Financial Wellness is an integral part of everyone’s life. Essentially, financial wellness refers to effectively managing one’s economic life. It can include different aspects, such as spending while keeping one’s financial capacity in mind, being prepared for emergencies, having access to and making use of tools and information necessary for making sound financial decisions, and planning for the future. Even though it is an important concept, it is often overlooked and neglected.
In fact, 69% of employees are stressed out about their finances, and up to 72% worry about their finances at work. Thus, the concept of financial wellness has become imperative to both employers and employees.
When we talk about financial wellness, it’s best to not limit ourselves to the present scenario. Financial wellness extends well into the future, as it refers to a person’s overall financial health and the absence of money-related stress.
One of the many concepts on which financial wellness is based upon is adopting healthy financial habits in the long run. Adequate savings and spending habits that employees learn during their professional careers can be carried well into retirement years.
When we talk about retirement plans and saving for retirement, it’s not limited to people who will be retiring in a span of 5-10 years. Retirement plans have to be put into action as soon as one establishes their career, at a young age. A majority of young employees might see that, if they calculate, they are significantly unprepared for retirement, and need to save more. Financial wellness is primarily accumulation driven, which has now become an outdated approach, especially with the advent and rise of technology.
Many current wellness programs, however, are ineffective. This is because they focus primarily on providing information or access to additional content or resources, such as:
- Personal financial management applications,
- Financial advisors, or financial coaches.
The problem arises because these alternatives require significant time and effort. Hence, they are rarely accessed by employees and are rarely paired with concrete, actionable steps for extending financial wellness.
When it comes to planning for one’s retirement, sooner is always better.
- New employees make a majority of important financial decisions during company on-boarding. As they tip-toe their way through the HR setup, they choose a retirement plan, set a paycheck direct deposit, and decide on health insurance.
- Another important area where financial wellness programs should be focussed on is promotions or job changes since these are key moments where finances are modified.
Tech & Financial Wellness
Technology plays a crucial role in helping employees plan for financial wellness well into retirement:
- With the development of apps that help employees with direct saving, emergency lending, and financial literacy, this assistance is becoming more digital, accessible, and less time consuming as compared to its conventional, outdated counterparts.
- Features such as chat and personal-goal settings available in these applications allow companies to not only educate but also communicate and engage. This is a revolutionary step because employees need more than just education. They need step-by-step guides that offer instructions on how to formulate and execute a plan.
It’s imperative to understand that these initiatives are not beneficial only for employees approaching the retirement age. According to a recent study, over 67% of millennials have some sort of retirement savings plan. This hints that the younger generation can benefit immensely from a technology-based financial wellness platform with a human touch.
Financial wellness tools can help provide financial balance and adequate knowledge and guidance to set young employees up for success. It is only normal that currently, we see an increasing number of companies desire highly motivated employees with the greatest productivity, enhancing their benefits experience with these tools.
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