The financial wellness concept is spreading across America. Employers are being asked to get on board, acting as partners with other stakeholders to help America's workers achieve better financial health. If this is something that interests you, this blog post is right up your alley.
The Concept Explained
The first thing to know is that financial wellness and financial health are not the same thing. Like physical health, financial health is the state of having healthy finances – i.e., you are more than able to pay your bills, your debt is manageable, and so on. Financial wellness is not a state. It is a mindset combined with a set of tools that helps a person achieve and maintain financial health.
This is an important distinction in that so many people think that merely earning more money will lead to financial health. That's not necessarily true. In fact, those same 2017 statistics show that nearly a third of all workers making between $50,000 and $99,000 annually still live paycheck to paycheck.
Financial health is not about how much money you earn. It is about what you do with that money. As a principle, financial wellness is based on learning to live within your means and then using whatever resources you have at your disposal to do so.
Two Things Employers Can Do
Here at BenefitMall, we believe there are two things employers can do to embrace financial wellness. First, they can become actively engaged in educating workers in financial wellness strategies. For example, employers can and should offer their workers training that teaches them fundamental principles of budgeting, credit, taxation, etc.
Employers can also offer financial advice and planning services by establishing relationships with qualified partners. Such advice can prove invaluable to workers planning for their futures after getting their immediate financials under control.
Next, employers can offer new and innovative benefits designed to help employees make the most of their financial resources. One such benefit is on-demand pay, a benefit that allows employees to get paid when they need the money rather than having to wait until the next scheduled payday. If you would like to learn more about how it works for BenefitMall clients, we would be more than happy to discuss it with you.
Another great benefit is student loan repayment. Growing numbers of companies looking to help their younger workers tackle student debt are offering cash benefits that go directly to debt retirement. It's a lot like health insurance and retirement plans from an accounting perspective, but the money goes to paying off student loans.
A Change of Mindset
The sum total of all of this is that achieving true financial wellness requires a change of mindset. Note that the change isn't limited to employees. Yes, learning to live within one's financial means goes a long way toward achieving the long-term financial health that can lead to more productivity and less stress. But employers, payroll providers, etc. also have a role to play.
We can all work together to encourage financial wellness in and out of the workplace. If we all do our part, we can help those willing to embrace financial wellness change their habits so that they are no longer living paycheck to paycheck.