We all know how important it is to save money for the future. We know how important it is to manage our finances today so that we have the resources we need to support ourselves tomorrow. It is with that understanding that growing numbers of employers are looking to launch financial wellness programs as a benefit to employees.
A typical financial wellness program focuses on things like budgeting, debt management, financial planning, and retirement planning. But needs obviously vary from one employee to the next. Thus, it's not good enough for an employer to latch onto a generic financial wellness program and hope for the best.
Financial wellness programs should be tailored to employee needs. Here are five things to know before launching a program:
1. Immediate Needs Are More Pressing
There is a temptation to focus all of our financial wellness energies on the future. We focus a lot on saving for retirement, for example. But a 2018 report looking at how U.S. workers view their finances reveals something interesting: employees tend to view their retirement plans as a short-term safety net rather than a long-term source of income.
Simply put, a fair number of American workers are not confident they will reach their retirement goals. As such, they see no reason to avoid using retirement savings to cover emergency cash shortfalls. That does not bode well for retirement saving. It also has obvious tax implications.
2. Employees Don't Know What to Do
Next, understand that talking about financial wellness is as meaningless to some employees as talking about colonizing Mars. They don't know what to do because they have never been trained in the area of financial management. Talking to them about a retirement that maybe 30 to 40 years away is fruitless. It is better to concentrate on more pressing matters like budgeting and debt retirement.
3. Health Coverage is Still Important
We tend to think of financial wellness only in terms of money. As such, we talk about things like pay raises and savings accounts. But it turns out that as much as 20% of all U.S. adults would rather have health insurance than a pay raise. When you consider how much the standard doctor's office visit costs these days, that number is not so shocking.
4. The Consumer Mentality is a Problem
One of the biggest reasons financial wellness programs are even a thing is the fact that we live in a society fully invested in the consumer mentality. The consumer mentality is one that says a person should satisfy all of his/her desires as soon as they arise. It is the same mentality that causes people to max out their credit cards and take out mortgages they have no business applying for.
No amount of financial wellness counseling is going to help an employee get his or her finances under control if it is not coupled with a concerted effort to break the consumer mentality. People in dire need of financial wellness are also in dire need of learning how to live within their means.
5. Mitigating Stress is a Big Incentive
Finally, the previously mentioned report reveals that many people define financial wellness as a lack of financial stress. Whether or not you agree is less important than the fact that people actually think in those terms. The selling point here is that financial stress can be used to illustrate what needs to be done to achieve financial wellness. That stress can be a big motivator to getting one's finances back on track.