daniel@bestmoneymoves.com, Author at Best Money Moves

5 Financial Stress Statistics for 2021

by daniel@bestmoneymoves.com | Feb 3, 2021 | Blog

5 Financial Stress Statistics for 2021. These 5 financial stress statistics illuminate a growing problem in the American workforce. What can employers do to help their teams?

Almost a year after the World Health Organization declared Coronavirus/COVID-19 a public health emergency, workforces nationwide continue to feel the effects of the pandemic. But fears of getting sick aren’t the only thing keeping Americans up at night. Increasingly, studies show that financial stress is a major problem among most employees, and employers need to reevaluate the scope of the problem in order to find solutions that financially empower their teams.

Here are five fast facts about financial stress in 2021 that could be impacting your workforce:

On the whole, the American workforce is stressed out about money — often even more so than they’re stressed about the pandemic.

According to a 2021 Capital One CreditWise survey, 73% of Americans rank their finances as the most significant source of stress in their life. Given the state of public health, this statistic reveals the gravity of financial wellbeing in the lives of individual employees.
Gen Z and Millennial employees are feeling this crunch the most.

This same survey pointed out that the younger generation in the workforce are the most stressed about their finances. A remarkable 82% of Gen Z respondents and 81% of Millennial respondents noted that their finances are at least somewhat stressful. Although it’s difficult to say what exactly is causing this disparity, two factors may be that younger generations have significant student debt and a smaller accumulated savings.
The cost of medical care weighs heavily on employees.

Forty-one percent of Americans feel that the cost of medical care is the biggest financial stressor, according to the latest CFP Board and Heart + Mind Strategies survey. Other major concerns seemed differentiated by generation. Gen Z and younger Millennial respondents marked more concern about paying rent or mortgage than older Millennial and Gen X respondents, while the older generations were more concerned with saving for retirement than younger colleagues.
Most people are underprepared for financial emergencies.

According to PwC’s annual Employee Financial Wellness Survey, 38% of all employees have less than 1,000 dollars to deal with unexpected expenses. This number jumps to 62% among Gen Z respondents and drops to 34% among Gen X respondents.
Employees are shouldering this burden alone.

The CFP Board and Heart + Mind Strategies survey also noted that 3 out of 4 respondents did not seek the help of a financial planner. Those who did saw their stress levels drop.

Bringing Financial Wellness To the People Who Need it Most

One thing’s for sure: In one way or another, regardless of age, experience or industry, employees are struggling with financial stress. That’s why financial wellness platforms like Best Money Moves are key to improving the employee experience.

Insightful, comprehensive and easy-to-use. Best Money Moves offers consumer-focused financial education designed to help users of all experience levels learn more about their money. More than a simple budgeting tool, Best Money Moves helps your employee educate themselves about everything from investing in the stock market to co-signing loans to buying their first homes with access to a library of over 700 articles, videos and calculators. Plus, Best Money Moves connects employers with data they can use to help their workforces succeed by leveraging user analytics to create individualized employee content.

Employee information is always private but employers do have access to key analytics that show overall employee financial stress and stress levels over time. The Employer Dashboard also features information on program usage, debt and savings levels and more so employers can see just how valuable Best Money Moves is to their employees.

If you want to learn more about how Best Money Moves can bring financial wellness to your company, download our whitepapers.

Employee Financial Wellness During the COVID-19 Pandemic

by daniel@bestmoneymoves.com | Sep 22, 2020 | Blog

Financial wellness during the COVID-19 pandemic. How COVID-19 is impacting financial stress, and how financial wellness programs can help.

The vast majority of U.S. employees – 84% – expect the COVID-19 pandemic to impact their long-term financial wellness, according to a new study from Northwestern Mutual. The annual Planning and Progress study also found that while the pandemic is financially distressing, it actually inspires resiliency and some positive behavioral change.

Higher levels of employee financial stress are linked with lower productivity and poor financial decisions, creating a negative feedback loop. This new study showed that some employees are taking a different approach. “People appear to be cautiously optimistic about the future and a growing number are taking responsibility and action, which are key ingredients for financial planning,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual.

Financial Stress Statistics During COVID-19

The most substantial result of the study is an increase in financial stress. A hefty 38 percent of participants took undesirable steps to make ends meet in the short-run. Some of those steps included:

26 percent of participants took advantage of payment deferral options
19 percent of participants pulled from their personal savings or emergency funds
13 percent of participants borrowed from a family member or friend

As a result of the tangible damages of the COVID-19 pandemic, workers expressed a declining sense of financial wellness. Nearly 60 percent of employees believe the financial impact of COVID-19 will be moderate or high. Just 35 percent of participants rated themselves as financially secure. That is a drop of 10 percentage points from the pre-pandemic statistic. On the other side of the spectrum, 19 percent of participants rated themselves as not financially secure, a seven percentage point jump from the 12 percent statistic prior to COVID-19.

Increased Demand for Financial Wellness Due to COVID-19

For many employees, COVID-19 has illuminated areas of financial stress that they would like to alleviate. More so than before the pandemic, workers are trying to meet the challenges of this economic downturn and striving for financial wellness. Fifteen percent of participants said they did not have a financial plan before the pandemic, but now created plans and 20 percent of participants said they made significant adjustments to the plans they had before the pandemic.

The pandemic also inspired a significant uptick in the number of Americans looking for financial guidance: 19 percent of Gen X, 22 percent of Millenials and 22 percent of Gen Z said they did not previously have financial advisors but are now in the market for them. As these younger generations continue to enter the workforce, their demand for financial health benefits continues to increase. It is an opportune time for employers to supply financial wellness programs.

While 84 percent of Americans COVID-19 to have a negative impact on their financial wellness, a similarly large 83 percent of Americans believe they’ll achieve long term financial security.

How Financial Wellness Programs Can Help

Now more than ever, the importance and desire for financial wellness is evident. Platforms like Best Money Moves have the support system employees are seeking.

Best Money Moves is more than a calculator and a budgeting tool. It is a user experience. We leverage user analytics to create individualized employee content and gamify the platform to encourage consistent engagement. When employees need a helping hand, our team of money coaches is always at the ready. And, of course, employee information is always private.

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.