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Strength Through Financial Wellness

Joetta L. Wagner

Joetta L. Wagner

financial wellness impacts physical, mental and emotional wellness

offering financial wellness services can include financial plannersThere are several types of wellness. Physical wellness is the one people are most familiar with, focused on making sure the body functions at optimal levels. People also have some familiarity with mental wellness, though it often (incorrectly) gets equated with mental health. Mental wellness focuses on how individuals feel about their talents, abilities and capacity to make a positive contribution to society. Comfort and confidence in each of these areas indicates healthy mental well-being. Emotional wellness is about being aware of one’s thoughts, feelings and behaviors. It’s emotional wellness that helps us negotiate our way through the ups and downs of everyday living. And then there’s financial wellness, which impacts everything, including physical, mental and emotional wellbeing.

How can employers and HR managers help employees perform the crucial tasks, such as budgeting, that lead to better financial security?

Five Elements of Financial Wellness

There are five basic contributors to financial wellness. First, helping figuring out someone’s budgeting and spending profile. Closely related is whether they have emergency funds ready and how big that cushion is. Financial counseling, especially from professionals, can help people understand and manage the first two. What employers offer for insurance and benefits packages is crucial for long-term financial wellness as retirement accounts and employer contributions come into play. Finally, investment strategies usually come into play only after most of the others are in good shape.

When it comes down to it, financial wellness isn’t about having the biggest paycheck. An employee could be making a modest salary and still have excellent financial health. Each element factors into overall financial well-being. And the human resources department can aid employees to strengthen their financial lives, starting with teaching budgeting and expense tracking. Too many people fail to take budgeting seriously, as evidenced by national statistics.

Statistics to Lose Sleep Over

According to financial-technology company Best Money Moves, Americans, by and large, are in financial trouble. 63% have less than $500 in a savings account. Over 70% have less than $15,000 saved for retirement. About 75% of Americans are struggling under debt with the average debt per person (excluding mortgages or home equity loans) reaching $37,000. The vast majority of millennials say they worry about their financial lives constantly

Financial stress also has a deleterious effect on physical, mental and emotional health. Stress triggers depression, anxiety, migraines, ulcers, high blood pressure, heart attacks and disrupted sleep. Americans need help with their finances. Employers can provide that help with the right financial tools and technology, as well as employee education for holding onto and growing their money.

Budgeting Is Key, Tedious Though It May Be

financial wellness impacts physical, mental and emotional wellnessNo one likes to take a hard look at their finances and discover they need to make changes. Few American adults want to spend time tightening their belts and rearranging investments. The best you can do as an employer is to give employees easier ways to budget and think about their personal profits and losses.

Before making an investment in fancy financial tech, you have to understand what your employees need. Tax season is a great time to start conversations about financial wellness. Take stock of what your employees use (and don’t use) from your financial benefits packages. Then ask them what would make these benefits more convenient for them. Ask what they’re struggling with. Do they have the resources to take an overarching view of their financial standing? Can they calculate their income and expenses? Do they have easy access to retirement savings accounts and are they using them?

Some studies show that up to 80% of companies found employees didn’t even open or read their benefits materials, let alone use them to improve their financial wellness.

Rather than losing stressed-out employees to absenteeism and lower productivity, help them get healthier. Provide products you know they’ll use because they’ve requested them. Most employees struggle to budget their expenses every month. It’s tedious work, but by giving them tools to save money and understand where their money goes, you’ll see greater engagement in your other financial wellness tools too.

A Few Things to Consider

Offer savings programs. Match more put towards their 401(k) accounts. Offer programs for paying down student debt or putting money aside for emergencies. If the money can automatically be taken out of employee paychecks, then they don’t even need to think about putting the money aside. If they don’t have to consciously budget these expenses every month, it can make tracking their income and primary expenses simpler.

Give employees access to budgeting tools. Even a simple app that tracks expenses and income can be extremely useful. If you can’t build an app yourself or the cost prevents you from purchasing an existing system, there are many free budgeting apps out there. You can research, try them for yourself, make recommendations, and then make them easy for workers to access.

Keep the lines of communication open year round and make everyone aware of important deadlines and program changes.

Stop. Breathe. Lead.

HR and mid-level managers have the tools and capacity to foster changes in all forms of employee wellness. It starts with research and continues by conducting surveys to determine what employees need. Finally, it’s maintained by developing programs that aid employees. There’s no downside.

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