces that no individual credit union can control.
But credit unions don't have to solve the entire affordability crisis to make a meaningful difference.
They can recognize where members are struggling.
They can identify where an intervention might create financial capacity.
They can act.
And then they can measure whether the member's financial position actually improved.
Recognize → Act → Measure.
That's where data becomes more than information.
It becomes evidence of impact.
So this October, don't worry too much about the monster under the bed.
🎃 Take a look at what's hiding in the transaction data.
Your members may already be telling you exactly where affordability is getting scary.
The question is:
Are we listening?
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