How will I pay my rent this month? How will I pay my bills? Will I ever get out from under my student loans? What happens if I can’t make a credit card payment? What if someone in my family gets sick? Will I ever have enough savings to retire?
Imagine trying to focus on work with these questions bouncing around your brain. You probably don’t have to imagine because you’ve had similar worries at some point in your life — if not at this very moment.
Financial anxiety is extremely common. Many of your employees are grappling with the same concerns. A recent survey by Capital One and The Decision Lab found:
- 77% of Americans say they feel anxious about their finances
- 58% say that finances control their lives.
- A little over half of Americans say they have trouble controlling their money worries.
Debt can be especially overwhelming. About a third of Americans say they worry about their debt daily or nearly every day.
The concept of wellness has expanded substantially over the past several years. Where once the term encompassed physical health alone, we now view wellness more holistically. More and more organizations are embracing this holistic view of wellness and adding financial wellness programs to their benefits packages.
What Is Financial Wellness?
Being financially well doesn’t mean getting rich. Definitions of financial wellness vary. But in general, financial wellness means learning to make intelligent decisions with your money so you can feel secure about your ability to fulfill your present and future financial obligations.
A personal finance expert writing for Forbes breaks down five key indicators of financial wellness. According to this definition, someone who is financially healthy:
- Is prepared for emergencies, such as unexpected medical bills or a layoff.
- Has spending habits that align with their values.
- Is in control and confident with their decisions.
- Stays on track toward achieving their financial goals.
- Is free of financial stress.
How Helping Your Employees Achieve Financial Wellness Helps Your Organization
When workers are stressed, anxious, or depressed about anything, their job performance suffers, they get distracted, and they disengage from work. So, it should be no surprise that money-related concerns can also prevent your employees from being their best selves in the workplace.
A Willis Towers Watson Global Benefits Attitude Survey found that employees that are financially struggling:
- Are absent 41% more often than financially-secure employees.
- Have lower engagement levels than their peers (51% vs. 29%).
- Are less productive than others (32% vs. 5%).
Financial wellness benefits help your employees pay off their debt, save wisely, and learn to become responsible money managers — and by doing so, clear their minds to focus on work. The advantages for your company are numerous: more productivity, less absenteeism, and higher engagement levels.
Financial Wellness Program Ideas for Your Employees
A strong financial wellness program starts with a robust set of financial tools your employees can rely on to build long-term financial stability. This can include a retirement savings account — such as a 401(k) — and tax-free health care accounts, such as a health savings account (HSA) or flexible spending account (FSA).
Matching your employees’ contributions to these savings accounts will encourage usage and entice prospective employees.
However, don’t assume your employees understand what these accounts are. According to one survey, only 37% of Americans fully grasp how a 401(k) plan works. This is why employee education should be a pillar of your financial wellness program.
Most employees only hear about their benefits once a year when open enrollment rolls around. Overwhelmed with information, many employees struggle to retain what they’ve learned.
Year-round education can help keep benefits top-of-mind for your employees and remind them to take action before critical deadlines (such as the tax deadline in April).
Other ways to support your employees’ financial wellness include:
We could all use some expert guidance to manage our money, save for retirement, and pay off debt. One-on-one financial counseling has become a common benefit offered by more than half of American employers.
Student Loan Assistance
A few employers straight-up pay their employees’ student loans. If your organization is unable to go that far, you can still help your employees get their educational debt under control by offering student loan counseling, providing access to loan refinancing and consolidation resources, or contributing to loan payments.
Seminars, Webinars, and Workshops
Like one-on-one financial counseling, free financial planning seminars and workshops can help demystify complex financial concepts for your employees. Nowadays, online seminars (webinars) are a must, both for serving remote employees and allowing convenient on-demand access to pre-recorded presentations.
Day-to-day life is expensive. Discount programs on essentials like home and auto insurance, wireless plans, and travel can help your employees stick to a reasonable budget.
Challenges and Incentives
Financial wellness and physical wellness are the same in at least one sense; achieving wellness requires motivation, commitment, and accountability.
As with exercise and eating right, many of us intellectually understand the value of planning a budget, setting aside savings, and spending wisely — but it’s so easy to get off track and so hard to get back on again.
Your financial wellness program can provide the same sort of encouragement and support as your physical wellness program — and even some of the fun — through:
- Incentives for participating. Even small rewards such as t-shirts or gift cards can be motivating.
- Group challenges. Monthly budgeting or savings challenges can keep people going and reinforce healthy financial decisions through friendly competition (and/or teamwork).
- Goal-setting and tracking. It’s much easier to achieve your goals when you know what your goals are. Tracking tools and apps can help your employees monitor their progress as they work toward their financial objectives (such as saving for a down payment on a home).
Financial Wellness Benefits = Stress Relief
Financial issues are a leading cause of stress for people of every age and income level. You may not be able to stop your employees from worrying about money, but you can help prevent financial concerns from overwhelming their thoughts with a carefully-chosen selection of financial wellness benefits.
Financial wellness benefits can include tools and learning resources designed to help your employees maximize their income, minimize financial stress, and face the future confidently.