Financial Wellness and the Importance of ‘NOW’

Forbes states that “financial wellness is the ability to have a healthy financial life. It means your debts are payable and you have ample emergency, college and retirement funds. You’re well prepared to handle any financial crisis. [It’s] about feeling good about your financial health now and in the future.”

The ‘now’ is a critical element when helping individuals regain and maintain financial stability. Financial wellness programs and services must help individuals tackle the financial challenges they’re dealing with in the current moment in order to allow them to focus on next steps.

“The more you feel in control of your money, the more you feel in control of the rest of your life,” says Nancy Molitor, PhD, clinical assistant professor of psychiatry and behavioral sciences at Northwestern University’s Feinberg School of Medicine. 60% of adults identify money as a significant source of stress, making it one of the top personal stressors. The Financial Health Institute defines financial stress as “a condition that is the result of financial and/or economic events that create anxiety, worry, or a sense of scarcity, and is accompanied by a physiological stress response.”

Financial wellness is a term used to describe the state of one’s personal financial situation. There are many dimensions to financial health and well-being, including the amount of savings you have, how much you’re putting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses.

To set one’s self up for a healthy financial life, individuals must make an honest assessment of where they stand at the present moment. We often reference the four key pillars to financial health: spending, saving, borrowing and planning. Identifying your current financial health in each of these categories is the first step to improving financial well-being. Financial wellness allows the individual the ability to pursue opportunities due to the stability of having a day-to-day financial system, which includes the capacity to spend, save, borrow, and plan. There are three main categories that you can use to define and measure your financial health:

• Healthy: Individuals exhibit positive financial behaviors that will allow them to be resilient and on track for long-term financial success.
• Coping: Individuals exhibit some positive behaviors but also experience challenges that require significant behavioral change to reach long-term success.
• Vulnerable: Individuals exhibit poor financial behaviors, are struggling and require immediate assistance and behavioral change to adjust course for long-term success.

An employee financial wellness program can help individuals assess the current state of their financial health and provide a roadmap with the support of resources to help them improve their financial well-being. 

There are many benefits when it comes to financial wellness and wellness programs. To be successful, these programs need to do more than just provide education but need to result in employees taking appropriate actions that lead to financial success. Offering education on budgeting and saving needs to consist of more than courses taken and soon forgotten. Individuals should be able to apply what they’ve learned immediately to create positive behavioral change and establish healthy habits through the use of budgeting tools, financial calculators or a savings program. Those that need guidance beyond the initial education can quickly become discouraged without appropriate direction. They want to improve their financial health but they aren’t sure where to begin. Financial counseling from certified professionals can provide the additional encouragement and motivation they need to develop a plan that works for their unique situation. Financial coaches can help individuals work through roadblocks they may feel are preventing them from taking those first positive steps.

Improving employees’ financial wellness will lead to healthier individuals which in turn, benefits the entire organization by creating a workplace culture of motivated, focused employees. Reduced absenteeism, decreased turnover rates and increased employee satisfaction and morale are a few of the benefits financial wellness programs can bring to an organization. 

When is the best time to begin offering a financial wellness program? There really is no better time than NOW. Your employees need financial support. We’re here to help.