In late 2015, we followed up with Financial Diaries households to check in on their economic lives two years after the initial Diaries study ended. We wanted to know how they are doing now, the factors driving changes in their economic lives, and the role that financial services and financial choices were playing in their economic trajectories.
About half of respondent households feel their situation has improved in the past two years. We find that an increase in income—primarily driven by business investment—is the most dominant driver of improved conditions. However, secondary and higher education and healthcare expenses also play an important role in constraining outcomes, holding families back in the short-run even when incomes rise.
We explore some of the complexity underlying proximate drivers of change and draw a few implications about what this all means for high impact financial services.