Move over, financial wellness. It’s time for financial flexibility
It’s somewhat hard to believe that most employees today continue to live paycheck-to-paycheck. Despite the fact that Americans have recovered from the Great Recession a decade ago and that the unemployment rate is the lowest it has been in many years, employees are essentially making the same amount of money they did during the pre-recession “good days” many years ago. Of course, living costs have gone up in this same period.
That means employees are stressed about their finances. They don’t have enough emergency savings for unexpected expenses and struggle to make minimum monthly payments on credit cards and loans. And the problem is bigger than that because their financial stress also distracts them at work. Whether it’s student loans, car payments, mortgage/rent payments, credit card debt, an unexpected expense or some other financial matter that they are worried about, the bottom line is they are spending time at work on these issues rather than doing the job employers are paying them to do.
Thus, employees’ personal financial stress affects employers as well. When employees bring that financial stress to work, it results in low productivity, absenteeism and, in many cases, higher healthcare costs.
Today’s employees want to make their money to do more. Financial flexibility can help them get there.
So what is financial flexibility? It’s the ability to manage expenses and make everyday life affordable. It’s the financial stage beyond living paycheck-to-paycheck. It means being smart about how we use our monthly income and finding ways to make our money do more so that we are able to pay bills on time, take a vacation, have an emergency fund for unexpected expenses and perhaps splurge on something small occasionally. Financial flexibility is the stage between living paycheck-to-paycheck and financial security (a level few employees ever achieve).
Being financially flexible means finding ways to make our money do more by following a monthly budget, being wise shoppers and taking advantage of employer-offered financial wellness tools and voluntary benefits such as financial counseling, student loan refinancing programs, employee purchase programs and payroll-deducted savings programs.
Providing financial flexibility at work
Financial education benefits can help employees with budgeting and debt reduction needs, and over the past several years, growing numbers of employees have begun using the services their employer provides to assist them with their personal finances.
But it takes more to have financial flexibility. While financial education benefits can help employees with budgeting and debt reduction needs, employers should adopt additional voluntary benefits that provide employees the opportunity to have some financial flexibility.