There is a misconception that financial wellness services are not needed by high-earning employees, but that couldn’t be further from the truth.
It may come as a surprise to learn that one out of every four families making over $150,000 a year is living paycheck to paycheck, according to data from Investopedia. This means all income is going towards expenses, putting individuals in the dangerous position of having no funds available to save. Twenty-three percent of individuals with incomes of $150,000 or more have less than $1,000 in savings, according to a GoBankingRates survey.
Regardless of your income, how you manage your money and the positive financial habits you practice are what keep you out of the 78% majority of Americans living paycheck to paycheck. No matter an employee’s role or hierarchy within an organization, financial wellness resources will add value and contribute to overall financial health and well-being.
The crucial element of a financial wellness program is the ability to provide appropriate direction and guidance to ensure individuals maximize their financial opportunity without having to exercise much effort to develop their own strategy. It must be easy to visualize the path forward, with clear actionable steps that will have a positive impact.
The beauty of a comprehensive financial wellness program is that it is highly personal. The tools, recommendations and services are uniquely tailored to each individual employee. Everyone’s financial situation is different, and it is crucial for financial wellness service providers to recognize that. If C-level executives haven’t experienced financial wellness offerings that are relevant to their own financial challenges or opportunities, it’s understandable that they’re missing the potential value and impact.
The financial challenges of higher earners may extend beyond individual needs, as they hold the responsibility of providing for their immediate and extended family. Expenses could range from child care, caregiving, private schooling or college assistance, home maintenance and improvements, elevated living costs, health insurance plans, retirement and investment options and estate planning, to name a few.
C-level executives may also have expenses related to lifestyle creep. As employees earn more money, they inadvertently spend more. For many, this type of spending can quickly and unintentionally spiral out of control. Financial wellness programs can help high-income earners remain mindful and grounded as they achieve career milestones. If saving, planning and investing are top-of-mind, it’s easier to maintain healthy financial habits.
A commitment to financial wellness is like a commitment to living a healthy lifestyle. Consistency is key. If an employee develops healthy habits and changes their behaviors, they will start to see the fruits of their labor. Improving financial health isn’t something that has an endpoint because financial situations are ever-changing.
We also shouldn’t expect perfection. The employee must recognize that there will be hiccups along their financial journey and give themselves some breathing room to get back on track.
But there is always room for improvement, whether it be as simple as spending less or saving more. In order to maintain or improve financial health (or overall well-being), employees must be willing to put in the effort. The good news is that a comprehensive financial wellness program will do the heavy lifting. They’ll be able to identify financial goals and develop a roadmap for personal financial success. It’s then up to each individual to make appropriate behavioral changes to achieve their desired goals or outcomes.
Seeking out financial wellness services before it is needed to solve a financial challenge is a wise decision. Employees will be able to assess their current financial situation, identify opportunities for improvement and hopefully, develop a plan that continues to advance their financial position.
An employee financial wellness program will adequately prepare them for the retirement lifestyle they desire and recession-proof their finances. It will allow these employees to elevate their current lifestyle, while supporting their family and setting a precedent for mindful financial health. It will also help employees reach their financial goals ahead of schedule.
