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Resolving Our Love/Hate Relationship With Money

Resolving Our Love/Hate Relationship With Money

| February 08, 2017

 It seems everything you read in the trade journals recently relates to “Financial Wellness” and we’re encouraged that organizations are taking notice of the Mind-Body-Wallet connection.

After all, financial stress is the most prolific type of stress among today’s consumer. It’s effects range from the psychological (insomnia, anxiety, depression and trouble focusing) to the physical (ulcers, migraines, heart attacks and diabetes) and encompass all socio-economic categories and age groups. Go ahead and Google search “financial stress and health” – you’ll find study after study citing the effects of money stress.

A recent article published in Employee Benefits News (EBN) cited a PricewaterhouseCoopers study that revealed “52% of employees are stressed out about dealing with their financial situation” and “64% of millennials say they are stressed by their finances.” Further, the study revealed that, in those who rely on credit cards to purchase necessities they, the variance is quite small between those earning over $100,000 annually (22%) and those earning under $30,000 annually (31%).

"Recently, workplace health and wellness programs have begun to sit up and take notice, as are membership groups and affinity organizations"

Recently, workplace health and wellness programs have begun to sit up and take notice, as are membership groups and affinity organizations. Why now? Isn’t the economy improving? Yes, but it doesn’t seem to matter much.

We believe there are several reasons for this trend and, more encouraging, several ways to show your employees and group members some love when it comes dealing with financial concerns:

  1. Finances are increasingly complex – pensions are dying, and 401k, 403 and 457 accounts need management and attention. Where pensions needed no input from the worker, todays retirement accounts not only require participation, they need attention, understanding of investment accounts and regular review. And that’s just retirement. Take homebuying, college funding, dealing with consumer debt, even insurance – no wonder consumers are stressed about finances!

  2. Millennials are entering the workforce deep in debt – 70% of today’s new college graduates have student loan debt, with the averages balance of more $37,000. What’s worse, of the 44 million Americans with student debt, more than 1 in 4 are in delinquency or default.

  3. Financial literacy education is sorely lacking – consumers don’t know where to turn for fair, honest education about money options. While there are some non-profit organizations working to develop education programs, by and large most financial guidance comes from those with a vested financial interest in the decisions they are attempting to influence.

The result to the employer, employee assistance program, membership or affinity group, is they suffer the associated effects of the financial stress its members are experiencing. EBN explains that, “Nearly half (45%) of those distracted by their finances at work say they spend at least three work hours each week, thinking about or dealing with issues related to their personal finances.” This equates to 4,300 hours of lost productivity for a 100-person company. Wow!

"For all situations, a comprehensive, UNBIASED financial literacy education program can demonstrate your concern for members most pressing financial worries"

For membership groups, they are likely seeing more membership cancelations & reduced product involvement – in short less money coming to the organization – because members simply aren’t able to make room in their budget for more, no matter how compelling the reasons.

For all situations, a comprehensive, UNBIASED financial literacy education program can demonstrate your concern for members most pressing financial worries. A good financial wellness program will likely look like this:

  1. Reactive and Proactive Programs – Some members may have a pressing issue and need to talk it through live with a professional – which is where a live helpline is crucial. However, many others may need ongoing literacy education that focuses on improving one’s financial standing over time. This latter is well suited for webinars, worksheets, self-assessments and financial fitness challenged that shine a light on the financial picture before it becomes a crisis.

  2. No Competing Interests – programs that have other products or services to sell have a hard time staying unbiased when guiding members toward financial success. For this reason, look for a program that doesn’t sell or profit from their own ancillary services, or receive kickbacks or referral fees.

  3. Accredited Financial Counselors – there is BIG difference between an Accredited Financial Counselor (AFC), a Certified Public Accountant (CPA) and a Certified Financial Planner (CFP). In short, the CPA focuses on tax implications of financial decisions and a CFP focuses on investment strategy and estate planning. Both functions are important, but they are no substitute for the member who needs to know HOW to rework finances due to a change in life circumstance (birth, death, marriage, divorce, job change or loss, disability, etc), or how to change financial habits that may have existing all of the member’s adult life. The Accredited Financial Counselor represents the starting point for discussion of a myriad of financial questions. AFCs work as part budget counselor, part financial coach, and part sounding board for the member’s financial goals and aspirations. Armed with a diverse skillset and access to resources that are seemingly limitless, the AFC will give an organization the most bang for its buck.

There’s no questioning the fact that employees and organization members are being affected in a large way by financial stress. This Valentine’s Day, consider showing some love to your organization and look into a benefit that increases health, happiness and satisfaction.