Why is employee financial wellness important?
As the cost of living continues to rise, an increasing number of Americans are finding themselves living paycheck to paycheck. This can make it difficult to save money, plan for unexpected expenses and can lead to a financial stress when unforeseen bills or expenses arise. To cope with these financial challenges, many low-income individuals turn to high-interest predatory loans or incur overdraft fees, which can ultimately lead to a cycle of debt and financial instability. This is a growing concern among employees and their families, as they struggle to make ends meet.
When employees are under high financial stress, it can affect not only their work but also their overall well-being. This can include:
poor performance at work
missing more days of work
increased risk of depression and other mental health issues
negative impact on physical health
financial strain on family and marital problems
Why perform an employee financial health Survey?
At ZayZoon, we are passionate about improving the financial well-being of employees. We believe that by offering proven and effective services that employees highly value as a financial benefit, we can make a real difference in people's lives. We are constantly gathering data to better understand the needs of employees so that we can improve our products and services.
The financial wellness survey data that we gather allows us to stay on top of industry trends and create solutions that are tailored to the needs of employees and employers. By doing this, we are able to help more people achieve their financial goals and improve their overall financial well being.
Financial health survey methodology
We surveyed 2,000 respondents living and working in the United States. We asked those respondents 35 financial health questions across five key categories:
Relationship with finances
Cash flow (income and expenses)
Net worth (assets and liabilities)
Appetite for increasing income
Employee financial well being highlights
56% do NOT have a personal budget tracker of any kind
Maintaining financial wellness is crucial for overall well-being. Budgeting trackers are an effective tool for achieving this goal as they help individuals to track their income and expenses, set and track financial goals, and identify areas where they may be overspending or under-saving.
By monitoring spending in this way, individuals can make more informed decisions about where to allocate their money, and make adjustments as needed, which can help to alleviate financial stress and financial worries. Additionally, budgeting trackers can also help individuals to identify patterns in spending, and address the financial challenges that may arise from impulse or unnecessary purchases.
Setting and tracking financial goals also plays an important role in achieving financial wellness. It allows individuals to focus on specific objectives, and measure progress towards achieving them, which can increase motivation and commitment to financial planning.
Prioritizing Financial Health of Your Employees
Employers have the ability to play a significant role in the financial wellness of their employees by providing financial wellness programs that include budgeting skills. These programs can help employees to better understand their finances, set and achieve financial goals, and make more informed decisions about how to spend and save their money.
65% had a net worth of $5,000 or less
Net worth is an important indicator of financial health as it measures the value of an individual's assets minus their liabilities. Employee financial wellness programs can help employees to improve their financial situation by providing them with the tools, resources, and information to make informed decisions about their money and to set and achieve financial goals.
By participating in financial wellness programs, employees can learn about budgeting, saving, investing, and other financial management strategies, which can help them to improve their net worth over time. Providing financial wellness resources to employees can have a significant impact on the overall well-being and productivity of employees.
"Findings show that businesses have had success with financial wellness programs and that ROI on those programs can be quite significant in terms of employee recruitment, retention, productivity, and satisfaction." (US Chamber of Commerce Foundation)
62% said they have a plan to make more money with their existing skill set and education
More and more workplaces are starting to offer financial wellness initiatives and it's all because employees are looking to boost their income and take control of their financial well-being. These programs usually cover topics like budgeting workshops, retirement planning and help with managing debt.
But it's not just about money, people are also looking for ways to learn new things, pick up new skills and advance their careers. Employers can help by offering training, mentorship, and networking opportunities. By taking care of both financial wellness and career growth, employers can help their employees achieve both financial security and professional success.
40% were carrying some form of payday loan debt
Payday loans can be a debt trap for low-income employees, as they often come with high interest rates and fees, making it difficult for borrowers to pay them off and leading to a cycle of debt. In Idaho, the average cost to borrow $500 on a single payment load from a payday lender for 4 months can be up to $100 (652% APR) according to Pew Charitable Trusts.
Some states have capped the interest rates on payday loans, but they can start at 114% and rates above 400% are common. This can trap financially stressed employees in a cycle of debt that can lead to financial ruin. Employers can help their employees to avoid having to go to payday lenders by providing financial wellness benefits before they are forced to resort to payday loans.
Employee financial wellness benefits can include things like Earned Wage Access, financial education, budgeting resources and debt management services. Additionally, employers that provide a pay advance option can help employees to avoid having to resort to payday loans by providing them with a financial safety net. This can help employees to manage their finances more effectively and avoid the high-interest rates and fees associated with payday loans.