History shows us that Americans, in general, aren’t the best financial planners when it comes to saving up for what is to come later down the road. All in all, everyday Americans are so deficient at financially planning for their future that, according to the Federal Reserve, four in ten Americans would not be able to afford an emergency $400 expense by themselves. If the everyday American can’t even plan a $400 emergency fund, how does one expect to properly plan for retirement?
Managing one’s own finances can be a very stressful task, especially if you are behind in your savings because playing catchup is never fun. Global surveys have found that stressing over finances can lead to poor job performance and uneasy work attendance among other things. Unfortunately, many employers are unaware of the financial burdens that their employees struggle with and how the lack of financial wellness programs are affecting company performance.
According to USA Today, the average American spends about 90% of their income on various needs such as food and groceries, house payments or rent, and healthcare among other medical bills. After spending most of their money on basic living needs, only a small amount is left for savings. But what is actually occupying most of Americans’ income is student loans. With 7 out of 10 graduates leaving school with student loans, and the average amount of student loan debt being upwards of $40,000, it is no wonder why everyone’s finances are being strained.
Now tie in other costs like credit cards, auto expenses, and child care, financial freedom seems like a far off fantasy. Saving for retirement can pretty much go out the window unless your company has its benefits package up to date with the right tools because Americans already have their hands tied with enough financial obstacles.
Employers can help
More employers are taking an active role in the financial well-being of their employees. About 83% of businesses are now offering some sort of financial wellness program to their employees, which is an increase of over 20% in only two years.
Offering student loan repayment assistance is one way that employers are taking a meaningful chunk out of employees’ student debt. Monthly contributions to student loan debt by employers helps shave off 8.5 years in interest payments, on average. Getting rid of Americans’ single largest financial stressor is definitely a giant step towards financial wellness, which, in turn, benefits the company as employees enjoy a stable and supportive working life.