Your Members Got a Raise. So Why Aren’t They Getting Ahead?
- Anne Legg
- 2 days ago
- 5 min read
Getting a raise is supposed to mean you're getting ahead.
More income. More breathing room. More ability to save. More financial confidence.
But for millions of Americans, that's not necessarily what is happening.
According to the Federal Reserve's 2025 Survey of Household Economics and Decisionmaking, 32% of adults said their family's monthly income increased in 2025.
Sounds encouraging.
Except 35% said their monthly spending increased.
Once again, more Americans reported an increase in spending than an increase in income.
And 58% of adults said price changes over the previous year had made their financial situation worse.
So here's a question credit unions should be asking:
If your members are earning more, are they actually getting ahead?
Income isn't the same as financial capacity
Credit unions have traditionally paid a lot of attention to income.
It helps us make lending decisions. We use it to assess repayment capacity. Direct deposit can help us identify primary financial institution relationships.
But income by itself tells us surprisingly little about a member's financial progress.
Imagine a member whose identifiable monthly income increases from:
$5,000 → $5,200
That's a 4% raise.
Now imagine their essential monthly expenses increase from:
$3,800 → $4,100
That's nearly an 8% increase.
The member is making more money.
But they have less money left over.
Their paycheck increased by $200.
Their essential expenses increased by $300.
That member got a raise.
They didn't get ahead.
And that's the distinction credit unions need to start seeing.
Affordability changes the equation
This is especially important in today's affordability environment.
McKinsey's recent research into Americans' economic mobility found that 60% of respondents identified the rising cost of living as one of the top three barriers preventing them from getting ahead.
And among those concerned about rising costs, 88% identified groceries and food as a top concern.
Housing, transportation, utilities and healthcare followed.
Those aren't discretionary luxuries.
They're the expenses of everyday life.
Which means a member can do everything we're taught represents financial progress — work hard, increase their income, maintain employment — and still find themselves losing financial ground.
That raises an important question:
Can your credit union see that happening?
Your data may already contain the answer
For credit unions that can access the appropriate checking, ACH and transaction data, there may be an opportunity to look beyond income and begin measuring something more meaningful:
Financial capacity.
Start with money coming in.
Then examine what is going out.
Not whether a member spent $142 at a grocery store last week.
Instead, ask how essential expenses are changing relative to income.
Look at categories such as:
Groceries and food
Housing
Transportation
Utilities
Healthcare
Debt payments
Then begin looking at what remains.
That remaining capacity may tell us far more about a member's financial health than their paycheck alone.
The signals become even more powerful when we connect them
This is where member intelligence gets interesting.
A rising expense-to-income ratio is one signal.
Now combine it with other behaviors.
Are savings transfers declining?
Are average deposit balances falling?
Is revolving credit usage increasing?
Is the member reaching increasingly low balances before the next paycheck arrives?
Are deposits arriving and being consumed almost immediately by household expenses?
One of those behaviors alone may mean very little.
Together, they can begin to tell a story.
The member may be earning more.
But their financial resilience may be deteriorating.
That's a very different definition of "knowing your member"
Most credit unions know a tremendous amount about their members.
We know their age.
Their credit score.
Their loan balance.
Their products.
Their tenure.
Their transaction history.
But member intelligence asks a different question:
Do we understand what is happening in their financial life?
That's an important distinction.
A member with direct deposit, a strong credit score and several products could still be living paycheck to paycheck.
A member receiving regular salary increases could still be losing purchasing power.
A long-tenured member could have less emergency savings today than they had two years ago.
Traditional measures may tell us that they're a valuable member.
Member intelligence can help tell us whether we're creating value for them.
This is where CU Power comes in
CU Power is based on a simple idea:
Credit unions shouldn't just say they're improving members' financial lives. They should be able to measure it.
That means moving beyond product activity and beginning to understand financial outcomes.
Did emergency savings improve?
Did debt stress decline?
Did credit health improve?
Did transportation or housing become more stable?
Did the member build greater financial resilience?
And ultimately:
Is the member becoming more financially confident?
Income matters.
But income is only one part of that story.
The more important question is what the member is able to do with it.
Imagine measuring progress instead of just activity
Consider two members.
Both receive a 5% raise.
For Member A, essential expenses remain relatively stable. Savings contributions increase. Revolving debt declines. Emergency savings grows.
For Member B, grocery, housing and transportation costs rise faster than income. Savings contributions disappear. Credit card balances increase. Account balances regularly approach zero before payday.
Same raise.
Two completely different financial outcomes.
Traditional reporting might celebrate the income growth.
CU Power asks:
Which member is actually getting ahead?
And then comes the most important question:
What can the credit union do about it?
Maybe Member B could benefit from refinancing higher-cost debt.
Maybe there's an opportunity to help establish emergency savings.
Maybe the member needs a different product, financial coaching or simply some additional breathing room.
The goal isn't to predict what the member will buy next.
It's to recognize when their financial circumstances are changing and determine whether the credit union has an opportunity to help.
A raise should create progress. Let's measure whether it does.
The Federal Reserve can tell us that, nationally, spending increases are continuing to outpace income increases for many households.
But a credit union may be able to answer a much more important question:
Is it happening to our members?
And then:
What are we doing about it?
That's the opportunity.
Move from income to financial capacity.
From transactions to signals.
From signals to action.
And from saying we improve members' financial lives to being able to prove that we do.
That's CU Power.
Sources: Federal Reserve Board, 2025 Survey of Household Economics and Decisionmaking, released May 2026; McKinsey Institute for Economic Mobility, “In Pursuit of Progress: Americans' Aspirations for Economic Mobility,” 2026.
Click 👆🏻 on the image to schedule a conversation to learn more.
Credit unions do meaningful work every day—but those stories often live in silos.
CU Power Points is a living collection of impact moments that make the value of credit unions easier to see, reflect on, and learn from.
👉 Explore CU Power Points. Submit your own!
Your Board. Your Strategy. Future-Ready.
The future of credit unions is data-driven—and that future begins in the boardroom. THRIVE’s Board Strategy Workshops help unlock alignment and accelerate your leadership’s journey toward impactful decisions. These customized sessions guide boards beyond passive oversight into confident enablers of innovation, simplifying AI and analytics for real-world applications.
If your leadership is ready to shift from “data stuck” to “data smart”—fast—this is for you. Curious? Let’s build your next board strategy together. Learn more here.
Comments