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Financial wellness is something that everyone
strives to achieve. Being in a position close to financial freedom can
alleviate many stresses that may come tied with financial burdens. With the
growing need for everyday living, financial wellness is not as easy as it was before. Student
debt is growing and the cost of living is not slowing down. This article will
discuss what you need to know about the importance of financial wellness and
how to go about achieving it in the times that we live in.
Although people define employee financial wellness
differently from each other, there is a universal understanding of what financial wellness
should entail. Forbes (2020), defines financial wellness as a construct. Based
on this, financial
wellness can be defined as (out of 100%):
PWC researched employee financial wellness
in 2020 and some of the findings are found below:
According to the
report, “more than one-third of full-time employed Millennials, Gen Xers, and
Baby Boomers, have less than $1,000 saved to deal with unexpected expenses”
(PWC, 2020). Looking at the current situation that the world has found itself
in, the COVID 19 pandemic, this finding becomes more important to look into.
Financial matters are
the top cause of stress in the workplace (PWC, 2020).
According to research
conducted on employees from various sectors in the USA in 2019, some
interesting findings were noted. America is among the richest nations in the
world. As a result, one would believe that most employees there would be on the
road to financial freedom but the contrary is true. Below are some employee wellness statistics
from the research conducted:
Employees need to pay
attention to financial wellness as the stress that is linked to the financial
burdens is taking a toll on the workforce at large. This stress translates into
depression, sleepless nights, and even full-blown panic attacks, which in turn
increase absenteeism, reduce productivity, and fuel high employee turnover
The way of living as
significantly changed from the way it was before. Some points need that
employees need to pay attention to before they sink into a crisis is that:
There are some
practices that you can do at an individual level to help with the stress that
comes with the financial burdens that can cause a threat to well-being. Here
are some ways in which employee
financial wellness can be achieved personally.
Make a budget - Depending on your
monthly income, expenditure, and savings, you can develop a budget that will
help you live with available resources. In case you face a shortage of money,
you can adjust your budget, but do not opt for credit cards. Any emergency
expenses can be covered with your savings but do not overspend or lend money.
Keep your spending in
- Once your budget is prepared, make a list of all the necessary items you
would want to purchase and spend accordingly. Also, keep a track of where you
are spending money regularly. If you frequently eat at restaurants, you can
maybe cut down your visits by one or two times to make sure you are not
Be yourself as your
- When you receive your monthly paychecks, always set aside a fixed amount for
yourself. You can set-up automated deposits and consider it as one of your
Never make any major
purchase in haste
- If you are looking forward to making any major purchase, always plan for it systematically.
Adjust your budget and savings accordingly and do not break into your regular
savings fund. Even if you do, make sure you replenish it to ensure that your
savings don’t get affected.
Avoid going overboard
with your credit cards
- If you are using a credit card, use it wisely and plan your payments each
month. Always stick to a limit and do not overspend. When it comes to financial
wellbeing, a credit score is an important aspect. Delayed payments and higher
debts can affect your credit score.
Although employers are
not usually the source of financial stress on their employees, they are in a
position where they can help their employees overcome these burdens. Some ways
in which employers can help employees in this area are noted below, as outlined
by ej4 (2020):
wellness is an important topic that needs to be in constant discussion.
Financial literacy is something that everyone needs to be a part of. This is a
part of life that everyone will experience and not many can avoid. Many
institutions, employers, employees and schools can help in turning this around.
is a Consultant at Industrial Psychology Consultants (Pvt) Ltd, a management
and human resources consulting firm.
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This article was written by one of the consultants at IPC
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