But that’s not typical of the majority of America.
No, most Americans have regret about past financial decisions, are embarrassed about their current financial situation, and worry about their financial future. You certainly wouldn’t know it to look at them. Social media perpetuates the myth that all is well, but consider these scenarios:
What you see: A couple strolling through a perfectly-filtered Italian vista.
Reality: A non-budgeted Italian vacation adding to a mountain of credit card debt.
What you see: A sweet fall montage of the family, including a blooper picture where the dog pokes his head out of a pile of leaves.
Reality: A stressed-out couple that doesn’t know how to pay for their kids’ college educations, fund their own retirements, or care for their parents in the coming years.
What you see: A series of self-affirmations suggesting the world is an oyster and positivity is the greatest force of nature.
Reality: A 24-year-old who has no ability to pay off their student loans or get off their parents’ insurance in the foreseeable future.
Reality rarely matches the highlight reel we see online. As we head toward Halloween, I’d urge you to consider taking off the mask and removing your own financial filters. Have you admitted the struggle is real? Is the cost of transparency greater than the actual cost of your financial burden? It’s difficult to get support if people aren’t aware of your real circumstances.
We are currently faced with a financial epidemic: many employees are on unstable footing due to debt challenges and a lack of emergency savings; others abruptly find themselves responsible for both their aging parents and dependent children. There’s no doubt about it – many employees are financially stressed.
These financial burdens can have negative effects at home and in the workplace, impacting health, relationships, and productivity. As an employer, this should concern you – aside from the possible adverse bearing on your company’s bottom line, it’s also discouraging to know financial stress can have the power to derail top employees.
In fact, 45% of employees say financial matters cause them the most stress in their lives. We believe it’s essential to closely and honestly examine the financial wellness programs currently in place within your company – are they adequately addressing your employees’ needs? Are they producing the behavioral changes necessary to improve employee well-being? If they’re not, consider the following:
Problem: More than a quarter of employees are using credit cards to pay for monthly necessities because they can’t afford them otherwise – and it’s an issue across all income levels.
Suggested courses of action: Host a budgeting and debt management course to help employees understand where their money is coming from, as well as where it’s going. Teach employees how to monitor their credit scores, emphasizing the power of compound interest and how it can either work for or against them.
Problem: Among employees with student loans, a large percentage indicate these are having a moderate to significant impact on their ability to meet other financial goals.
Suggested courses of action: Provide resources to educate employees about student loans and possible payment plans. Offer opportunities to learn about college savings plans to help ease future student loan burdens. Implement a student loan repayment benefit as part of your overall benefits package.
Problem: 47% of employees have less than $50,000 saved for retirement.
Suggested courses of action: Participants must understand the importance of starting early, how to take advantage of the company match, and what kind of gap they face between what’s saved and their retirement-ready futures. Make sure you’re providing sufficient education about your company’s retirement plan, how to enroll, your recordkeeper and their website, and where they can go with any kind of financial questions.
The Shepherd Financial team specializes in customized financial wellness programming, so we’d love to have a conversation about how we can improve your employees’ well-being. Connect with us today at 844.975.4015 or shepfinteam@shepherdfin.com.
Source: pwc, Employee Financial Wellness Survey, 4.16
Valentine’s Day reminds us now is the perfect time for ‘the talk’ with that special someone in your life. And since this is a financial blog, I obviously mean the money talk. True, communication can be challenging, and the topic of money is a sore spot for many people. But the more you can speak honestly about money, the less fear and anxiety will be wrapped around it. The dialogue may look different based on your relationship status and life stage; regardless, it’s important to have the conversation now, as well as make room for future conversations.
You may benefit from making individual financial balance sheets, including all your debt and savings, before you begin talking. This way, you’ll have a better idea of your net worth. You may also compile a list of money questions or concerns you’d like to cover. It’s worthwhile to discuss your current financial situation, share values and long-term goals, and talk through spending and saving habits. Not being willing to talk about money can lead to big issues, both now and down the road. Open communication, though, gives the opportunity to create shared vision for the future, tackle problems as a team, and have accountability for your financial decisions.
Determine your own money values. This is where you’ll examine if you value saving or spending, as well as think about the various lifestyle standards you have. If you’re single and value the ability to travel, you’ll likely take that value into a relationship. Potential partners may discover conflicting values. Married couples may disagree about saving for college for their kids versus boosting their own retirement savings. It’s ok to disagree, but finding common ground is key. And keep the big picture in mind: creating safe space for ongoing dialogue about a positive financial future.
It’s also critical to come clean about your financial baggage. If you have student loan debt or a spending habit you’re having trouble kicking, hiding the issue will only compound it. (Literally – interest either hurts debtors or helps savers, but it doesn’t sit still.) Once you’ve talked about where you’ve been and where you are, look ahead. Are there any financial obstacles ahead? What are you hoping to do with your money in the future? Highlighting these can help you better see how to actually plan for the future.
Of course, not every money conversation needs to be so in-depth, but it helps to check in at least once a month to ensure you and your partner are on the same page, spot any problem areas quickly, and maintain momentum toward your goals. Your first financial talk together may be a little awkward, but with time, you’ll become fluent in a shared money language.