Financial wellness results from making informed short- and long-term financial decisions that result in optimal health, productivity, and a solid foundation for every stage in life. Financial stress is gone, replaced by actions that support well thought out goals. In short, you mindfully manage your money, instead of your money managing you.
The reasons for this financial stress range from not having enough money in savings and being unable to meet monthly expenses, keep up with debt, or pay for college. One in four employees ranks a financial wellness benefit, including access to unbiased counselors, as the most desired employer benefit.
Typically, people who have financial wellness have the following four elements in place:
- Their income covers their expenses and allows them to stay on top of their debt repayments.
- They have savings for emergencies or financial upsets such as critical home repairs, unexpected medical bills, or job loss.
- They are saving and working toward long-term financial goals.
- They have the freedom to make choices that allow them to enjoy their lives.
Why is Financial Wellness important?
Financial wellness is critical for all people because it can help lower your stress levels. Stress related to money can affect every aspect of your life. Your personal and professional productivity could potentially suffer due to financial worry. In fact, this is one of the key reasons that so many employers offer financial wellness programs. Employers are well aware of how stress reduces productivity, and recognize that helping their employees learn about financial wellness can help strengthen the business’s bottom line.
Financial wellness can help you in the long run. If you’re focused on financial wellness, you’re also working on your long-term goals, and as a result, you are likely to enjoy both your present and your future more.
Financial Wellness means more Productivity
Our research shows that the financially well consistently show a higher level of engagement at work compared to the financially unwell. They are more likely to say they enjoy going to work, and to feel motivated and productive during the workday. They are also more likely to feel valued and supported by their employer and to feel that their skills and knowledge are well utilized.
Furthermore, 92% of professional employee counsellors say that financial wellness positively impacts overall health and workplace productivity. The bottom line is that financially well employees come to work more engaged, and are more productive during the workday.
How do you manage Financial Wellness?
If you are having trouble with financial wellness, look for tools and education to help you develop a healthier relationship with your finances. Depending on your situation, this may involve attending financial seminars, using budgeting apps, or working with a financial professional. Ultimately, to help you pursue financial wellness, you should consider bringing the following elements together:
- Earning a sustainable income
- Getting control over your day-to-day and month-to-month expenses
- Creating and maintaining effective money management strategies
- Setting up a savings account for financial emergencies
- Outlining long-term financial goals
- Saving for your long-term financial goals
4 Steps for launching a Financial Wellness Program
1. Concentrate on your Human-Resources Plan
A workplace financial wellness programme may be a strong tool to help you reach your organization’s strategic goals because financial stress can affect employee performance and job happiness. Consider implementing a financial wellness programme as part of your human resources strategy to address one of the fundamental causes of employee stress, which can manifest itself as decreased productivity, poorer employee morale, or a higher turnover rate. Everything from staff messaging to delivery method will be guided by a clear understanding of what you want to achieve.
2. Provide Engaging Tools
Attention spans are short, and time is tight. Give employees actionable, useful resources such as checklists, timelines, FAQs and tip sheets. Bundle information into annual enrollment, but also send reminders throughout the year. Consider contests, quizzes and fun live or virtual events to bring financial wellness topics and resources to life. Leverage internal resources such as marketing, social media and communications teams and employee resource groups.
3. Set specific Goals and Measure it
Share your goals with your employees and how you came up with them. Tell them you’ll be checking in to measure progress and get feedback. If people feel that they are part of something bigger than themselves, they might be more incentivized to be engaged. Note that their individual work on financial wellness helps your organization thrive and grow stronger, as employees feel more empowered and in control of their financial life.
4. Create Measurements and track your Progress
The same procedures that were used to establish employee needs may be utilised to assess the performance of your programme. Increasing involvement in retirement programmes, usage of flexible healthcare spending accounts, or attendance at various training sessions, for example, can all be indicators of increased risk. Remember that the most effective financial wellness programmes are those that modify both money attitudes and everyday actions in order to have a long-term impact.
Employers should also evaluate their performance in terms of their own internal objectives. Employee happiness is the most popular indicator, but to determine genuine return on investment, more particular measurements should be devised based on your unique HR objectives, such as competitiveness, retention, and employer branding.
How do you measure the impact of a Financial Wellness Program?
Measurement of any wellness program is absolutely critical to its success. Tracking and reporting results is the key to maintaining support from senior leadership, discovering weaknesses in programming, and planning for the future. Every good program starts with baseline data. Starting points for gathering this data include:
- Participation in retirement plans
- Utilization of health benefits
- Disability claims
- Lost-time accidents
- Turnover
Perhaps harder to track, but helpful if plausible and applicable, are data on absenteeism and productivity. Prepare to wait! The key to tangible results will be participation in all benefits plans, including health, retirement, and voluntary plans most of which roll out on a yearly basis. To keep momentum going in the short-term, evaluate financial wellness offerings by tracking participation and satisfaction levels, and assessing outcomes on behalf of the employee population.