Financial wellness isn't only about preparing for retirement
Financial wellness is so much more than just saving for retirement. It includes the day-to-day decisions people make that affect their financial future. Therefore, the way a person handles their money is essential to economic well-being. Consequently, it is crucial to consider these five questions when considering your employees' overall picture of financial wellness.
- Do your employees have enough money to pay for their daily expenses?
- Are they living within a budget?
- Do they have a cushion for financial emergencies?
- Are they financially secure or are they working to become debt-free?
- Are they insuring the assets most valuable to them?
Why should employers prioritize their employees' financial health?
Money can cause stress. Ask most people how they feel about money, and you'll probably get an answer that's in line with the following:
Nearly 2 in 3 adults (64%) say that money is a significant source of stress in their life, and around half of adults (52%) say they have experienced negative financial impacts due to the pandemic.1
Employees want to feel comfortable asking for help and often feel like this help is out of reach. Many people think financial guidance is not accessible for anyone except the wealthy. Having a financial wellness program could help organizations make more attractive offers to new employees and prevent existing staff from leaving.
How employers can help
As an employer, you’re in a unique position to teach your employees about financial wellness. Offering a benefits package consisting of several elements that provides your employees with a complete, well-rounded compensation package is just the start. To ensure that employees are getting value from their benefits, you need to make sure they understand how to get the most out of them.
First, help your employees develop and implement financial plans that work for them. You can do this by offering your employees periodic coaching from an established expert in financial planning.
Next, help your employees build a bank of knowledge and skills related to financial wellness. Topics could include debt management, emergency savings planning, tax guidance and preparation, identity protection and more.
Keep at it and be sure to measure the outcomes. Then, adjust your program if necessary. The more you educate your employees about the program and their financial wellness, the happier, healthier and more productive they may become.
This blog is up to date as of May 2022 and has not been updated for changes in the law, administration or current events.