April is a month of many hats - spring, taxes, and financial literacy. The recognition of National Financial Literacy Month was created in an effort to empower Americans to take control of their finances by educating themselves and becoming confident in their financial decisions. Financial literacy is not only about having this knowledge, but also about implementing the learned skills to effectively manage one’s money and hopefully become financially well.
Bad personal finances are an epidemic. 75% of Americans are living paycheck to paycheck - up from 56% in previous years. PwC’s 2016 Employee Financial Wellness Survey results show that 52% of employees admit to being stressed about their finances, while 28% of those employees are distracted at work, and 46% of those distracted employees spend more than 3 hours per week on personal finances during working hours. It is also estimated that companies are losing around $7000 per financially stressed employee, per year. As if that weren’t enough, 55% of employees are worried about not having enough emergency savings for unexpected expenses and 51% of employees consistently carry a balance on their credit card. Similarly, 37% of employees are worried about not being able to retire when wanted and 44% of all employees plan to postpone retirement. Employees are spending well beyond their means and do not have the financial confidence to make the right decisions when it comes to their financial futures.
Action Items. Financial Literacy + Financial Wellness.
It is no secret that employees struggle with their finances. So, what can be done to help? The good new is: employers are now provided with the opportunity to improve employees’ financial health in the workplace through financial wellness solutions. Companies are finally beginning to realize that by providing employees with financial wellness tools, they can tangibly improve productivity, decrease absenteeism, reducing turnover, all while seeing a clear return on investment.
Not all financial wellness solutions complete the equation, however, a great financial wellness solution goes far beyond a retirement plan. The ideal solution is a secure, customizable, easy to use platform that provides real, unbiased human advice paired with actionable tools.
Financial wellness solutions are designed to help with everything from the basics of banking to buying a house, with all the steps in between, such as starting your first emergency fund, saving for retirement or college, and making investments.
Becoming financially literate means understanding how to manage your money responsibly - income and expenses, debt, savings, investments, and preparing for the unexpected. The more prepared, the more financially fit. Financial literacy can’t happen overnight, but with the help of financial wellness - employees are given the chance to take easy, actionable steps towards improving their finances and their future lives.