Financial wellness programs are no longer new. Everyone has been talking about them and everybody knows about them. With that said, to ensure we’re all on the same page, what is a financial wellness program?

It’s typically an addition to standard employee benefits like retirement planning and investing information. Financial wellness (or financial wellbeing) specifically refers to a person’s overall financial health and the absence of money-related stress. 

Most people look at financial wellness programs as simply education and financial literacy, the latter of which means an individual can make informed and effective decisions regarding their money and financial sources. 

A financial wellness program needs 3 things:

Loan Program

A good financial wellness program is nothing if it doesn’t have a loan program. 

You can teach as many people as you want about getting out of debt, but if they don’t have a solution that helps them get out of debt, they won’t. When evaluating loan programs for your organization, ask these questions:

  • Does the program require a credit score?
  • How does the program provide emergency cash for the 69% of Americans with less than $1,000 in their savings account?
  • How does the program help employees increase their credit score?
  • How does the program promote employee savings?
  • Do you have to pay to include all employees in the program?
  • Are the funds automatically repaid through payroll deduction?

Nearly 60% of employees state they feel it is more important than ever for employers to offer financial wellness benefits. However, there are few financial wellness programs that put employees first without any hidden fees or clauses in the fine print.

Always check the fine print.

 

Education

What most people think about when they hear “financial wellness program” is the education or counseling piece. Yes, this piece is highly important, but it isn’t the only piece. Before we can teach others about financial best practices, we need to provide the solution: the loan program.

Once a person has taken those steps to tangibly rectify their financial stressors, then we add financial education and counseling. These counseling sessions should help the individual to make smarter financial decisions long-term vs. just in the near-term.

When evaluating financial education partners, ask these questions: 

  • Is all advice and education provided by certified financial counselors?
  • Do they offer free credit report reviews?
  • Are all programs customizable to your needs or is it a one-size-fits-all?
  • Are there extra costs for the individual to use the financial counseling services or is the counseling fully packaged in?

 

Savings Program

Like mentioned earlier, 69% of Americans have less than $1,000 in their savings account at any given time. That’s not much to comfortably live on…

These individuals aren’t going to participate in any savings program because they likely have debt they need to pay off first. That’s why the savings program is the 3rd and final piece of a successful financial wellness program. 

When employees don’t have the funds to pay off debt, they won’t participate in savings programs, retirement plans, and/or other benefits geared towards the more financially stable in your organization. When evaluating savings programs, ask the following questions:

  • Can employees add to their savings account via automatic payroll deduction?
  • Does this integrate with my other payroll deduction programs seamlessly to protest the integrity of my employees’ paychecks?
  • Are there rewards and/or incentives for participation?

Achieving sound financial wellness is really a cycle or a staged approach. It starts with overcoming financial insecurity with a loan program. Second, you change financial habits through financial education or counseling. And third, financial security can be achieved and thus a savings program becomes attainable.