Money and finances play a very important role in our lives. Money serves as a medium of exchange to facilitate various transactions and run our lives. Financial wellness is mainly associated with the control and management of your finances. Financial wellness can otherwise be said as “financial well-being” and refers to the financial health of an individual.
In other words, financial wellness can be said to be the various ways in which finances of individuals intersect with their physical, mental and social wellness. It refers to how secure an individual’s money is given all the variables involving around an unknown future.
Financial wellness is beneficial for you as it frees you from one of the most important concerns – MONEY. Here are some of the effects which financial wellness brings in its wake
Quality time spent with family members
Better productivity at work
Increased attention and focus on the different aspects of life
Peace of mind
Financial security for the family even in your absence
Job promotion due to increased productivity and skill, etc.
Even famous writers, actors, philosophers, novelists, entrepreneurs, political leaders and other well-known figures have stressed on the importance of financial wellness. Let’s see what some of the famous people had to say about the different components of financial wellness
Financial wellness quotes on careful spending
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver”. – Ayn Rand
“A budget is telling your money where to go instead of wondering where it went”.- Dave Ramsey
Building blocks of financial wellness
Now that you know the main components of financial wellness, there is another viewpoint for achieving financial wellness. It can be said without a doubt that financial wellness is the outcome of financial independence, which, in turn, is the outcome of financial literacy.
If you are financially literate, you would know how to manage your money and invest it in avenues which help in fulfillment of your financial goals. With the application of financial literacy, you can achieve financial independence and an individual having financial independence is said to be financially well.
Financial wellness quotes on financial literacy
“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed”.- Edmund Burke
“The number one problem in today’s generation and the economy is the lack of financial literacy”. Alan Greenspan
“We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate”. – Robert Kiyosaki
“Those who master money are free to serve others still mastered by it”. – Orrin Woodward
“Financial education is more valuable than money”.- Mac Duke
“People with low financial literacy standards are often unable to take their ideas and create assets out of them”.- Robert Kiyosaki
“Most people should learn to tell their dollars where to go instead of asking them where they went”.- Roger Babson
“Every financial worry you want to banish and financial dream you want to achieve comes from taking tiny steps today that put you on a path toward your goals.”- Suze Orman
“If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life”.- Billy Graham
“Know what you own, and know why you own it”. – Peter Lynch
“Lack of money is no obstacle. Lack of an idea is an obstacle”. – Ken Hakuta
“Being promoted to a top position in your organization, or even being elected to a public office, does not suddenly endow you with financial literacy, if you did not acquire and develop it, earlier in your life.”- Strive Masiyiwa
“While good business ideas are plentiful, many entrepreneurs struggle to understand payroll taxes, health care, and other thorny issues. In other words, they don’t have the financial literacy to scale their businesses and attract investors.
These quotes show that financial literacy is important if you want to be successful in whatever you do and if you want to lead a financially free life.
Financial independence has also been stressed upon by eminent individuals since it is the precursor to financial wellness. A financially independent individual is a financially well individual. Both financial independence and wellness go hand in hand.
Quotes on financial independence
“If you want to be financially free, you need to become a different person than you are today and let go whatever has held you back in the past”.- Robert Kiyosaki
“If you are not financially independent by the time you are forty or fifty, it doesn’t mean that you are living in a wrong country or at the wrong time. It simply means that you have a wrong plan.
“More important than how we achieve financial freedom, is the why. Find your reasons why you want to be free and wealthy”.- Robert Kiyosaki
“If you will make the sacrifices now that most people aren’t willing to make, later on, you will be able to live as those folks will never be able to live”.- Dave Ramsey
“The best thing money can buy is financial independence”.- Rob Berger
“The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.”- Robert Kiyosaki
“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this”.- Dave Ramsey
“Working because you want to, not because you have to is financial freedom.”- Tony Robbins
“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life”.- Suze Orman
“I believe that through knowledge and discipline, financial peace is possible for all of us”. –Dave Ramsey
Financial wellness is a big concept. It is like looking at the bigger picture but when you do that you cannot ignore the smaller bits which help in making the picture whole. Spending carefully, budgeting, saving, financial literacy and financial independence are these smaller parts of the bigger picture of financial wellness. So, understand the importance of all these smaller parts so that the big picture is whole and complete.
The above-mentioned quotes are motivational in nature and also stress the importance of each component of financial wellness. So, if you want to understand how to achieve financial wellness, use these quotes to your advantage and keep motivated in making yourself financially healthy.
What constitutes a good workplace? Is it a high salary package or a range of employee benefits?
In today’s age, when attracting good employees has become a race for employers, merely offering a good pay package or employee benefits is not enough. Employers need to ramp up the value-added benefits that they offer to their employees if they wish to promote loyalty and better productivity. One such employee benefit, which is slowly gaining prominence in today’s corporate frame-work, is the concept of the financial wellness of employees.
Who are financial wellness consultants?
Financial wellness consultants are individuals or companies which conduct financial wellness programs for the employees of an organisation. Financial wellness consultants have thorough professional knowledge about all the aspects of finance and how financial management can be undertaken. These consultants devise a financial wellness program for the employees which provide financial help and consultation to all the employees.
Moreover, financial wellness consultants also offer personalized services to employees who would like assistance in managing and handling their finances. Thus, financial wellness consultants are, in reality, financial coaches for your financially challenged employees.
As mentioned earlier, financial wellness programs are still in their nascent stage in India. However, employers looking for financial wellness consultants would still be able to find multiple options as the concept is fast catching on. So, if you are looking for some of the best financial wellness consultants for your organisation, here are four of them to choose from
Mercer is a multinational company which offers a range of employee benefit programs, including financial wellness programs. The company is present across 44 countries and is a leading name in providing financial consulting services. Mercer’s financial wellness programs are tailor-made to suit the requirement of employees of different types of organisations. Mercer also believes in fostering financial literacy and helps employees have better control over their finances.
Getting You Rich
This is a relatively new company which was founded in Mumbai in the year 2012. The company specializes in professional financial consultation and in conducting employee financial wellness programs. They allow employers to download their e-book free of cost which outlines the importance, need and the method of employee financial wellness. The company has conducted many financial wellness programs in India for reputed clients which include Hindustan Unilever Limited, Reliance Industries Limited, Capgemini, Randstad, TCS among others.
Vinod Desai is a noted author whose works on financial literacy and habits have found many takers. He conducts employee wellness programs for companies and the program is called the Moneyplanting Program. The program stresses on the basics of investing and handling finances. Vinod Desai’s employee financial wellness programs have different modes.
There is a 4-hour boot session camp which teaches the basics of finance, a 1-day essential program for a deeper knowledge and a 2-day comprehensive program for a complete understanding of financial matters. Employers can also test the program’s effectiveness through a 2-hour long talk session which outlines the program details and its need.
Another Indian company, ArthaYantra believes that employee financial wellness is of utmost importance for corporates if they want to be profitable and competitive. ArthaYantra’s financial wellness programs have been recognized the world over with the company earning many awards under its belt.
The company’s financial wellness program for employees is defined in four main words:
Objective – which shows that the program is objective-driven and works towards employee’s financial wellness
Customized – which shows the flexibility offered by the program to be customized as per the needs of the organisation
Scalable – which shows that the program can be easily measured
Outcome-driven – which shows that the program has a focused approach to the outcome which it yields.
Corporates can, therefore, create an effective financial wellness program for their employees with the help of ArthaYantra’s programs.
How to choose the right financial wellness consultant for your company?
Employers can choose any of these financial consultants to develop a financial wellness program suitable for their employees. However, before zeroing in on the best financial wellness consultant, you should take care of the following:
Find out how financially prepared your employees are. Take a financial wellness survey to judge the financial health of your employees. This survey would give you the data of how financially free your employees are and the areas around which the program should be developed.
Make sure that the program is customized as per the needs of your employee. This would make the program effective in tacking the exact financial problems that your employees face.
Make the financial wellness program incentive-based to increase participation. Though the program is aimed at making the employee financially empowered, its importance might be lost on some of the employees. By providing employees with the promise of incentives you can ensure maximum participation to get the maximum benefit from the program.
Try and make the program an ongoing activity. Financial wellness is not a mean feat. It needs time and dedication. Only when your employees are regularly updated about the program and taught financial practices on a continuous basis would they be able to achieve financial wellness.
As an employer, you know what your employees need and its time you put their needs into focus to propel your business to new heights. A happy employee is a happy workplace and what better way to promote the happiness of employees than by making them financially free? So, choose a suitable financial wellness consultant for your organisation and motivate your employees to participate in financial wellness programs.
What comes to mind when you hear ‘April’? The start of the new financial year, perhaps!April is the month when the new financial year starts and businesses plan their yearly fiscal target.The employees are briefed, plans are created and all possible actions are taken to ensure that the year starts on a good note. What about financial wellness? Is it given any consideration when the new financial year starts?
In foreign countries, January is considered to be the financial wellness month as this is the month when the new financial year starts. In this month, employers aim to make their employees financially healthy so that their productivity increases.
In India, however, April is the financial wellness month as the financial year starts from April. In India, the concept of financial wellness of employees is slowly gaining traction as multinational companies are bringing this practice to their Indian offices as well. Nowadays, the millennial employee not only looks at the salary package that the employer promises but other value-added benefits of employment. Among such value-added benefits is the concept of financial wellness and how employers aim to institute the concept in the workplace. Do you know what financial wellness is all about?
The concept of financial wellness
Financial wellness is defined as the financial health of an individual. An individual is said to be financially well if he has control over his finances and knows how to manage them and make them fulfil his goals. Financial wellness also signifies financial independence and is essential for every individual to achieve to lead a fulfilling life.
The concept of financial wellness month
In India, as mentioned earlier, April is considered to be the financial wellness month. The month of April marks the beginning of a new financial year and is thus, the best time when the employers can motivate their employees to plan for a healthy financial future.
Financial wellness month is a reminder to maintain healthy habits related to money management. April 2020 marks not only the financial wellness month of the year but also of the entire decade and needs to be heralded with fanfare.
Planning for financial wellness month by employees
Individuals can consider April to be a landmark in their calendars and take steps towards their financial wellness. Here are some things which employees can do to strengthen their finances and make April count –
Individuals need to earmark their monthly spending and create a budget. Unnecessary expenses should be cut down and the budget should be followed to ensure there is no unnecessary spending. Half the financial battle is won if individuals correct their spending habits. Spreadsheets, personal finance applications, etc. can be used to track and monitor spending and to weed out unnecessary expenses.
Saving is essential to create a corpus to meet the different financial goals of life. An emergency fund is a must for meeting certain unexpected and unprecedented expenses. Once an emergency fund is created, individuals should start saving for their short term and long term financial goals. Once the short term goals are saved for, savings for long term goals should be sped up to create a substantial corpus when the need arises.
Availing debt should be avoided. However, some debts, like home loans, are essential in fulfilling financial goals. Moreover, these loans can also prove advantageous in building up a good credit score, giving tax reliefs, etc. So, individuals should borrow only when needed and good loans should be given precedence over bad ones. Also, individuals should avoid falling into a debt trap. Any subsequent loan should be taken only when the previous loan is paid off or is nearing repayment.
Investing is an effective tool that can be used to build wealth and save for the future. There are several investment avenues available such as debt mutual funds, equity mutual funds, fixed deposits, National Pension System, RBI taxable bonds, etc. which can be of great help for individuals in the future.
Successful management of finances will not only make individuals feel that their finances are in control but also ensure their financial well-being.
Major activities which can be done during the financial wellness month 2020
April 2020 is round the corner and some serious financial planning should be done in this month to start the quest of financial wellness. Here are some activities which should be undertaken by employees and individuals to achieve financial wellness –
Writing down financial goals
What is the use of financial planning when there is no particular plan in place? Failing to plan is planning to fail and demarcation of goals is necessary if you don’t want to fail. The financial wellness month is the best time when employees can sit down and review their finances. Employers should motivate their employees to jot down their financial goals so that a proper financial plan can be envisioned to fulfill such goals.
Once the goal planning is done, the next step is to identify the cash flow. Individuals need to know their incomes and the expenses where the income is being allocated. This would give them a clear idea of how much funds they have at the end. This fund can then be channeled into investments for growth.
Once the amount of disposable savings is ascertained, it is time for investment. Investments are the only way to create wealth which would prove sufficient to fulfil the demarcated goals. Individuals should choose proper investment avenues depending on their risk appetite, investment horizon, tax planning and investment strategy.
Activities which employers can do this financial wellness month in 2020
Employees are the greatest asset of an organization and so, employers should promote the importance of financial wellness month among their employees.
Employers should be aware enough to drive the importance of financial wellness home for their employees. Thus, in this financial wellness month, employers can also take steps to ensure that their employees are financially healthy.
Some of the major areas of financial wellness where employers can lend help in the coming financial wellness month include the following
Boosting retirement planning
It is a very common observation that most employees do not have enough savings for their retirement. If the employees are covered under the EPF scheme, they think that they are creating a sufficient retirement corpus. This might not be true. Since inflation is steadily increasing, employers should help employees create a considerable retirement fund. Employers can contribute to NPS schemes for their employees which would not only boost the retirement fund of employees, it would also give them tax benefits.
Providing group health insurance schemes
Employers should also provide their employees with group health insurance schemes which would take care of their healthcare costs and spare them the high medical costs.
Building the overall financial literacy of employees
It is a fact that in reality the financial literacy rate is quite low and employees do not wish to get into the nitty-gritty of finances. Employers must take initiatives to make employees interested in financial education and in improving their financial literacy rate. This can be done by providing employees with educational tools and materials related to financial benefits and wellness. There are various apps and platforms available which can give employees a clear understanding of the financial decisions they should take, any investments which they should make which would be profitable for them.
Financial wellness month April 2020 can be used by the employers in developing personalized communication with the employees so that their benefits satisfaction is enhanced. Employers must tailor the financial educational tools to the specific financial needs of the employees. By personalized communication, a clear assessment of the financial needs of the employees can be done so that proper financial tools can be deployed by the employer.
Financial wellness surveys
Employers can use financial wellness surveys to help understand the financial health of their employees. You can provide incentives to employees to participate enthusiastically and record their answers. The answers can then be collated to find out the current financial health of employees and the steps which can be taken to improve it.
As mentioned earlier, there are various financial wellness programs available in the market which help an organization to boost the financial wellness of its employees. Employers should invest in such programs so that their employees learn about their financial health. Such programs also equip employees with the necessary tools at their disposal to achieve financial independence. Employers should ensure that the programs are customized to meet the needs of their employees. The programs can be customized by using the financial wellness survey and the answers recorded therein.
Ensuring the financial wellness of the employees at the workplace is a win-win situation for both employers and employees. Financially healthy employees would always be a great asset for an organization and an employer must try to remove all the obstacles which stand in between the employees and their financial wellness.
Well begun is half done and if the new financial year is started on a high note, the employees would be motivated and more productive. They would be able to handle their finances more effectively which would free them from financial stress. A stress-free employee is the best asset of the company with increased focus and productivity.
Thus, this financial wellness month 2020 can be used by the employers to implement some changes into the employee financial wellness programs, motivate employees to spend smartly and for giving the employees necessary tips on handling finances tactfully to have a successful financial year ahead.
In an employee survey conducted by PricewaterhouseCoopers (PwC) in the United States of America in the year 2019, the following were discovered:
59% of the participants claimed that they were stressed about their financial conditions
49% of the participants stated that they had difficulties in meeting their monthly household expenses
More than 80% of the workforce believed that they would have to work post-retirement to meet their financial needs
88% of the participants needed little or complete help in planning their finances
These numbers show the low level of financial wellness among the employees of today. Closer home, in a talk show called ‘New paradigms of financial wellness’ industry leaders agreed that employers should start building up a well-defined plan to create an effective financial wellness ecosystem so that their employees remain motivated.
Let’s learn about financial wellness programs in India!
Financial wellness is a relatively new concept in modern-day India. However, given the financial stress faced by employees and its adverse effect on productivity, the term would soon become the new age mantra for corporate all over India. In fact, many companies, in recent times, have emphasized upon the concept of financial wellness for their employees and have introduced various programs for the same. What about you?
What are financial wellness programs?
A financial wellness program is basically a program where employees are taught financial literacy and financial management. This helps them take control of their finances and plan an effective financial portfolio which would give them financial independence. In simple terms, financial wellness programs intend to provide financial education ultimately leading to an increase in financial well-being. When introduced by the employer, financial wellness programs help destress employees from financial concerns. This makes employees motivated, productive and more loyal towards their work.
A good employee financial wellness program would include important information, training, and support related to the financial concerns of the employees. Some of the major aspects which are included in the corporate financial wellness programs can be listed as mentioned below.
Household and personal budgeting
Consumer debt reduction
Student loan repayment management
Emergency and short-term savings
Setting up of financial goals
Financial crisis management
Top financial wellness programs in India
According to a health and well-being study conducted by Willis Towers Watson, 63% of the employers have started developing a strategy towards the improvement of the financial well-being of an employee. If your company also wants to introduce employee financial wellness programs, here are some options to look at :
LearnLux includes a combination of digital lessons and interactive tools with on-demand financial advisers. This helps in providing the employees with ideas on independent financial wellness at the workplace. The major aim of this employee financial wellness program is to ensure that employees make their financial decisions due to education and not due to fear. The LearnLux financial wellness program helps in providing corporate employees with customized lessons related to financial wellness and advanced reporting.
This is one of the top financial wellness programs in India which can help out the employees in the improvement of both their short-term and long-term financial health. FinFit helps in improving the financial wellness of employees in an organization by providing a self-directed online experience. FinFit provides financial assessments, financial education resources and financial coaching to the employees which helps them in increasing their financial behaviour and also in managing their finances better.
Money Experience is an educational technology organization that helps in providing financial education to youngsters and adults. The financial education courses are available on Money Experience to help in providing a personalized approach towards financial education by giving importance to decision making and quality of life. The personal financial products which are available at Money Experience provide a unique approach towards financial education and are one of the best financial wellness programs in India.
Edukate is a platform that creates financial benefits that can help in the creation of a very confident and productive workforce. The employees can get proper guidance and knowledge on financial benefits and thus, be a well-engaged workforce. Edukate helps in engaging the employees in a way they choose to be engaged, provides them with solutions for the financial issues they are facing and thus connecting them with benefits offered by the employers.
Banzai deals with creating financial education solutions that would help employees with real financial advice when the need arises. Banzai creates a platform where employees can learn about financial discipline and principles that are related to fiscal responsibility. The major objective of Banzai is to provide corporate organizations with tools that help in creating a culture associated with financial education. This financial wellness service provider has its sole focus on financial literacy and keeps on continuously refreshing and updating new products associated with employee financial wellness programs.
Bravo is one of the top financial wellness programs which offer group challenge that help employees in addressing issues related to their financial wellness. This financial wellness program has an eight-week challenge which helps the employees in understanding their financial life. The major topics which are mostly addressed by this employee financial wellness program are how to spend within control, how to create an emergency fund, how to manage and pay debts, etc.
Nowadays, most employers understand the importance of good financial wellness programs for employees of their organization. However, some employers struggle to develop integrated and effective employee financial wellness programs. So, before implementing financial wellness programs for employees here are some effective ideas that would help implement good corporate financial wellness programs.
Since financial wellness programs are slowly garnering traction from Indian corporate houses, many companies are offering tailor-made programs for corporate employees. Some of the best companies globally which offer the most comprehensive and customized financial wellness programs for employees are as follows –
GreenPath Financial Wellness
The employees of an organization might be facing any financial problems; the financial wellness programs at Green Path would be able to assist in resolving those problems. The Green Path Employee financial wellness programs will offer employees access to a variety of services. Employers can rest assured about the financial health of their employees as the Green Path team would provide the employees with financial counselling, one-to-one guidance while credit score management, development of the financial plan, budget management and debt elimination. The employee financial wellness programs at Green Path will help the employees in managing their debts by the use of various financial educational resources.
Employers can decide on the type of method which would be used to impart the education on financial wellness to their employees. This can be through the use of online education modules, webinar workshops, on-site events, etc. The on-site events offered by Green Path are quite helpful as the employees can get to know more about the measures involved in handling finances in an in-person environment along with the scope of query resolution and detailed information. It is also quite easy to start working with the Green Path team as they provide staff training along with a plan for the implementation of the financial wellness program smoothly.
Financial Finesse is one of the oldest companies providing the best financial wellness programs. The company has been able to impact the financial lives of employees from all phases of life. The company has proven that financial wellness programs when delivered properly in an effective manner can be helpful in the transformation of the financial future of the employers and the employees both.
Financial Finesse can understand the requirements and needs of the employees easily and would design financial wellness programs in such a way that the employees can obtain unbiased financial advising whenever the employees would need and in their style of learning. Moreover, the company has the best financial advisors who have specialized certification in the fields of financial management.
Enrich Financial Wellness
Enrich financial wellness help the employers by providing education to the employees on the strategies related to personal finances and retirement. The various tools and resources offered by the Enrich Financial wellness help the employees in taking necessary financial decisions whenever needed in life.
The various financial research documents published by the company help the corporate employees to understand the need and importance of financial education at the workplace. The company also has the provision by which it can provide a list of the best practices which can be a part of the client organization’s financial wellness platform. Moreover, webinars help in providing good knowledge of financial wellness to the employees. Furthermore, employees of the organization can take financial advice from certified financial counselors whenever needed.
This company has been founded by a group of highly experienced financial advisory professionals who are always available for advising the staff. The advisors can very easily design and deliver personalized financial wellness programs for the employees of the client organization.
The company has a large amount of online content available for educating users about financial wellness and other financial topics. Questis aims at targeting larger organizations to deliver scale and put forward the content related to employee financial wellness in front of a larger audience.
Integrity Data Financial Wellness
Employers can opt for Integrity Data Financial Wellness when they wish their employees to receive concrete financial help concerning all financial issues. Integrity Data can help in setting up financial wellness programs that help in reducing the stress of the employees, increases employee engagement, enhances employee retention, etc. Integrity Data is known for its holistic financial wellness programs and would help the employees in getting their money and flexibility. In addition to the educational resources, the Integrity Data financial wellness programs offer helpful partnerships that help the employees of the client organization to stand up on their own feet.
Integrity Data has established partnerships with Best Money Moves which is one of the best corporate financial wellness programs available. By this partnership, Integrity Data can offer a mobile service to the client organization’s employees who can measure their level of financial stress. Then Integrity Data also has personalized recommendations to reduce the financial stress of the employees. Moreover, it also has a partnership with Got Zoom and Hoopayz and these platforms help the employees with student loan repayment assistance and maintenance of the health and well-being of the employees.
Cost of financial wellness programs
There is nothing like a free meal and financial wellness programs also cost employers. There is however, no absolute value which can be assigned to a financial wellness program as each program is tailor-made for the corporate’s requirements.
The cost of a financial wellness program is determined by various factors as below:
Size of the organization
When an organization has a large number of employees, then the cost of an employee financial wellness program for each employee will lower down. The main reason behind this is the economies of scale which means that with the increase in scale there is a decrease in the cost per unit. The main reason behind this decrease is co-related to the administration of the financial wellness program.
There are many administrative elements in the employee financial wellness programs which do not take additional time or even cost more money even when the number of participants increases. So, since some costs remain fixed, when the number of employees increases, the cost of the employee financial wellness program goes down.
However, for large organizations which have multiple branches spread across India, the aggregate cost of the program would be high.
Some companies offer account management along with employee financial wellness programs. This account management can be done either with the help of computer software which would include data compilation and making suggestions for implementations. It can also be feasible with the help of a certified/trained professional or a group of professionals who would be working with the employees of the client organization.
These services can include tasks like training key stakeholders, maintenance of records, providing of various reports on the real-time deliverables, management of outgoing communications and promotions, helping or assisting employees with queries on the programs, etc. These services are personalized and would be more expensive.
The comprehensiveness of the plan
If an employer chooses a comprehensive financial wellness program which not only addresses the concerns of the employees but also offers them personal financial solutions, the costs would be higher. The cost of a financial wellness program depends on the areas covered by the plan and how inclusive the plan is. The more inclusive the plan, the higher would be the cost and vice-versa.
Usually, employers do not prefer customizing the employee financial wellness programs and most of the employers think that a retirement plan along with an education plan is sufficient for the employees. However, the fact remains that employees face a wide array of financial issues in everyday life and would need assistance in resolving those issues. Employee financial wellness programs would be beneficial only if they are customized and focus on both the short-term and long-term financial goals of the employees.
Moreover, if employers are opting for custom employee financial wellness programs then they would also want those financial wellness programs to be customized according to the needs of the organization with a variety of branding options. Custom employee financial wellness programs would yield better results and are expensive at the same time.
A company offering the program
Different companies which offer financial wellness programs have a different pricing policy. That is why the cost across the companies differs. You should compare the plans offered by different companies and their respective pricing to find the best deal on the financial wellness program.
Duration of the program
The last factor which affects the cost of financial wellness programs is the duration of the program. A long program is usually more comprehensive and costs more. Shorter programs, on the other hand, are less costly. So, understand the needs of your employees before choosing a program of a suitable duration and the cost would be calculated accordingly.
The backbone of an organization is its workforce. The organization cannot function or be profitable if there are no employees. If the employees are financially unhealthy, it would lead to a lack of focus in the workplace, absenteeism and lower productivity. Thus, the organization benefits the well-being of the employees. If the employees are financially well, the organization would be financially well too. So, if you want your business to reach new heights, its time you helped your employees become financially independent. Financial wellness programs are here to stay and the sooner you opt for a program for your company the sooner would you be able to boost employee morale.
With the changing times the mindset and expectations of employees have also started changing gradually. Today, your employees are the millennial and their expectations from the organization can be referred to as ‘out of the box’ expectations.Gone are the days when your employees were satisfied by simple health insurance policies or retirement plans. Now, you need to think about some distinct methods and unique benefits by which you can achieve employee satisfaction in your organization.
One such creative method for your employees can be making your employees aware of their financial wellness.
What is financial wellness?
In very simple terms, financial wellness means the art of efficiently and successfully managing one’s economic life. Financial wellness is a combination of knowledge about your finances, making good financial decisions and consolidating financial decisions into other important aspects of your life. Moreover, financial wellness means the capability of managing efficiently the short term finances and making preparations for achieving long term goals simultaneously. Money plays a very important role in our lives and it has to be managed in a very wise manner.
The very simple concept of financial wellness encloses some of the below-mentioned major factors.
1. Making a proper budget and spending according to the budget.
2. Keeping a concrete track of expenses.
3. Being prepared financially for any kind of emergency.
4. Having a perfect plan for the future.
5. Being well-informed about the information which can be used in making correct financial decisions.
Signs of Financial Wellness
Some of the major signs of financial wellness can be listed below such as
1. Having sufficient money to meet the necessities.
2. Being able to afford medical and health care facilities.
3. Sufficient savings for post-retirement life.
4. Being able to afford a good living standard.
5. Complete control over one’s own financial situation.
6. The level of financial stress is low.
However, the fundamental concept of financial wellness is financial security which is one of the most common motives of employees all over. So, it becomes quite important for you to impart knowledge about financial wellness and financial security to your employees.
This would help your millennial employees in making judicious plans for the achievement of their long-term financial goals and would even lower their levels of financial stress.
Financial stress is one of the major factors of stress with the employees in most organizations today. Challenges in debt re-payment, cash flows, monthly expenditure management, no adequate retirement planning, etc. are some of the major financial challenges your employees are facing in their day-to-day lives.
According to many global survey reports, employees in several organizations face the issue of financial stress due to a lack of proper financial management and financial literacy.
The majority of employees in various organizations use their corpus saved for retirement for meeting other daily expenses of life. Even many employees postpone health care issues for financial reasons and many contribute only a meager amount from their income towards retirement funds. These reasons of financial stress can affect the productivity of your employees and even your organization.
When your employees are under financial stress, this will affect the productivity in your organization. Financial stress in employees leads to increased absenteeism within the organization. When your employees are under stress for their finances, they are likely to miss coming to work very often.
So, when your employees are not at their workplace it means you are behind in catching up with the production goals and there is increased stress at the workplace due to ‘filling in’ for absentees. Even when your stressed employees are present in the office physically they are not present mentally and are not working at their complete capacity. This will hamper the productivity and the business of your organization.
With these adverse effects of employee’s financial stress, you need to emphasize your employee’s financial wellness and bring awareness among them for this.
The major three elements associated with financial wellness can be listed as below.
1) Financial health
Financial health refers to a term that can be used to describe an individual’s financial situation. It means a way or a method to measure the financial aspect of an individual. The financial health of your employees involves several dimensions along with them such as savings of your employees, what are the fixed expenses and how much your employee tends to save in a month.
Self Assessment of Financial Wellness
As a part of exposure to financial wellness for your employees, you can suggest them to assess their financial health. They can perform a self-assessment of their financial health by asking some of the below-mentioned questions themselves.
a) Do they have an emergency fund to meet the unprecedented circumstances and events?
b) Are they saving properly for their retirement? Will those savings be adequate to achieve their long-term goals?
c) Do they have adequate insurance cover i.e. either health insurance or life insurance?
d) Is their net worth positive or negative?
e) Do they have all the necessities and how about the luxurious things which they want?
Your employees can have strong financial health if they have a steady and constant flow of income with very few changes in expenditure formats, investments with strong returns made and growing cash balance. Moreover, you can even suggest some tips about improving their financial health by proper budgeting, building a contingency fund that can be used in case of emergencies and paying off the debts they have as soon as possible.
2) Financial well-being
The financial well being of an employee is his attitude about his financial situation. It is about the successful management of their finances to achieve their short term and long-term financial goals. Financial well being means to be in a state where your employees have control over their finances, can face a financial shock along with the freedom about making financial decisions. If your employees are focusing on their financial well being, they are paving a path for their financial security.
Some simple ideas which can help your employees in maintaining their financial well being are listed below: a) Track Income, Expenses and Savings:
You should suggest your employees keep a note of their income, the expenses incurred and the savings did. This method is quite helpful in keeping track of finances and will also act as a confidence booster for your employees in case of taking major financial decisions.
b) Do not compare:
You can advise your employees not to compare their income or expense and lifestyle with other people. Usually, this comparison happens with peers or friends but this comparison can affect their satisfaction level. It is quite natural that different human beings have different needs and different priorities in life and hence the expenses or savings would be different as well.
c) Positive Outlook:
Your employees should try and have a positive outlook towards life. This will help them in achieving success in all aspects of life may it be financial wellbeing or any other accomplishment.
3) Financial literacy
Financial literacy is the method by which you can impart financial education to your employees by which they would be able to manage their finances successfully. By imparting this basic financial education to your employees, you will help in inculcating the skills in them which will help them in managing their finances effectively. Financial literacy will help your employees in achieving financial stability, lowering their financial stress and improving their financial health.
By offering financial education at the workplace, you are improving the skills and knowledge of your employees about finances. This will help in boosting your employee’s confidence related to money matters, debt management, prepare and plan for retirement, etc.
Since your employees will be in less financial stress; this will reduce the absenteeism in the organization and also reduce the health care expenses in the organization. Moreover, this will also help in more employee retention and increased production in the organization.
You can initiate the process of financial seminars and workshops monthly for your employees. You can invite good finance professionals and speakers for the seminars who can impart basic financial knowledge and education to your employees.
Why is employee financial wellness important?
Financial wellness programs are an initiative taken by you for educating your employees about handling their finances wisely and improving their financial health. A financial wellness program helps in promoting the understanding of your employees about concepts related to finance management. This will be helpful for your employees in establishing stable financial scenarios at both the home and workplace.
Financial wellness programs for your employees can offer them the training and support that is necessary to manage the daily financial concerns. A well designed financial wellness program will help in the accurate understanding and application of money by your employees to develop stable financial health for now and even for the future. Financial planning can be briefly described as an additional benefit to the standard benefits of your employees which extends beyond retirement plans and the information about investments.
In earlier times, financial education programs for employees used to comprise of basic information on investments and retirement planning. But, with changing times the requirements of employees have changed and hence the financial wellness programs also need a change. You can organize workshops, lunch and learn programs, online training programs, counselling programs, online sessions with financial advisers etc. for educating your employees about financial wellness. You should ensure that your employees get a clear understanding of the benefits that are available for them and choose the ones which are best for them from a financial standpoint. The basic concepts which should be included in a well-designed financial wellness program are mentioned below.
1) Financial literacy
As said earlier, financial literacy is the basic financial education programs that give knowledge about the art of budgeting, saving, debt reduction, etc. It is about understanding the basic concepts related to finances and financial management.
Financial literacy is essential and important as it would teach your employees about how to handle their finances efficiently to achieve their goals rapidly. You can provide access to your employees to various financial literacy applications which will help them in handling their finances in a better manner.
2) Budget preparation
Most of your employees must be facing challenges like debts, monthly bill payments, unexpected expenses, etc. Budget preparation or budgeting would be of great help to your employees in handling these daily financial challenges easily.
You can include budgeting in your financial wellness programs for your employees to make them understand about balancing income and expenditure.
When your financial wellness programs for your employees include basics on savings and its importance, it is going to be of great help for your employees. They would understand the importance of savings, retirement planning and hence put a step forward towards achieving stable financial health.
Today, the financial wellness programs for your employees should cover the different aspects related to financial health such as:
i) Setting up of financial goals
ii) Budgeting for household and personal expenses
iii) Emergency fund and short-term savings
iv) Credit building by consumers
v) Debt reduction
vi) Management techniques for the financial crisis
vii) Spending pattern and behavior
viii) Smart shopping tactics
ix) Student loan repayment assistance
You must offer financial wellness programs for your employees at the workplace because employees who have a higher level of financial stress would be less focused on their work and this would affect the productivity and business of your organization. Many employees when they are not able to handle finances efficiently tend to skip jobs and look around for new opportunities.
Moreover, when your employees are worried about their finances and their management they would utilize their time and potential in sorting out these issues rather than using them for achieving organizational goals. With the provision for financial wellness education at the workplace, your employees get exposed to various financial tools and resources which can help them in managing their finances better. So, they would be more focused at the workplace and this would increase the productivity of your organization.