Financial Wellness Programs

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What are employee financial wellness programs?

Only 17 states require financial education in high schools, leaving many adults illiterate on managing their personal finances later on in life. Basic financial concepts like debt, emergency savings, retirement readiness, and budgeting can seem impossible to grasp to fresh graduates, young adults, or anyone without a solid financial background.

This translates to more employees being stressed because they simply do not know how to budget and organize their finances. To answer this problem and the rising demand, employers and organizations have started to offer employee financial wellness programs.

Financial wellness programs are designed to educate employees on how to most effectively manage their personal finances. Most people in their lifetimes will experience some financial difficulties but might find it hard or even embarrassing to ask for help.

These programs remove the stigma around financial struggles and “normalize” this aspect of our lives. When employees see colleagues facing similar problems, it can help them feel supported and motivated, which will build a company culture of financial wellness.

Financial wellness vendors can differ in how they operate, either through personal coaching, workshops, or by implementing technology.

Organizations need to assess which financial issues their employees are dealing with and match with a vendor that is most suitable to the size and needs of their organization.

Vendors typically cover a wide range of services, with some of the most reported benefits listed as: 

  • Preparing for retirement
  • Paying off debt
  • Student loan planning
  • Budgeting
  • Mindful spending
  • Better management of investments and asset allocation
  • Having sufficient emergency funds

CAN FINANCIAL WELLNESS AFFECT HEALTH?

The definition of financial well-being is being able to meet current and ongoing financial obligations, feeling secure in your financial future, and being able to make choices that allow you to enjoy life.

Financial stress directly impacts physical health, relationships within the workplace and personal ones, productivity at work, and work attendance.

For employees, financial well-being means being debt-free and stress-free.

By implementing these programs, organizations empower their employees to feel confident in their ability to make the right financial decisions.

Those who have used financial wellness programs have reported better mental health, lower stress, better physical health and are overall more optimistic about their financial future.

How do financial wellness programs affect organizations?

Financial stress has a negative impact not only on employees but corporations as well. The anxiety felt by employees will reflect on the company’s spending due to higher healthcare plan use, an increase of absenteeism and productivity in the workplace, and lower retirement savings.

On the other hand, appreciation for salary and benefits, easier recruitment, and overall increased satisfaction with the organization is commonly reported when financial programs are incorporated.

It has been shown that after improving the financial wellness of employees, employees have fewer unplanned absences and have increased loyalty to their employer.

For these reasons, it’s wise for organizations to consider incorporating and investing in a financial wellness program.

Financial wellness programs are not simple accounting programs; they offer so much more. For employees, these programs can produce life-changing habits and improve their financial well-being. These programs can offer a great return on investment for employers and improve the company’s performance.