In this post we'll discuss four concepts that are essential to financial wellness. All of these core financial wellness concepts go hand in hand. You can't have one without the other and in some ways they build upon each other so it's important that equal weight is given to each concept.
1. Learning To Budget
Proper budgeting is the foundation of financial wellness. Many employees, even those who are relatively well off, continue to live paycheck to paycheck and spend far beyond their means. They don't necessarily do this on purpose either. In many cases they are just genuinely unaware of how much they spend.
In order to teach your employees to budget wisely you need to drive home just how important it is to keep track of spending. Budgeting is not something you do off of instinct. In fact our instincts often turn out to be pretty terrible when it comes to money. You need to be rigorous and analytical when constructing a budget. Consider teaching your employees how to use a widely available personal budgeting program like Quicken.
2. Managing Debt
Once you have a handle on your budget you must learn how to manage debt. In fact, one of the main contributors to excessive debt is the lack of a solid budget. If you don't pay attention to where your money goes and you overspend, you're often left in a position where you need to take on debt just to stay afloat.
Even debt that is considered "good debt", your mortgage for example, can cause issues if not managed properly. When educating your employees about debt management you should pay special attention to interest, as it's a particularly misunderstood concept. It involves relatively sophisticated mathematical concepts and misunderstanding interest can lead to thousands of wasted dollars when paying down a credit card or choosing terms for a mortgage.
3. Understanding Benefits
Benefits may not be brought up in the same sentence as financial wellness often, but they play an important role. Budgeting and saving money both require you to be as informed as you can possibly be about your financial situation and benefits are one aspect of this.
You should do your best to ensure that employees understand what they are covered for and what they are personally liable for. What is their health insurance deductible? What happens if they are critically injured and can no longer perform their duties?
Once your employees fully understand their benefits they will be better equipped to budget for and organize their emergency savings.
4. Saving For The Future
Many Americans don't have enough in savings to cover a catastrophic event and fewer still are thinking about how their lack of savings will impact their retirement. The value of emergency savings simply cannot be overstated. You should teach your employees how to open a savings account if they don't already have one, how to choose the right account, and how much of their budget to put towards their savings.
At Summerlin-Roberts we can help you come up with creative solutions that will reduce the burden of financial stress on your employees. Please contact us today to learn more about implementing financial wellness programs in your workplace.