6 Components of a Workplace Financial Wellness Program

Financial wellness has never been more important. As workers around the country struggle with the complexities of lockdowns, social distancing and remote schooling, concerns about money remain top of mind. A recent study by PWC found that 58% of employees are stressed about finances, and half of them say finances have been distracting them from work.

Employer-offered financial wellness programs are meant to support financial literacy through education and enable employees to put their short and long-term goals into practice.

Here are six key elements every successful employee financial wellness program should contain.

Beginning and Advanced Saving and Budgeting

From tracking expenses to the best way to spend their stimulus check, employees need a program tailored to fit their needs. Any materials or courses you provide should cater to multiple levels of financial literacy, starting with basic budgeting.

Consider using quizzes, online calculators and other practical resources that identify spending habits and recommend budgeting apps. Let employees know your company’s offerings like health insurance plans, wellness stipends and any benefits that can help them plan their spending.

For more advanced budgeters, dive into the nitty-gritty of debt repayment and investment options. And don’t limit your resources to programs your company offers. Try to give employees a range of information so they can choose the strategies and tools that work best for them.

Crisis Preparation for Short-Term Emergencies

Over the past year, the COVID-19 pandemic and recession have highlighted a major gap in Americans’ emergency savings. According to PwC, 38% of employees are unprepared to meet short-term cash needs and have less than $1,000 saved for emergencies.

Effective financial literacy programs should address the importance of starting an emergency fund and suggest actionable steps for setting up and automating savings. Even after the pandemic, many workers will still need extra support, so share emergency resources and news on eviction bans, upcoming stimulus payments and tools like the IRS Get My Payment platform.

Don’t forget to cover other types of crisis preparation like life insurance policies and interest-free loans.

Financial Goal Setting and Planning

Even in a crisis, it’s important to look ahead and set long-term financial goals. Help your workers establish SMART, achievable goals and break them down into weekly, monthly and yearly plans with clear and actionable steps.

Provide educational resources on topics like:

• Homebuying, mortgage loans, and refinancing
• Building their credit score
• Investment strategies to build wealth and savings
• Passive income opportunities

This will help inform their choice of financial goals and the steps they should take to achieve them.

PwC’s survey also revealed a widening gender gap among employees with savings plans. 55% of men could meet basic living expenses long-term if they become unemployed for an extended time, compared to just 29% of women. Consider adding a coaching element to your program that provides touchpoints and long-term support to female employees.

Strategies for Paying Off Debt

Whether it’s credit cards, medical debts or student loans, most American adults have debts to pay off. Your program can provide the support and resources they need by:

• Educating them about different payment strategies like debt snowballing and debt avalanches
• Showing them the pros and cons of debt consolidation and a step-by-step process
• Sharing repayment options and alternatives available to them

Give workers with student loans an overview of different repayment plans so they can make an informed decision based on their circumstances. Consider offering workshops on calculating loan principal and interest and what to do when faced with financial hardship.

And don’t forget to update them on COVID-19 relief measures such as 0% loan interest and suspended payments for federal loans.

Plans and Tools for Retirement Savings

Employees of all ages need help making a retirement plan. In the past year, more than half of Gen X and Millennials have said they’ll need to withdraw cash from retirement savings to meet their expenses.

Offer education around the importance of retirement savings and tools for calculating how much they’d need to retire. Include information about 401(k) and 403(b) plans, their differences, and how to make the best choice for their retirement needs.

You can also consider workshops on tax and saver’s credits, how to deposit your tax refund into a retirement account, and Health Savings Accounts (HSA) as a retirement planning tool.

Have an employer retirement plan of your own? Make sure your workers know they can save more through contribution matching.

Guides to Using Company Resources and Benefits

Your workplace benefits should support employees’ financial wellness. But remember, they can’t take advantage of something they don’t know enough about. Offer insight into all your “work perks” and demonstrate how they can help employees save money and meet financial goals.

Remote office and commuter stipends can cut monthly transportation costs, while medical insurance plans or childcare support help reduce the stress of covering unexpected costs.

With ongoing guidance, you can help team members navigate employee benefits and encourage a financially healthy and supportive work culture.

Supporting a Better Future

67% of employees will only start looking for financial guidance when they have to make a big financial decision or in the middle of a crisis. For many, that advice often comes too late.

Create a financial wellness program that will support your employees every step of the way, from creating their first budget to retirement. By helping them fill gaps in their knowledge and providing them with resources and actionable tools, you can empower workers of all ages and situations to achieve financial success.