In a roaring economy, financial wellness is still needed

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Low unemployment and the stock market’s record breaking run have yet to translate to higher pay for American employees. And with employers still reluctant to raise wages, the old saying “it’s not what you earn, but what you save” is becoming ever more prevalent.

But saving money for most people is a challenge. One in three Americans have less than $5,000 in retirement savings, according to Northwestern Mutual’s 2018 Planning and Progress Study. With wages barely keeping up with inflation, many workers are feeling anxious and employers are offering financial wellness benefits.

“Look, your employees are stressed out and that stress is associated mainly with financial issues,” says David Kilby, president of FinFit, a financial wellness benefit provider.

He says stress focuses on absenteeism, presenteeism and distractions to time on a job dealing with these types of financial issues, “all the way to extreme measures like theft or termination,” result from stress over money, says Kilby.

Kilby says 25% of the employers his company services gave cash advances to their employees at one time or another, including employees who earn six figures.

“We’re working with a wide array of income earners across the spectrum. We have six figure earners that are living paycheck to paycheck that are making well over $100,000,” he says. “That’s not an income issue — that’s a spending issue.”

When implementing a financial wellness benefit program, Kilby says his company first starts by having employees engage in a 20-minute exercise that asks questions and gathers information about the employee's financial well-being. The FinFit system is integrated with the employee’s bank accounts to track their spending habits, and employees can access to the mobile platform from anywhere. The employee is then given a score based on their personal financial goals.

“If someone is socking away 15% of their paycheck and they’re 25-years-old, we pat that person on the back,” says Kilby.

At the same time, if someone is carrying a $20,000 credit card debt, “that’s an opportunity to create some education and development with that particular individual,” he says.

FinFit also uses gamification to motivate users. “We provide benchmarking, which basically tells you how you compare with Mary who sits across the cubicle from you,” he says. Spending habits become competitive sport, which Kilby says keeps employers more engaged.

Visual cues are also important. “We can say, “you spent 23% of your income this month on fast food,”” notes Kilby, who says this information is often more effective than a dollar amount on a bank statement.

Today’s workforce values workplace culture more than any other time in history, says Kilby.

“The almighty dollar is not controlling employment choices anymore. People are making choices on all kinds of issues,” he believes. “A work environment where workers feel valued and are surrounded by colleagues are also happy and will lead to motivated and engaged employees who will be probably be more productive.”

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Financial wellness Financial stress Financial literacy Financial planning Retirement readiness Retirement education Retirement planning