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FinFit's financial wellness platform, which is currently available as a benefit to more than 7 million employees, gives access to products like credit lines and loans,
Teaming up with emergency savings platform Sunny Day Fund allows them to provide a more holistic financial safety net to workers whose traditional options for banking are either insufficient or too expensive, says Michael Woodhead, chief commercial officer at FinFit. All FinFit members will be able to seamlessly direct money from their paychecks to both credit and loan payments as well as into a Sunny Day Fund savings account. These accounts earn 4.06% APY interest from Portage Bank — 10 times the national average.
"We use technology to provide access to affordable emergency credit solutions for working Americans who otherwise have only terrible options and unfair options," he says. "But no one would agree that credit is the answer to long-term enduring financial wellness and financial resilience, so we needed to partner with someone who could provide an emergency savings solution that is high yield, that is push-button easy, and that has affordable fees for American workers and for employers who are providing that service to their workforce."
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A survey from Payroll found that 78% of Americans were living paycheck to paycheck in 2023. The inability to save is hitting all generations within the workforce, with Gen Z citing high monthly bills, millennials citing lack of budgeting and financial planning, Gen X citing low income versus high monthly bills and baby boomers citing rising cost of living as their number one challenge, according to research from Forbes Advisor.
A study by financial services company Lending Club shows that salaries are not keeping pace with the cost of living: Approximately three quarters of those with an annual income of less than $50,000 were living paycheck to paycheck in November 2023, but so were 67% of those making between $50,000 and $100,000 and 45% of those making more than $100,000.
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Woodhead points out that there is a gap in employer support for long-term financial goals such as retirement, which is often a high priority, and workers' day-to-day financial needs. Learning how to reduce expenses, budget and build savings on top of having the opportunity to automatically pay down credit and save is something the majority of employees can benefit from. And offering these things in a digital tech format — and at no cost to employees — provides unencumbered accessibility.
"It's all about behavioral change," says Woodhead. "Once we get engagement from employees, we [provide] an individualized financial action plan that can include coaching, financial literacy, money management and budgeting tools. You cannot have a financial wellness platform without providing people access to the resources they need to solve their own problems, and at the same time, until you convince them that you understand the problem and that you're in it with them."
When it comes to saving in particular, Sunny Day Fund's approach stems from an understanding of mental accounting — that people value money differently depending on what it is used for — so they encourage people to save for things they are looking forward to as well as unexpected expenses, explains Sid Pailla, Sunny Day's founder and CEO.
"When you're saving for an emergency, yes, you're trying to feel secure, but when you're saving up for a vacation you want to go on or holiday gifts you want to buy, or a security deposit to move into a new apartment, all of a sudden you're feeling hopeful and aspirational," he says. "That is a powerful energy, especially when paired with an affordable credit solution."
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Employee engagement in financial programs has a positive impact on their overall wellness, as well as an organization's ROI. A Bank of America report noted 84% of employers said offering financial wellness tools can cut down on employee attrition, and a survey from PwC found that workers who are not stressed about finances are nearly five times less likely to be distracted by them at work.
Both FinFit and Sunny Day Fund have traditionally high participation levels, and SDF members save around $144 per month on average. When employees opt to put money in savings, notifications encourage them to watch their account grow and they receive personalized feedback about what other programs might be useful, says Pailla. The consistent, positive interaction is key for long-lasting success.
"Every time payroll runs, [members] get a message saying, 'Congrats, you just saved $78, and by the way, here's a great resource about how you can lower your interest payments on your student loans or your mortgage, or how to set up a 529,'" he says. "That [method] of giving a carrot and giving them an opportunity to learn more afterwards, that experiential learning, has been [very] successful."
