If you want to understand Americans’ financial future, start by looking at the financial health of Chicagoans.
Drive 20 minutes from the Gold Coast to Englewood, and you’ll travel between two economies — same city, same moment in time, radically different financial realities. That gap is not an accident. It is the product of decades of decisions about where to build, who to lend to and which neighborhoods to invest in. It is also, as new data shows, something that can change.
I came to Chicago more than 30 years ago to study income and wealth inequality. As one of the most segregated cities in America, it was, unfortunately, the perfect laboratory. Along the way, I learned that the places and spaces where people live, work, learn, play and pray hold enormous power over their well-being.
My organization, Financial Health Network, has measured the financial health — a household’s ability to make ends meet and stay on track through financial shocks — of Americans for nearly a decade. After a 2022 baseline study, FHN published the “Financial Health Pulse 2025 Chicago Trends Report” detailing how the financial health of households across Chicago and Cook County has evolved over three years. The findings show a story of both progress and persistence.
Financial vulnerability in Cook County has declined modestly since 2022, with fewer households reporting having less than a week of savings and fewer lacking confidence in reaching long-term goals. The clearest improvements occurred in Chicago itself — notably among households with Black and Latino residents, who have long faced disproportionate risk.
These gains matter. Population-level shifts are rarely dramatic. Even small improvements represent real households gaining stability.
But the gains are fragile.
More than one-third of Cook County households still report experiencing material hardship. Rents have climbed sharply. Debt delinquencies are rising. While many renters aspire to homeownership, most say buying today would be difficult, with the cost of a down payment as the primary barrier. Federal cuts to Medicaid and the Supplemental Nutrition Assistance Program also threaten to destabilize families who have only recently regained their post-COVID-19 footing.
Cities are where federal policies become personal. They are where trust in financial systems is built or eroded through daily experience. They are also where solutions can be tested and refined.
Sustained improvement will require focused action in three areas:
• Homeownership. Access to homeownership remains a challenge, despite a variety of homebuying assistance programs, because of a lack of affordable stock. But access alone is not enough — support also is needed to help homeowners stay in place; 20% of Chicago homeowners report they could not afford a needed repair, while 8% could not afford their property tax bill. Only 21% of Chicago homeowners have a will, compared with 37% in the suburbs, putting intergenerational wealth transfer at risk.
Representatives of the Hope Center Foundation, United Power for Action and Justice and Salem Baptist Church of Chicago were on hand Dec. 18, 2024, to provide keys and housewarming gifts to families on Chicago’s South Side, nearly 60 years since the last new residential home construction sale in the Roseland neighborhood. (Antonio Perez/Chicago Tribune)Community development financial institutions, city programs and philanthropy can expand home repair grants, property tax relief and estate planning support. Homeownership remains one of Chicago’s most powerful wealth-building tools — but only if families can hold onto what they’ve built and leverage that equity.
• Education and career pathways. Connecting education to economic mobility requires more than sending kids to college. Our data shows that a college degree does not guarantee strong financial health. We must support two- and four-year students to complete their degrees, but we also need to expand apprenticeships, credentials and skills-based hiring — connect graduates to quality jobs with benefits and real paths to advancement. This is critically important as artificial intelligence appears poised to erase a large portion of entry-level jobs.
• Targeted local investment. Pessimism about neighborhood conditions is highest in underinvested areas of the West, South, Far South and Southwest sides. On the Far South Side, 1 in 4 residents said their expectations for neighborhood improvement were worsening — compared with just 11% on the North Side. These differences mirror powerful gaps in household financial health across neighborhoods, which themselves follow long-standing patterns of geographic inequality.
Capital investments must be directed to areas with concentrated vulnerability, guided by resident priorities and linked to community development. Hyperlocal improvements in parks, child care, housing, transportation, public safety and more provide the foundation for enhanced quality of life; paired with income growth, they drive real improvements in financial health and opportunity.
Chicago is rich with institutions and leaders who bring their passion and expertise to tackling these issues, and their efforts are working. Our study also shows that Chicago and Cook County households outperform the nation overall in the ownership of retirement accounts, 529 education savings plans and short-term savings, thanks to years of targeted investment and policy advocacy.
Chicago has long been a city of neighborhoods, where residents’ identities are tied up to the block where they grew up. This is where innovation and possibility are rooted. Ensuring we are a nation in which the majority of citizens lead financially healthy lives requires working city by city, neighborhood by neighborhood, household by household.
When we close financial health gaps in Chicago, we move closer to closing them across America.
Jennifer Tescher is founder and CEO of the Financial Health Network, a Chicago-based nonprofit dedicated to improving financial health for all. She is also a fellow in the inaugural Leadership & Society Initiative’s Imagine Pathway at the University of Chicago.
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