Financial wellness programs are becoming a more popular corporate benefit. Along with mental and physical well-being, having a solid understanding of personal finances can transform employees’ health.
A recent CareerBuilder report notes that 78 percent of workers are currently living paycheck to paycheck (up from 75 percent from the previous year). Additionally, 71 percent of American workers indicate they are in debt. How much debt? Experian’s 2017 State of Credit report indicates that the average American owes $6,354 in credit card balances and carries mortgage debt of at least $201,000.
These findings don’t even count the trillions in unpaid student loan payments. It’s no wonder that many workers are stressed out and losing sleep over financial worries.
How Debt Impacts Health
The American Psychological Association (APA) released the latest installment of its annual Stress In America: The State of Our Nation report, which highlights the amount of stress caused by financial worries. In terms of the factors that cause respondents stress, “money” (62 percent) came in second only to the “future of our nation” (63 percent). The report also found that, “Americans are more likely to report symptoms of stress, which include anxiety, anger and fatigue.” Two specific areas of financial worry from the APA study include the rising cost of health insurance and the country’s economy. One in three survey participants said they also worried about tax increases.
The National Institute for Occupational Safety and Health (NIOSH) notes that the long-term effects of stress can include mood and sleep disturbances, chronic illnesses, headaches, increased tardiness and absenteeism, as well as reduced performance. When stressed, people typically become overwhelmed, feel burnt out and shut down over time. The source notes that health care costs can increase as much as 50 percent for employees who are suffering from unresolved stress. Even if employees take time off for stress-related problems, this can impact the company’s bottom line. Healthy, happy workers are more productive.
Employees know they are not doing their best work when they are stressed about being in serious debt. A recent Towers Watson survey found that 34 percent of U.S. workers believe their negative financial situation has had a bad impact on their lives. This trickles over into how much time they spend focused on work and how much time they spend dodging collection calls.
Cue, Financial Wellness Programs
One of the guidelines provided by the APA recommends that individuals seek out professional help to cope with overwhelming stressors. Financial education programs and credit counseling can help employees become better stewards of their earnings and reduce their debt. It’s important for individuals to address the emotional (and social) factors of economic stress and make changes to unhealthy behaviors.
Financial wellness programs can be offered in several ways, making them a flexible benefit. One approach includes offering employees access to a financial education tool that can help resolve debt. Another method is bringing in a financial advisor to answer employees’ questions and give advice about how they can pay off debt while saving for retirement. If employees are interested, a third option is to consolidate their debts and have payments voluntarily deducted out of each paycheck. With any method, it’s important for employees to see how they are progressing with financial management, as this can help them stay positive and reduce stress levels.
From an organizational standpoint, it makes good business sense to offer financial wellness programs. This effort can help employees face financial burdens head-on, find resources to pay off debt and get back on track with their career goals.