Financial Wellness 101: Everything you need to know

If you’re an employer, HR team member, or benefits professional, you’ve probably considered offering a financial wellness benefits program. But maybe you haven’t made much headway because you don’t know where to start, or you’re unclear if employee financial wellness even falls under the purview of employers. (Spoiler alert: it does!). Here, we’ll outline what separates a check-the-box financial wellness benefit from one that will support employees in creating a better financial present and future.

Finances remain a major stressor for workers. In fact, according to PwC's 2023 Financial Wellness Survey, 60% of employees are stressed about finances (including 47% of those making at least $100,000 a year) — a higher rate than during the height of the pandemic.

The good news is that only 33% of employees report being embarrassed to ask for financial guidance, down from 42% in 2019.

What is financial wellness? And why is it important?

Financial wellness is a term used to describe your ability to manage your current and future financial needs. It takes into account the total picture of your financial health and recognizes how finances can impact stress levels. Much like physical fitness and mental health, financial wellness is essential because it impacts overall health and well-being. Some key identifiers of financial wellness are:

• Managing money well enough to meet everyday expenses

• Spending within your means

• Having enough to cover financial emergencies or unexpected events

• Staying on track to meet savings and retirement goals

• Handling debt and creating a plan to become debt-free

Why is employee financial wellness important?

The employer’s relationship with their workforce’s financial wellness is an intimate one. Employers are most directly responsible for an employee’s financial well-being, as the rates of compensation and the benefits the company provides constitute a significant portion of an individual’s ability to be financially healthy. What’s more, employers are directly impacted by an employee’s financial wellness, as financially stressed employees are more likely to be distracted at work, have lower productivity, and have higher rates of absenteeism. According to PwC’s 2023 Employee Financial Wellness Survey, a third of full-time employees report that financial stress has impacted their performance at work.

What are the benefits of employer-based financial wellness benefit programs?

For employees

Financial wellness benefit programs help employees get more out of their paychecks. Employees benefit from resources to manage their day-to-day spending and expenses, track and measure progress toward saving and retirement goals, and reduce debt. The best options even offer access to one-on-one financial planning with Certified Financial Planners™. But the perks of financial wellness programs don’t stop at monetary benefits. Individuals with better control of their finances report less stress and improved mental health—plusses for employers, too.

For employers

We know that money is the number one source of stress for employees — above work or relationship-related stress combined. Stressed-out employees cost companies big time.

Some estimates put financial stress at an estimated $250 billion per year in lost productivity and absenteeism.

According to a February 2024 SoFi survey, 35% of workers want to improve their financial literacy and knowledge. Employers can help. Those who provide financial wellness benefits to help employees improve their financial health benefit from happier, healthier, more focused, and productive workers.

How effective are financial wellness benefits programs?

Much like physical fitness or wellness programs, the efficacy of financial wellness programs varies greatly. Creating lasting behavior change is hard, and the best wellness programs are designed to keep individuals on track even when they lack motivation. Many company-sponsored financial wellness programs focus on building financial literacy. These programs often center on day-to-day financial management and cover topics like budgeting and expenses. While these are undoubtedly helpful tools, self-guided programs are boring, plain and simple. While employees may start strong — logging expenses or checking their progress on yearly savings goals — many lose motivation after only a few short months.

Rather than educational resources, employees need holistic financial programs that cover the nitty-gritty of employee finances (expense management, savings goals, debt reduction) while offering expert guidance.

This last point is key: A joint Bank of America and Merrill Lynch survey found that 41% of employees say advice from a professional, such as a financial advisor, planner, or accountant, would be the most important financial resource their employer could provide.

What types of financial wellness programs exist?

The financial wellness programs available are as diverse as the companies that provide them. Let’s look a little closer at the various options available.

1. Financial literacy programs

These programs have traditionally centered on how to best maximize and prepare for retirement through savings and investments. While this is a necessary aspect of an individual’s financial health, holistic wellness is about so much more than a comfortable nest egg for retirement.

‍2. Financial wellness platforms

Holistic financial wellness platforms, like Origin, allow users to manage their compensation, benefits, and personal finances in one place, side-by-side with Certified Financial Planners™. Employees can work with financial planning advisors bound by fiduciary duty to develop a financial roadmap and track their progress. Platforms like Origin function as a single place for employees to understand the value of their cash, equity, and benefits to see progress and take action.

3. Budgeting and cash flow management

Tailored advice from a personal financial advisor who is also a fiduciary, an individual with a legal and ethical obligation to act in the best interests of others, is best. To complement this advice, an all-in-one dashboard can help employees see how their money is spent. These tools typically allow users to filter and display information in several ways, like timelines of spending and budget breakdown along with spending categories, which can cut down on financial literacy barriers that may exist for some users.

4. Tax guidance and preparation

Some financial wellness programs, like Origin, offer tax guidance and filing services. They can provide guidance and assist in complex situations that may arise when it comes time for an individual's income tax return, such as employee stock option exercises and share sales. Complete tax preparation and filing gives employees peace of mind to handle everything from liquidity events to itemized deductions and make complex tax situations — like tax withholding adjustments and taxes owed in multi-state filings — easy.

How to start and select a financial wellness benefits program

The best financial wellness benefit is one that your employees will actually use. To find out what employees would find most helpful, start your search for a workplace financial wellness program by asking employees what they’d like to see offered. Use employee surveys to learn about the features they’d like to see included in an employer-provided financial wellness program and their willingness to engage the services of a certified financial planner. Ask what they like about the company’s current offerings and where they could improve.

Once you have a shortlist of the features that would best suit your employee’s needs, begin searching for a financial wellness program that would be a good fit. During your research and review of top programs, ask questions like:

• What does the launch look like?

• What’s your average employee engagement rate?

• Can employees continue to access education and support post-launch?

• What is your approach to customer success, and how do you measure it?

• How do you manage employee requests?

Once you’ve settled on a program, spread the word among employees. Employees will only benefit from a financial wellness benefit if they are aware of it and know how to use it, so take a multi-channel approach to inform employees of the new offering. Email and Slack messages are great, but managers should be nudged to mention them in department meetings and one-on-ones, too. For employees working on job sites or in manufacturing plants, consider using physical posters and brochures to share this new offering.

Lastly, be light and approachable when communicating this new offering. Benefits-related communications often go unread or unnoticed because they’re dense and lengthy. Keep things simple and highlight the perks of the new employer-sponsored financial benefit while inviting employees to learn more.

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