Financial wellness can be defined as “the dynamic relationship of one’s financial and economic resources as they are applied to or impact the state of physical, mental, and social well-being.”1
As workplaces evolve to meet the needs and demands of the economy, more employers are recognizing the value of a holistic approach to employee wellness. While initiatives focused on physical health have become more prevalent in benefits programs, there is increased recognition of the importance of implementing strategies to support employees’ overall health.
Establishing an individual’s financial health requires building on their financial literacy, which is “the ability to understand and effectively use financial skills, including personal financial management, budgeting, and investing.”2 In order to help employees improve their financial literacy, employers can turn to financial wellness programs like Kashable that offer access to low-cost credit to support employees in making progress toward their financial goals.
Even employees who have a strong foundation in financial literacy may encounter life events or economic circumstances that impact their finances and destabilize their financial stability. COVID-19 made it clear how quickly one’s finances can change significantly. Recent surveys show that only 44% of Americans said they could cover a $1,000 emergency expense, while 49% said that inflation has caused them to save less for unplanned expenses.3 As a result, many people turn to credit cards and other expensive debt options without a full understanding of the true cost and the risks. With 64% of Americans living paycheck to paycheck, the precariousness of this situation is clear.4
Stress about money and finances are one of the top causes of stress for 72% of Americans.5 The effects of this financial stress can have a major impact on an individual’s health and ability to function in the workplace and in their personal lives. The US industry loses an estimated $300 billion annually due to stress-related absenteeism, decreased productivity, and accidents.6 The medical costs shared by employers and employees associated with dealing with stress can lead to further financial strain and a continuous cycle of debt and more stress. For businesses and employers, stress can affect employee engagement and attendance.
Financial wellness programs are an effective way to help achieve financial literacy among employees. Kashable’s financial wellness program provides education and resources on budgeting, saving, investing, and other financial management topics. By increasing their financial literacy, employees can make informed decisions about their finances, help reduce financial stress, and work toward achieving their financial goals. In addition, Kashable’s program offers convenient access to low-cost loans, live financial coaching, free credit monitoring, savings accounts, and a financial literacy library that can make it easier for employees to manage their finances.
By providing employees with the knowledge and tools they need to manage their finances effectively, financial wellness programs can help employees achieve financial wellness, and enhance their financial literacy skills. This, in turn, leads to a happier and healthier workforce.
[1] https://financialhealthinstitute.org/learn/financial-health/
[2] https://www.investopedia.com/terms/f/financial-literacy.asp
[3] https://www.forbes.com/sites/lizfrazierpeck/2022/01/19/financial-wellness-is-critical-to-your-overall-healthand-financial-literacy-is-the-key/?sh=7349d9982cdc
[4] https://www.cnbc.com/2023/01/31/share-of-americans-living-paycheck-to-paycheck-jumped-in-2022.html
[5] https://www.apa.org/news/press/releases/stress/2014/stress-report.pdf
[6] https://www.stress.org/workplace-stress