Making Financial Well-being a Priority
Most of us have experienced financial stress at one time of another. Maybe we’ve been unemployed, had trouble making ends meet, or felt overwhelmed by college debt.
The economic downturn of 2020 has only made this situation worse for many people. The US unemployment rate jumped from 3.5% in February 2020, to 7.9% in September. And that’s the good news. It’s down from a high of 14.7% in April.
While unemployment is certainly one cause of financial stress, insufficient savings and lack of ability to pay debts may also contribute. Long before the pandemic and the ensuing economic downturn wreaked havoc with our lives, many people were dealing with financial stress on an ongoing basis. A 2019 report showed that as many as 68% of survey participants acknowledged feeling stressed by their finances.
Linking Financial Well-being and Health
When we are stressed, regardless of the source, our health and well-being are impacted. Money is an emotional topic. In the workplace, when an employee is struggling with financial stress, they don’t check it at the door when they show up for the day. It is with them all day long. When someone is dealing with significant debt, they are more likely to report health issues. Financial stress can also cause someone to postpone or ignore needed medical attention which can lead to distraction and disengagement at work.
How Employers Can Help
Employers play a key role in helping to strengthen the financial well-being of their employees. Here are a few ways to start:
Education
In a recent conversation with financial professional, Jon Bicknell, we discussed what gets in the way of people managing their finances. “I think the biggest hurdle comes down to education. People are in one of several places. Either they have a great deal of concern around spending and saving, they want to avoid the topic altogether, or they’re somewhere in between. Often times the folks who are just starting out are saddled with some debt. So, I think that’s one of the things that impedes them. But the plain old answer to that question is education. They need more education.”
A great place to start with financial well-being is education in the basics. Programs that teach employees skills such as budgeting, expense management, and managing debt can help reduce the fear or intimidation we may feel regarding our finances. These skill-building programs can help employees track spending and repay debt, establish an emergency fund, and learn other essential financial skills.
Emergency Funds
Consider offering new or expanded benefits in the form of an emergency fund. This fund is available to provide employees with emergency cash to help them with unexpected expenses. During difficult times, such as we are experiencing in 2020, such a benefit can bring peace of mind. One of AdvancingWellness’ clients tripled the amount they normally contribute to employee emergency funds this year.
Promote Existing Resources
Perhaps one of the biggest challenges and greatest frustrations for both benefits and well-being professionals is communicating existing resources and benefits to employees. We may think we have effectively communicated the many benefits offerings available, including retirement, college planning, and childcare funding. However, continued communication is essential. We have to keep finding new and creative ways to share the information with employees.
When our financial life is out of whack, our whole life feels unbalanced. Employers can help relieve the stress and improve their employees’ well-being by making financial well-being a priority.
