What is Financial Wellness?

Despite the fact that talk of employee wellness is everywhere these days, there’s still confusion about what financial wellness is and why it’s important. As such, we wanted to gather some key points on why financial wellness will be taking the forefront in 2022 and what employers can do to promote it within their workforces.

What is financial wellness?

There are a number of ways you can describe financial wellness, but simply put, it’s the practice of “managing one’s economic life”. The concept assesses a person’s financial health from a multi-dimensional perspective instead of just considering a solitary factor like their income level.

Financial wellness involves living within your means, being prepared for emergencies, having a strategic financial plan for the future, having access to tools and resources as needed to help make better choices and more. It encompasses both objective figures (ex. one’s total assets and liabilities) and subjective feelings towards money (ex. “I feel somewhat comfortable making large financial decisions on my own”).

Why is financial wellness important?

Financial wellness is a cornerstone in any person’s overall wellbeing. Anyone who manages their money independently can tell you that the state of their financial situation has a knock-on effect that impacts the rest of their life a great amount.

When people are financially insecure, they’re very likely to experience stress about their situation. Those who are dealing with financial stress have reported being twice as likely to suffer from poor overall health, four times as likely to suffer physical health symptoms and more likely to experience strain in their personal relationships.

Why should employers pay attention to employee financial wellness?  

One area financial stress rears its head frequently is in the workplace. When people are stressed about money, they carry that stress into work with them and it can affect their productivity, level of engagement and general attitude towards their job. In a 2019 study, PwC estimated that for an employer with 10,000 employees, the productivity cost created by distractions on the job due to financial stress amounts to $3.3 million in lost wages.

As such, employers have a direct stake in their employee’s level of financial wellness. A financially secure workforce is an engaged, productive one, while the opposite holds true for one that’s perpetually concerned about their finances.

What can employers do to help their employees combat financial stress?

Employers are uniquely positioned to help their employees minimize the level of stress they feel about money and benefit from doing so in return. An extremely effective way of doing so is to offer employees a financial wellness program as part of their benefits package.

A financial wellness program is involves a number of different financial benefits that work in combination to help employees make long-lasting improvements to their financial situation. Employers can choose to offer their employees whatever they want, but ideally a program will include some type of educational component, a financial boost (such as a QUBER group saving plan) and access to resources such as time with a financial advisor. Some may even offer a reactive element that helps employees resolve financial emergencies quickly so they can avoid getting into serious debt (for example, an emergency grant program).

What’s the first step an employer can take towards creating an effective financial wellness program?

Every business is different, so it’s important for employers to consider the specific needs of their employees. This can be done by making educated guesses as to what types of benefits would be the most effective for their staff based on factors like their primary demographics.

A more precise way of doing so is to run a quick financial wellness assessment with employees so there’s a set of data to refer back to when designing the program. This survey doesn’t need to be long but can really help to identify employees’ level of financial literacy, their confidence level with money, where they feel they need the most support and more.

Want to learn more about the most innovative, desired financial wellness benefit on the market?

QUBER offers a group saving plan that can help your employees grow their savings, get out of debt and make impactful, positive changes to the way they manage their money. QUBER’s financial wellness programs will fill in the gaps that more traditional types of benefits, like RRSP contributions and EAP, aren’t doing on their own.

👉 If you’re interested in learning more about QUBER’s programs or you’d like to see our platform in action, click here to request your free demo!