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It’s Time to Think NOW! with Workplace Financial Education

Written by: Jeremiah DeGollon, AVP-Business Development, Summit Credit Union-Madison, WI

 

Most of the working population is working for a reason. I work because I want to provide for my family, and enable our household the opportunities that will bring them happiness and satisfaction in their life. At the end of the day, that’s what matters to me, but to everyone, their purpose is different. Ask yourself, “Why do I work?” 

Most of us can visualize what this purpose of our employment means; the roof over our head, the clothes we wear, the car we drive, the college tuition or student loan payment, or the vacation we’re planning. Most of the things we visualize in our lives has a financial component, and we work to afford us the opportunity to fulfill the vision. For many though, there is dark cloud that looms with every payday. 

Three out of every four employees report living paycheck to paycheck. It’s not just minimum wage earners either, 25% of those making $100,000 a year also find themselves living paycheck to paycheck. And those percentages only increase the younger the workforce, with 44% of millennials making $100K – $150K reporting their paycheck to paycheck problems. The stress and problems that result from living paycheck to paycheck is a real problem that affects employees.   

According to the American Psychology Association (APA), seven out of ten American workers say financial stress is their most common cause of stress, and almost half (48%) say they find dealing with their financial situation stressful. Absenteeism, presenteeism, workplace performance and social issues, garnishments and theft are just some of the problems employers deal with, due to employee financial issues. But in most workplaces, employees are provided little or no resources to help them achieve greater control of their financial situation.

Money was historically a topic people wanted to avoid, or were taught that it wasn’t polite to talk about it. Thoughts about money can conjure up feelings of embarrassment, shame, hopelessness, ineptitude, or the feeling of being out of control. What we are seeing more and more in the financial world, is a shift and people are starting to change their conversation with money. People now want more information, they want to talk about it; they want to gain control, feel empowered and make informed decisions. 

For some employers though, there is the preconceived notion that employee financial benefits stop with a paycheck and a retirement account. With 75% of Americans living paycheck to paycheck and 56%  with less than $10,000 in retirement saving, the thought of retirement doesn’t even cross their mind as an option. In fact, more than half of Americans say that they don’t see retirement as an option for them. So how valuable is that expensive employee benefit, if employees struggle, or can’t, participate?

Experts tell us that the majority of the financial products a person has in their lifetime are provided by, or are the result of employer-sponsored programs. Which makes sense considering employers provide or give access to 401K, college savings, IRA’s, HSA’s and in some cases credit unions to distribute earnings to. The problem with having the best benefit programs in the world? If your employees can’t find the means to invest or pay for them, it’s just wasted company resources and money. 

Have you ever heard the saying, “The definition of insanity is doing the same thing over and over, and expecting different results”? This is true of many employer “financial education” initiatives; they concentrate on the long-term (retirement), when 75% of employees are concerned about paying their next car payment, the mortgage/rent, or putting food on the table. In order to help employees visualize a happy, retired future, they need to be able to find financial balance, today. 

CNBC reports that 55% of employers provide some sort of financial related education for employees, but only 25% of those provide education on debt management or budgeting (26%). With the rising costs of financial stress and distress to employers, and the available resources for free, no sales, no obligation  financial wellness programs that exist today, there is little reason left for employers to not take the added steps to help employees manage their paychecks.  

There’s a simple truth to employee financial wellness: Happy employees are more productive. And that’s something we can all feel good about.

 

 

Jeremiah DeGollon, AVP of Business Development at Summit Credit Union in Madison, WI, where he oversees Summit’s CUatWork financial wellness and education program and partnerships. He is a published author and expert in financial literacy and education programming, speaker, mentor, and corporate consultant.

Join us in for one of our collaborative half-day trainings devoted to enhancing your financial wellness initiatives.

 

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Call us: 262.696.3656
Email us: wcwi@wellnesscouncilwi.org.

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