How To Be Financially Fit
Just like physical health, being financially fit is crucial to your employee's well-being, their future and quality of life.
Financial wellness: a ripple effect
Being financially fit is about more than just having enough money in an account to cover expenses and put away something for tomorrow.
Managing money responsibly will affect many aspects of your employee's life:
Mental health. Money stress can severely affect mental health, causing depression, restlessness, anxiety and more.
Physical health. Stressing over finances can also directly impact physical health, leading to recurring symptoms like headaches, fatigue, upset stomach, insomnia, high blood pressure and an increased risk of heart disease and stroke.
Work life. Being bogged down by money worries can make it difficult to focus while at work, which can bring down productivity levels and hamper career growth. In addition, prospective employers tend to review the financial wellness of new hires as part of their background checks; high rates of debt and a poor credit score can cost an employee a new job.
Parenting. Managing money irresponsibly can mean not having sufficient funds to pay for a child’s education, private lessons, medical needs and more.
What are the leading causes of money stress?
Here are the top causes of financial stress:
High-interest debt
Insufficient savings
Medical bills
Living paycheck to paycheck
Lack of retirement planning
Stressing over money is never fun. Stressing over money takes on its own form of angst by adding a level of long-term anxiety. It takes time, sometimes years, to undo the damage of any of these stressors — but it can be done!
Barriers to financial wellness and how to overcome them
Unfortunately, while many people may understand that financial fitness is crucial to their wellbeing, there are several barriers that make it difficult to follow through on their convictions.
First, many lack the basic financial knowledge necessary to responsibly manage their money. Second, many people mistakenly believe that budgeting, saving and being more mindful of how they manage their money are too time-consuming and tedious. Finally, some people may have fallen so deeply into debt, they’ve begun believing they will never be capable of ever pulling themselves out.
Here are some simple steps to maintain financial wellness:
Get your employees educated. There is no shortage of financial literacy available to the interested consumer, from financial literacy blogs to personal finance books, podcasts, online classes and so much more. Learning how money works, the power of a long-term investment and how much someone may be paying each time they swipe that high-interest credit card can help them make better choices.
Pay all bills on time. If someone can’t take aggressive steps toward paying down debt just yet, they can make the minimum payment on each credit card bill each month.
Create a budget. Giving every dollar a destination makes it easier to spend mindfully and cut down on extraneous expenses.
Start saving. There’s no such thing as a sum of money that’s too small to put into savings. Every dollar counts, and once the ball starts rolling, they will be motivated to pack on the savings until they really grow.