Employee health and wellbeing is a top priority for HR professionals. It can be easy to spot physical illness or signs of stressed behavior in someone, but not all issues are quite so apparent. Financial distress can be harder to identify but is increasingly common and leads to a lack of productivity and absenteeism. Many employees have never taken a personal finance course or used free personal finance software. Instead, they may look for their financial support and education from a source such as the Reddit personal finance blog. While not a bad place to blog, trying to get a personal finance education from a blog is not the most effective way to learn.
The good news? You have the power to assist your employees in bettering their financial situation. Here are some common financial hardships and how employers can help end employee financial distress:
Types of Financial Issues Experienced by Employees
It is easy to make an assumption that employees are paid, so they shouldn’t have financial problems. This is far from the truth. Your employee may have serious financial challenges that prevent them from enjoying their work and their life outside of the office. 85% of employees are living paycheck to paycheck.
Many millennials are having trouble navigating today’s financial world. They’re facing challenges that previous generations haven’t experienced when it comes to buying their first house, tighter credit, higher student debt, and perceived home affordability. They’re paying rent, unable to save to buy a home, and in need of financial guidance. On top of these financial hardships, spikes in inflation coupled with low to no pay increases are taking a toll on millennials’ financial health.
Double Debt Dilemma
Student loan repayment is a major issue for some older borrowers. They’ve financed themselves and possibly their children through higher education and are facing increased interest rates on 401(k) loans. That student debt has not only accumulated, but in some cases, increased if they or the child wants to advance their education with certificates or advanced degrees.. The number of people with 401(k) loans and some sort of student debt is rapidly increasing.
As boomers near retirement, many of these older borrowers cannot see a way out of clearing student debt. The double debt dilemma is that not only are they carrying student loans but that they are carrying mortgage debt.
Boomer Borrowers With Student Loan Debt
Many boomer borrowers specifically are caught in a debt spiral and that involves student loans. This age group usually has other financial commitments to add to their financial distress. At a time when they should be looking into retirement, they’re now facing years of financial hardship. Whether they are still repaying a student loan debt or have kids moving back into the home and creating an increase in spend, this demographic faces a significant challenge and pressure from financial difficulty.
Student Loan Repayment Pause Ends
Starting January 2022, student loan repayments are resuming. The end of the student loan repayment pause will undoubtedly negatively impact any employee that has student debt. Millennials are just starting their student debt payments plans and need help and guidance on how to develop a budget, analyze cash flow and pay back debt quickly to avoid interest payments.
Boomer borrowers and anyone else who may have gotten used to not having that monthly obligation now find they have to budget for paying down their debt again. Resuming federal student loan payments could cause significant issues for employees who are likely still feeling the effects of unemployment, healthcare costs, and other financial side effects of the pandemic.
There is an easy way out for your employees. You can positively affect financial wellbeing by introducing the 101 Financial education program where 46% of our students pay off their student loans in full in 2-5 years (including Doctors and other high debt professions).
Workplace FInancial Wellness Programs and Perks
Workplace financial wellness is a perk many employers offer to help their team with the challenges mentioned above. The programs focus on budgeting, building credit, and reducing debt. 101 Financial gives your employees the best personal finance software and an independent personalized instructor.
Support your employees battling double debt, student loan repayments, and more by having a confidential employee assistance service that provides financial education. Employees prefer this to be independent of your other business vendors so there is no perception of a conflict of interest or hesitancy on your employees’ part to disclose financial needs or distress.
These assistance programs work alongside and are an integral part of a comprehensive employee benefits package. If an employee is concerned about mounting debt, they will not be focused on their work.
101 Financial Workplace Wellness
You don’t need to worry anymore how employers can help end employee financial distress. 101 Financial Workplace Wellness introduces budgeting, cash flow analysis and Smart Banking to your employees with simple tools and a personal instructor. Access to a professional, private source of financial advice is a much-needed service that you can organize for your company’s employees.
At 101 Financial Workplace Wellness, we’re qualified to help employees manage the debt and financial hardship that are affecting many older borrowers and those affected by student loan repayments. When your workforce feels their finances are in order, they are happier, more productive, and healthier. Your employees’ health and wellbeing is paramount! Take a step to end employee financial distress at your company.
Ways to Learn More about Personal Finance for Your Employees
Try our free personal finance software calculator on our home page.
Get the free Super-Duper Personal finance book written by CEO Alan Akina. Pass it along to your employees. It’s one of the best personal finance books around.
Get in touch with 101 Financial Workplace Wellness today to start supporting your employees’ financial wellbeing.
TL:DR: Did you know that the Reddit Personal Finance section has over 23M subscribers? Help support your employees today with next gen personal finance literacy.