Financial stress among American workers is high, particularly among millennials, a group that makes up 35 percent of the U.S. workforce.
A study by Payoff shows that one in four Americans and one in three millennials suffer from a condition known as Acute Financial Stress (AFS). Study author Dr. Galen Buckwalter suggests that there is virtually no difference between the symptoms of AFS and a more well-known condition known as Post Traumatic Stress Disorder (PTSD).
Surveys by the American Psychiatric Association indicate that millennials (born between 1981 and 1996) are the “most anxious” generation, which some experts attribute to that group being worse-off financially than their parents. Millennials have lower employment rates, larger student loan debts, and are less likely to own a home than previous generations at the same age.
Do millennials want financial education?
Although stressed about finances, millennials send mixed signals about their desire to learn how to become financially sound.
In a recent study, “Millennials’ Engagement with Online Financial Education Resources and Tools: New Survey Insights and Recommendations,” George Washington University’s Global Financial Literacy Excellence Center found that:
- 55 percent of millennials grasp basic financial concepts, but only 25 percent are truly financially literate
- 92 percent state they would like to be better at money management
- 40 percent believe they don’t have enough money to worry about financial education
- A majority only seek financial education when the need is urgent
- One-third feel that money is a private matter and dislike discussing it even with friends and family
More than half of millennials say they find it hard to be financially responsible even when they have the right information.
Ironically, this digitally connected generation often feels like they don’t know where to turn for financial information. This could be due to their mistrust of online financial resources. The GFLEC study shows that just over half of millennials either don’t trust or are not sure if they trust resources found on the Internet. Nearly one-third of millennials also believe that information with value is not available for free and will be too expensive to use.
Of those who do not seek out financial information:
- 18 percent believe the answers will be too complicated, with another 2 percent believing there will be too much math
- 12 percent didn’t know they should be looking for information
- 8 percent were too afraid to confront their personal finance choices
Offering a financial wellness program
Employers now recognize the cost of financial stress to both the company and their employees. Financially stressed employees often engage in unhealthy behaviors, suffer from physical and mental health issues and don’t perform well at work.
All of this leads to absenteeism, which one study determined costs businesses $118 billion yearly.
Employees want to learn about finances. A Metlife study shows that a strong majority of employees (84 percent) want to see that help come through free employer-sponsored financial wellness programs with classes in such things as retirement planning, student loan reduction, emergency savings, budgeting and identity theft.
And for those participating in these programs, 65 percent have found them useful by helping them get their spending under control, paying off debt, preparing for retirement and more. But what can employers do to get millennial employees on board with financial wellness education?
The answer may lie in another finding from the GFLEC study. Seventy-eight percent stated that they prefer to learn about financial topics from videos found online or via mobile apps. However, according to the survey, offering videos and other online financial information will not be enough to ensure millennial participation.