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5 Strategies to Brace for a Recession

by Ilyce Glink | Mar 19, 2020 | Blog

5 strategies to brace for a recession. You should get your finances in order now to prepare for a global recession signaled by the Coronavirus (COVID-19) pandemic.

The Coronavirus (COVID-19) pandemic has spurred a surge in financial anxiety, with many signs pointing to the beginning of a deep, lengthy global recession.

The stock market has taken a sizable blow. The federal government has warned of a potential 20 percent unemployment rate in the near future. Nearly 80 percent of people across the U.S. were already finding it hard to pay their bills at the end of the month. None of this will help reduce their financial anxiety. Or yours.

A recession is unquestionably a hard time, but you can survive the situation by anticipating hardships early and planning for the future. With that in mind, here are five key strategies to help you brace for these uncertain times:

5 Strategies to Brace for a Recession

1. Rethink Your Financial Situation

One of the toughest parts of a recession — not to mention a worldwide pandemic — is not being able to predict what comes next and when your situation will improve. That’s why it’s so crucial to be precise about where you stand financially. These are some of the central questions you’ll need to answer as you take stock of your fiscal situation.

How much money do you have on hand?
How much money can you obtain quickly, if you need it?
How much debt do you currently have (credit cards, student loans, etc.)?
How much are your basic monthly living expenses, including food, shelter, health insurance, transportation, childcare?
Do you have any major life events (weddings, a baby, retirement) coming up with significant expenses attached?

Now is the time for you to understand what you’re spending today and to anticipate your needs over the next six months. If you’re well-prepared for a recession, job loss or some other financial catastrophe, you’ll have an emergency fund that covers three to six months of living expenses (and hopefully a healthy nest egg for retirement).

If you don’t have at least 3 to 6 months of basic expenses in cash, then set that as your financial goal. Start by developing a basic understanding of how you are spending your money and building a budget.

To start building a budget, figure out your total income, including your income, your spouse/partner’s regular income and any side hustles you do to bring cash into the household. You should also include your investment income and any other sources of income, such as child support. Next, list your monthly expenses, including your rent or mortgage payments, utilities, groceries, pharmaceutical or medical needs, child care costs, home or auto maintenance, debt payments and insurance premiums, and anything else you regularly pay for, including expenses you might only pay annually. Add up all of these expenses to understand whether you’re spending more, less or the same as your take-home pay each month. Finally, prioritize your essential expenses and make sure you understand what is the absolute minimum you can spend in a given month to get by – just in case you or your spouse/partner loses their job.

Your budget may need to adapt in preparation for a recession, and that’s okay. Try to cut down on non-essential spending, like entertainment, cable, and clothing. While it’s unrealistic to think you can cut out all discretionary spending, it’s important to separate wants and needs. Look for areas where you may have overspent recently, and try to figure out why that happened. You might not have extra money to put toward your retirement or a down payment right now, which is alright for the short-term.

Once you get in the habit of consistently reviewing your finances and looking for problem areas, you’re off to a great start.

2. Pay as Many Bills as You’re Able to

You might be worried about paying off outstanding debts in the coming months, like credit card bills, utilities or student loan debt. If you experience a loss of income, you might have to forego paying one or more of these bills, so it’s important to understand what are the most important bills you need to pay.

Because if you lose income, you may not be able to pay every bill on time, and in full every month. And, that will have a direct impact on your credit score. While normally we suggest doing whatever you can to keep your credit score intact, that may not always be possible. So, you should prioritize how you pay your bills, so the cash you have covers as many bills as possible.

Make sure you pay your rent or mortgage on time and in full. You don’t want to face foreclosure or getting evicted.
Make your car payment, especially if you need a car to get to work.
If you’re facing an income reduction, contact your student debt lender and ask for a hardship application, which should buy you a few months where you don’t have to make a payment.
Make at least your minimum payment on your credit card, if possible. If not, contact your credit card company and try to work out a payment plan. (Just know if you do this, the creditor will likely freeze your credit card, which will prohibit you from charging anything else on the account.)
While your medical debts are important, your health insurance will continue even if your medical bills grow. But if you buy your own health insurance, make sure you pay your premium on time so your policy isn’t canceled.

Remember, if you’re falling behind, reach out to your creditors right away and ask for hardship concessions. This might include making interest-only payments on your debt or putting payments into forbearance.

You can also check out your local bank or credit union for a personal loan. There are online lenders as well, and your own employer may offer a short-term loan program in times of trouble.

If you’re making your payments on time, you can also ask your credit card company or any other lender about lowering your interest rates. A significant number of major utility providers offer programs that might allow you to pay your energy bills at a later date or offer hardship assistance. You’ll never know what agreement you and your creditor can reach with if you don’t ask.

3. Take Advantage of Local and Government Assistance

Fortunately, many local, state and federal governments will take action during a recession to provide relief to those in need. For instance, during the Coronavirus COVID-19 crisis, the federal government is considering all sorts of assistance, and announced that taxpayers will automatically get a delay in paying their tax bill (although you still need to file on time) and the Department of Housing and Urban Development announced a 60-day moratorium on foreclosures and evictions.

On a smaller scale, community organizations like food banks and places of worship will often try to help anyone struggling. Check with your local government as well as community activist groups to see if there are resources in your area for your specific needs.

4. Save as Much as Possible Into Your Emergency Fund

Even if job cuts or layoffs are looming, keep putting away as much cash into your emergency fund as possible. You’ll need every bit of it when the income stops flowing. Give up all the extras, including takeout and delivery. Try to live as lean as you can, so your cash goes as far as you need it to.

While taking money out of your emergency fund is never a decision you should make lightly, losing a job or being forced to live on a lower salary certainly qualifies as a good reason to use the cash you’ve stowed away. However, it’s important that you start to rebuild your emergency fund as soon as your financial situation is more stable. Otherwise, when the next emergency hits, you might have to make tough decisions, like taking money out of your retirement account or borrowing a line of credit from your home equity.

5. Keep Tabs on Your Financial Situation – and Make the Most of the Guidance We Have at Best Money Moves

The next few years may be uncertain, but the best thing you can do is take proactive steps now to prepare yourself. To help you stay on top of your finances in these stressful times, Best Money Moves is your partner in financial wellness. You can trust us for reliable information on need-to-know topics. Financial education is important now more than ever so you can feel good about where you are with your money, regardless of any challenges ahead.

Coronavirus and Financial Stress March 2020

by Ilyce Glink | Mar 16, 2020 | Blog

Coronavirus and financial stress, March 2020. Free Best Money Moves to help your employees manage their finances and reduce stress.

Coronavirus = Employee Financial Stress: Get Best Money Moves for Free

Coronavirus is everywhere – and so is the fear that your employees will get it, infect themselves and their families, as well as their colleagues.

If you’re like most of the people I know in HR, you’re up to your ears now trying to get your employees set up to work from home. Figuring out this new way of working for an indeterminate period of time, is complicated: there are new procedures to write, new rules to lay out and communicate, technology issues to solve, and new worries to deal with.

Underlying all of this, is employee financial stress. The C-suite is worried that business will disappear, revenue will evaporate, and many industries will experience a massive, almost immediate shift. Your employees are worried about exactly the same things. Your job is to help them feel as secure as possible when life is anything but.

What I’m hearing today is that employee financial stress has gone through the roof. We’re seeing unprecedented use of our technology, with rising Stressometer(R) scores.

And even if their job is safe for the moment, their spouse or partner’s job, as well as any sidekick income they were bringing in, may not be. We are already hearing about Coronavirus layoffs, and even if your company is doing well, everyone’s retirement is affected when the stock market declines by 30 percent in less than three months.

How can you help? Constant communication is a must these days, as well as projecting calm and thoughtful consideration. But you already know that.

Here’s something else: top quality financial information is also important, along with reminding employees about all of the benefits that your company offers them that might help them through these tough times.

We want to help, too. We’re offering three months of access to our Best Money Moves platform for free. If you’d like to extend access to the platform, or offer access to our money coaches or free credit scores after the three months has elapsed, we’ll work with you to push any payments owed until later in 2020 or even January 2021.*

The important thing is to help your employees feel reduced financial stress so they can focus on their health, and doing the work you’re paying them to do.

Email sales@bestmoneymoves.com today to get the ball rolling. We can get your employees set up on Best Money Moves in a few days.

Best Money Moves. Because you need to make your best money moves every day.

*This offer is available only to companies that are not already customers of Best Money Moves. This offer may be rescinded at any time. Contact sales@bestmoneymoves.com for details.

Coronavirus and Financial Stress: How Will Employees React?

by LizStevens | Mar 5, 2020 | Blog

Coronavirus and financial stress: how will employees react? They’re worried about losing pay, their jobs and being unable to afford the costs of healthcare if they’re infected with COVID-19.

Update: The number of coronavirus cases and deaths in the U.S. were updated as of April 13th, 2020.

There are more than 500,000 known cases of the new coronavirus, COVID-19, in the U.S. and over 20,000 people have died. Stores everywhere are selling out of hand sanitizer, face masks, groceries and household supplies as Americans panic about an outbreak reaching their neighborhood.

Employees, especially those in industries like hospitality, retail, healthcare and food service are fearful of what will happen if they’re infected with the coronavirus. Without the ability to work remotely, they worry about losing pay or their jobs while they’re quarantined.

“We’re seeing a significant number of employees register higher levels of financial stress in the past two weeks, which isn’t much of a surprise given the financial ramifications of catching coronavirus,” said Ilyce Glink, CEO of Best Money Moves.

More than 75 percent of employees live paycheck-to-paycheck. Nearly 40 percent couldn’t come up with $3,000 if an unexpected expense arose in the next month, according to a report by Willis Tower Watson.

One thing is clear: The coronavirus is heightening the financial stress employees experience every day, further damaging employee productivity and engagement.

Financial Stress and the Coronavirus: How Will Employees React?

“Financial health is not just about income. The impact of financial problems on employees’ health and stress, even for those who aren’t living paycheck to paycheck, is unmistakable,” said Steve Nyce, senior economist, Willis Towers Watson.

Money is a significant source of stress for 90 percent of employees, according to research by Thriving Wallet. More than 60 percent of employees feel as though their financial difficulties are piling up so much they can’t overcome them and 25 percent make purchases they later regret when experiencing financial stress.

Even a high salary doesn’t always salve financial woes — 18 percent of employees making more than $100,000 annually live paycheck to paycheck. Some employees are unable to pay for basic needs like healthcare, while others are having trouble saving for retirement.

And for employees who get sick, high-deductible healthcare plans have shifted much of the cost onto the shoulders of already struggling employees, who must find a way to come up with the initial costs of care for themselves and their families. (As of this writing, it’s unclear whether the US will shoulder the cost of testing for coronavirus, if insurance will cover it, or if employees themselves will have to pay that cost. Regardless, if an individual is forced to quarantine, the financial cost will be painful.)

Willis Tower Watson defines those who are “struggling” financially as those who live paycheck-to-paycheck and have difficulty controlling spending. Over 60 percent of those who are “struggling” aren’t fully engaged at work. Close to 40 percent said money concerns keep them from doing their best at work. More than 40 percent of “struggling” employees reported suffering from stress, anxiety or depression over the past two years, compared with just 16 percent of employees without financial worries.

Roughly 40 percent of Americans don’t have emergency savings and skip medical care they can’t afford. If those employees get sick, they might not get tested and come to work sick, infecting colleagues and limiting productivity.

How Financial Wellness Programs Pay Off

Even in a good economy, the majority of employees say financial stress is their top stressor. In a bad economy, that number grows exponentially.

A good financial wellness program can ease financial stress and help employees boost their financial wellbeing. Willis Tower Watson found nearly 70 percent of employees who were given access to four or more financial wellness tools said their finances are headed in the right direction. Over 60 percent of workers said those resources met their needs and encouraged them to improve their financial situation.

“We believe, with the right actions and insights, employers can help lower the financial risks that workers face. Access to the appropriate benefits and decision tools is a great start. These employer resources should include supportive social connections, such as coworkers and family, all of which can help employees keep and enjoy more of their money and, ultimately, improve wellbeing,” concluded Shane Bartling, senior director, Retirement, Willis Towers Watson.

Best Money Moves is a mobile-first financial wellness program with a wide range of tools to help employees measure financial stress and then dial it down. Our Stressometer measures stress in 14 categories and uses artificial intelligence to push relevant, contextualized and personalized information, tools, and solutions to users to solve the biggest pain points quickly.

We have a library of over 700 calculators, articles and videos, a budgeting tool that does the math, and tells workers what their neighbors are spending in the same category.

Best Money Moves is also gamified, it features a point-based rewards system where users earn points every time they log in, work with their budgets, read articles and measure their stress. Each point translates into a chance to win a monthly contest.

How Will the Coronavirus Impact Your Business?

by LizStevens | Mar 3, 2020 | Blog

How will the coronavirus impact your business? Employers respond to the spread of COVID-19 with strategies to help employees who don’t want to get tested or take time off.

Update: The number of coronavirus cases and deaths in the U.S. were updated as of April 13th, 2020.

The Center for Disease Control (CDC) is monitoring an outbreak of respiratory illness caused by the new coronavirus, COVID-19. Over 500,000 cases have been detected in the U.S. since January 21, 2020, resulting in over 20,000 deaths.

There are a lot of workers out there who don’t have emergency savings and skip medical treatments they can’t afford. If those employees get sick, they might try to “push through it” and bring the virus to the workplace, infecting colleagues and further limiting productivity.

Mercer has released a report to help employers understand how the spread of the coronavirus will impact their employees and how they should respond to it.

How Employers Are Responding to COVID-19

The initial employer response to the coronavirus has been to stay informed, protect and minimize exposure and take precautions, according to Mercer. This is what companies are specifically doing to minimize COVID-19’s impact on their business:

96 percent of employers are not ending expatriate assignments.
72 percent postponed nonessential travel to countries where there are confirmed cases of the COVID-19.
68 percent are providing hand sanitizer in the workplace.
58 percent are arranging for greater flexibility to work from home.
58 percent are requesting self-quarantine of 14 days for staff that recently traveled to mainland China.
48 percent are providing masks in the workplace.
43 percent have instituted a mandatary self-quarantine.

How Will the Coronavirus Impact Your Business?

Nearly 90 percent of global employers are concerned about how the coronavirus will impact their businesses. Over 20 percent of employers are lowering threshold or target goals, changing or adding performance metrics, isolating China business and providing for automatic adjustment for the impact of the virus or allowing for discretionary adjustments at the end of the performance period to account for COVID-19’s impact on business results.

Employers fear a serious impact if a large proportion of their workforce is ill. In the U.S., where employees going to work with a common cold happens regularly, it’s a valid concern that an employee with untested COVID-19 could come to work and spread the illness throughout the workplace. Mercer recommends employers listen to what employees are asking for, address their concerns, set firm policies to keep sick employees away from work and provide protection or prevention supplies onsite to limit the impact of the coronavirus.

Review Your Business Continuity Plan

Mercer also suggests that employers review their business continuity plan to ensure they have a plan in place to handle global outbreaks of pandemics like the coronavirus. A good business continuity plan ensures continuity in the event of a disaster, enables ongoing operations and outlines procedures and instructions to follow in the face of a disaster; whether it is a natural disaster such as an earthquake or hurricane; a fire; a cyber-attack or a medical epidemic.

Employers can minimize employee panic by keeping up to date on reports from government entities like the World Health Organization, communicating updates frequently, following government guidelines, listening to employees and providing protection or prevention supplies.

Financial Stress, Health and Employee Wellness in 2020

by LizStevens | Feb 25, 2020 | Blog

Financial stress, health and employee wellness in 2020. New research highlights the mental and physical effects of financial stress on employees.

Financial planning is the best way to combat financial stress, but many Americans are ignoring the problem and only making matters worse.

Less than a third of Americans have a financial plan in writing, according to research by Charles Schwab. More than 40 percent of them say it’s because they don’t think they have enough money to merit a formal plan, close to 20 percent say it’s too complicated and almost 15 percent say they don’t have enough time to create one.

Financial Stress and Health Statistics for 2020

Financial stress is significantly impacting the lives of Americans. A report by Thriving Wallet, a new partnership between Thrive Global and Discover, found:

90 percent of Americans say that money has an impact on their stress level.
65 percent feel like their financial difficulties are piling up so much they can’t overcome them.
40 percent wish they could have a ‘fresh’ financial start.
40 percent say managing their money on a daily basis limits the extent to which they can enjoy their day-to-day life.
25 percent make purchases they later regret when experiencing significant stress.

Financial stress has a negative effect on individuals’ attitudes towards money and research by Capital One and The Decision Lab found that the more stressed Americans are, the less likely they are to make smart decisions when it comes to spending and saving.

How Financial Stress Impacts Health

It’s bad enough that financial stress skews individuals’ outlooks on finances and impairs their decision making, but its ability to negatively impact immune systems and overall physical health is worse. The same report by Thriving Wallet asked Americans to report negative finance-related impacts on health and found that financial stress effects:

Physical Health (21 percent)
Blood Pressure (17 percent)
Respiratory Symptoms (15 percent)
Somatic Issues (20 percent)
Rates of Tension (25 percent)

Nearly 35 percent of Americans report losing sleep to financial stress, and almost 25 percent of them experience symptoms such as insomnia, broken sleep, fatigue on waking, nightmares and night terrors.

Financial Wellness Programs in 2020

Financial stress costs employers an estimated $250 billion per year in lost productivity and absenteeism.

Over 30 percent of employees don’t have a written financial plan because they think it’s too complicated or they don’t have enough time. Effective financial wellness programs, like Best Money Moves, make it easy for employees to build a financial plan and track their goals.

More than 20 percent of employees told the National Financial Educators Council (NFEC) that they don’t have anyone trusted to turn to for financial guidance. Features like Best Money Moves’ Money Coaches give employees access to trained professional financial counselors who can help them make smarter decisions with their money. Best Money Moves also hosts a library of 700 articles, videos and calculators that employees can use to build their knowledge on everything from investing to co-signing loans to buying their first homes.

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.

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How to Manage Politics at Work

by LizStevens | Feb 19, 2020 | Blog

How to manage politics at work. Discussing politics at the office can be distracting, stressful, reduce productivity and inhibit collaboration.

Employees are stressed out about the upcoming presidential election.

Nearly 80 percent of employees discuss politics at work and for more than 40 percent of them, it has impacted their ability to get work done, according to a new report by Gartner.

“During times of social and political change, employees expect more conscious action and policy from their organizations,” said Brian Kropp, chief of research in the Gartner HR practice. “To minimize the negative impacts of politics on the workplace, HR leaders must ensure that employee emotions and behaviors associated with the current political environment don’t distract and disengage the workforce or create a hostile work environment.”

Discussing Politics at Work

More than 25 percent of employees say discussing politics at work has a moderate or significant impact on their ability to do their jobs. Over 30 percent say talking about politics at work is stressful or frustrating.

Bringing up politics at work can also make it harder for employees with differing political views to work together. Nearly 40 percent of workers say the topic of the 2020 U.S. presidential election has led them to avoid talking to or working with a coworker because of their political views.

How to Manage Politics at Work

As the 2020 U.S. presidential election nears, Gartner recommends HR leaders focus on three areas to manage increased political expression and activity in the workplace:

1. Determine the Right Political Expression Policies for the Organization.

Gartner’s Election 2020 Survey found that at organizations with political expression policies, over 75% of employees agree with these policies.

After verifying federal, state and local laws that may have implications on regulating employee speech or activity, HR leaders should use their organization’s culture as a guide to determine what types of regulations to put in place around political expression in the workplace.

HR leaders should focus on clearly articulating the policy’s goals and the prohibited activities and behaviors, as well as disciplinary action taken if the policy is broken. Organizations should consider which forms of political expression are most likely to have the greatest impact on their workplace, rather than attempting to shut down all forms of political expression. HR leaders should work with managers to ensure the policies are enforced consistently.

2. Emphasize Organizational Commitment to Diversity and Inclusion.

Gartner found that in February 2020, 29% of employees witnessed at least one instance of unacceptable treatment of a coworker because of their political beliefs, including being called offensive names, being avoided by colleagues or being treated unfairly.

HR leaders should emphasize the organization’s commitment to ensuring a safe and inclusive work environment for all employees via their commitment to diversity and inclusion. HR leaders can emphasize the organization’s commitment to D&I by creating a space for safe, relevant communication about the election and reinforcing existing policies, processes and programs on workplace abuse, discrimination, harassment and bullying.

“To ensure employees remain focused and feel safe at work, HR leaders must train managers so they are well-equipped to support employees during the election process and deal with political conflict within their teams,” said Caroline Walsh, vice president in the Gartner HR practice.

3. Equip Managers to Support Employees and Address Political Conflict.

Managers play a critical role in mitigating risks associated with political expression in the workplace. HR leaders can help managers minimize the disruptive effects of politics in the workplace in several ways:

Sense and respond to the need for support. HR leaders must help managers recognize signs of distress among their employees, both directly (through conversations) and indirectly (through observation).
Monitor political discussions. HR leaders must partner with managers to monitor political discussions among team members, as well as address and manage sensitive political conversations between team members.
Model the right behaviors to reduce the likelihood of misconduct. HR leaders must ensure the managers at all levels understand organizational values and ethical standards so that they can effectively communicate and demonstrate them across the organization.

5 Strategies to Brace for a Recession

5 Strategies to Brace for a Recession

1. Rethink Your Financial Situation

2. Pay as Many Bills as You’re Able to

3. Take Advantage of Local and Government Assistance

4. Save as Much as Possible Into Your Emergency Fund

5. Keep Tabs on Your Financial Situation – and Make the Most of the Guidance We Have at Best Money Moves

More on Topics Related to 5 Strategies to Brace for a Recession

Coronavirus and Financial Stress March 2020

Coronavirus and Financial Stress: How Will Employees React?

Financial Stress and the Coronavirus: How Will Employees React?

How Financial Wellness Programs Pay Off

Read More on Topics Related to the Coronavirus and Financial Stress

How Will the Coronavirus Impact Your Business?

How Employers Are Responding to COVID-19

How Will the Coronavirus Impact Your Business?

Review Your Business Continuity Plan

Read More on Topics Related to How Will the Coronavirus Impact Your Business?

Financial Stress, Health and Employee Wellness in 2020

Financial Stress and Health Statistics for 2020

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Financial Wellness Programs in 2020

More on Financial Stress, Health and Financial Wellness Programs

How to Manage Politics at Work

Discussing Politics at Work

How to Manage Politics at Work

1. Determine the Right Political Expression Policies for the Organization.

2. Emphasize Organizational Commitment to Diversity and Inclusion.

3. Equip Managers to Support Employees and Address Political Conflict.

More on Topics Related to Employee Wellness and Office Culture

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