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Household Financial Security Framework

In order to help families move up the economic ladder, we need a clear understanding of the many factors that contribute to either building up or eroding the financial security of households, and how these factors are related to each other.

CFED created the Household Financial Security Framework to illustrate – from a household’s perspective – what it really takes to build financial security over time. Individuals must first learn the knowledge and skills that enable them to earn an income and manage their money. They then use that income to take care of basic living expenses and debt payments and save for future purposes. As savings grow, households can invest in assets that will appreciate over time and generate wealth and income. Throughout the cycle, access to insurance and consumer protections help households protect the gains they make. This is an ongoing process in which each component contributes to the next and the household’s overall ability to become financially stable.

In addition to describing the connections between learning, earning, saving, investing and protecting, the Framework highlights the critical importance of delivering essential services to households and how those services, such as public benefits, child care, affordable housing or matched savings, contribute to the overall financial well-being of the household. Also crucial are the larger systems and infrastructures, both policy- and market-based, necessary to facilitate entering and staying in the economic mainstream.

The Framework’s focus on the household provides a universal lens that we can all look through. From there it is possible for any organization – government, nonprofit, philanthropic or private sector – to identify the specific ways their work contributes to the financial betterment of families. The framing fosters cross-sector communication and also helps people understand why and how their work is connected from the vantage point of the household, as well as how they may be able to build additional financial security supports into existing programs serving low- and moderate-income families.

Click here to learn more about the Framework's components: Learn, Earn, Save, Invest and Protect.