Your employees might be feeling financially under the weather—you can help

Despite the chatter about financial wellness, it’s clear just how unwell many Americans feel when considering their own circumstances. (Been there, buddy…been there.)

This year, 36% of Americans surveyed by Bankrate reported having more credit card debt than emergency savings. That figure is up 14% since 2022, and indicates the difficulty some face managing finances amid high inflation and rising interest rates.

Personal finances are weighing heavily on workers’ minds—and possibly impacting companies’ bottom lines. The majority of US workers (77%) in a separate survey reported feeling anxious about their financial situation. Some bring their anxiety to work, and report that the negative emotions at times impact their productivity and even attendance.

In response to the growing concern, some have called for new financial well-being offerings, or new education around existing benefits and perks. To understand what corporate interventions might look like—and why it’s valuable—we talked to Liz Davidson about her new book, Money Strong: Your Guide to a Life Free of Financial Worries. Davidson believes “money is freedom,” and she has a framework for how to help employees manage theirs.

This interview has been edited for length and clarity.

How do you define financial wellness?

First, you have a manageable level of financial stress…Eustress—a good stress that propels you forward—[is fine], but not the toxic stress that releases cortisol that wears and tears on your body and damages your mental health.

It’s also about having a strong financial foundation, which includes living within your means, [having] emergency funds, no high interest-rate debt. It’s about having a plan for your goals and [a] timeframe for those goals…and having the right protections in place with insurance and estate planning. So, if something happens to you, you are going to be okay.

How can organizations help their employees achieve financial wellness?

You want to offer the best possible benefits for your employee base—[look] at what your employees really value, and [make] sure your benefits offering reflects that and your comp is competitive.

But once you do those foundational things…this is where financial coaching comes into [play].

[Coaching] helps employees maximize not only their compensation through good financial planning, but their benefits, because employees are typically not aware of many of the benefits that employers have. And they certainly aren’t, in general, maximizing those benefits—they’re leaving a lot of money on the table. Financial coaching can be available via chat, text, phone, email, and ideally large group workshops and webcasts on topics that the employees care about based on the analytics you gather.

Taking control of your finances can seem scary—how do you minimize some of the anxiety, fear, and shame around finances for people who want to achieve financial wellness but don't know where to start?

The number one thing that we found that works well is employees sharing their [success] stories. Employees sharing their testimonials, broadly, on company intranet, through podcasts that we do…[They’re] stepping out and [saying], “I was in this situation, and I got help. And this is where I am now. And there’s nothing to be ashamed of. This is hard, we live in uncertain times.”

Sharing that message is more impactful than anything an employer can do or anything we as you know, a financial coaching partner can do.

If people walk away from reading your book learning one thing, what should it be?

Finances are ever-changing. Your finances change, literally, with every single purchase you make, every single check you deposit, every single financial decision you make. We tend to think where we are now is permanent, and that creates a spiral of often negative thinking and stress and panic.

Whatever situation you are in now, it’s going to be different as soon as tomorrow. And if you have access to financial coaching at work, or if you have access to resources in your community that you trust, take advantage of them. Know that this is within your control and with the right coaching and support the situation you’re in today, in a month, three months, a year, will be a distant memory, and may even be something you look back on is one of the most important turning points in your life. —SV