budget Archives - Best Money Moves

Most Americans Live Paycheck-To-Paycheck. Here’s How Employers Can Help

by Amirah Ford | Jul 19, 2022 | Blog

Most Americans live paycheck-to-paycheck. Here’s how employers can help. With inflation the highest it’s been since the 1980s, more and more families are living paycheck-to-paycheck. What can employers do to help their teams?

Inflation has caused food, gas and housing prices to skyrocket. Between May 2021 and May 2022, inflation hit 8.6% — the highest increase since December 1981, according to the Bureau of Labor Statistics — and economists are unsure when prices may fall.

Trying to make ends meet, about 60% Americans are living paycheck-to-paycheck, according to a LendingClub report, making it the primary financial lifestyle in the U.S.

Living check-to-check isn’t sustainable — it leaves people susceptible to increased debt and high-stress levels. Here are 4 ways companies can help employees manage rising inflation and create viable money habits for the future.

1. Offer budgeting tools and 1:1 money coaching to help employees living paycheck-to-paycheck.

Even with a high income, poor budgeting or not budgeting at all can create a paycheck-to-paycheck lifestyle. For instance, although 7 in 10 Americans have a budget, only 25% have detailed budget, according to a TIAA report. Without a detailed budget, it is difficult to accurately keep track of how much money is coming in and going out each month.

To help employees break with a paycheck-to-paycheck lifestyle, companies can offer budgeting tools and personalized money coaching. These resources are to help employees focus on necessitates and better allocate their money, regardless of their income level. Moreover, it can help identify savings gaps or where to cut down spending.

2. Provide student loan repayment assistance.

Since the federal student loan pause started in 2020, repayment has not been top-of-mind for most Americans. However, this is expected to change starting August 31, 2022 — when student loan repayment, interest and collections pause is scheduled to expire. This means millions of Americans will have to reintegrate student loan payments into their monthly budget, but with rising inflation, many are worried if they can afford to resume payment.

By providing student loan repayment assistance, firms can demonstrate a commitment to employee financial wellness and wellbeing. Not only will this help employees lower their student loan debt, but it will also help them weather inflation and financial stress.

3. Invest in mental health resources for those living paycheck-to-paycheck.

Money stress does not function in a vacuum — it can bring on emotional stress, physical stress and even wear down someone’s mental health. According to TIAA, 59% of Americans carry financial stress and with prices on the rise, this number may grow.

To help dial down stress levels and support all-around employee wellbeing, firms are investing mental health resources like talk therapy and meditation apps. Consider ways your company can make mental health resources more affordable and accessible for employees at all paygrades.

4. Expand financial literacy and education opportunities.

With the right tools and resources, companies can help employees strengthen their financial wellbeing and knowledge, simultaneously. At every budget, there are ways institute financial wellness programming and resources, whether it be tax filing workshops or retirement planning seminars.

Companies are most successful when they listen to the wants and needs of their own employees, then creatively follow through in their financial wellness offerings and approach. When searching for a quality financial wellness program, try to avoid one-size-fits-all solutions and keep an eye out for customized services (e.g., 1:1 money coaching, mortgage and loan calculators and other personalized solutions).

Need a top-notch, budget-friendly financial wellness program? Try Best Money Moves!

Best Money Moves is a mobile-first financial wellness solution designed to help employees dial down their financial stress and meet their most top-of-mind financial goals. With budgeting tools and personalized money coaching, users can easily receive compressive financial advice right from their phones.

Best Money Moves is designed to guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Are Your Millennial Employees Asking These Questions About Building a Budget?

by Emily Pfund | Mar 29, 2017 | Blog

Building a budget is one of the first – and most important – steps to “adulting” (AKA managing your finances like an adult) and it’s one of the biggest stumbling blocks for Millennial employees.

One in four millennials has $30,000 or more in student debt – a massive obligation for someone just starting out in their career and who is also trying to save for retirement or upcoming life events like marriage, buy their first home or start a family.

Nearly a third of Millennials worry most about their student loans, over all other debt, and 56 percent worry about repaying student loans all the time, or often, according to a survey from American Student Assistance, a private nonprofit organization.

Millennial employees need to build a budget and set up a plan for paying down their debt, but many don’t know where to start. After all, they probably didn’t have any formal education on the topic: A recent study found that 54 percent of adults think a money management class in high school would have benefited them more than the rest of their education.

And much of the information Millennials find online doesn’t seem to fit their lives or financial situations (like this column suggesting Millennials could afford to buy a home if they just stopped buying expensive avocado toast).

Best Money Moves founder and CEO Ilyce Glink has been busy talking to employers and employees around the country about the financial issues they struggle with most. The young employees she’s talked to are particularly stressed about learning how to budget and balance their growing list of financial obligations.

Here are some of the questions they’re asking:

What are the best strategies for building a budget?
How do I better organize my existing budget?
How can I save money while still having a fun social life?
How can I save for retirement while paying off student loans or credit card debt?
How do I budget for the high cost of living in a city?
How do I budget for upcoming life events such as getting married, buying a house or having a baby? How do I figure out how long it will take me to save up for those events?

The fact that young employees are asking these types of questions is a sign that they recognize they haven’t solved the thorny issue of wanting to live a particular lifestyle while managing a limited amount of cash. Knowing what you don’t know — and seeking the answers you need — is the first step to reducing financial stress and building a more financially secure future.

When employees ask these questions, employers need to step up to help them find answers.

That’s where Best Money Moves comes in. We help employees assess their financial stress, learn how to manage and solve financial problems, pay down their debt and build the best budget for their unique financial situation using simple, easy-to-understand tools.

Let us help you help your employees manage their financial lives in a better, smarter, more efficient way. That will help dial down their financial stress, improving their productivity, retention, and engagement – big wins for you!

Call Best Money Moves today at 847-242-0550 to schedule a demo.

Student Loans Are Coming Due. Are You Ready?

by Ilyce Glink | Oct 5, 2016 | Blog

It’s the start of fall, a few weeks until Halloween, and another significant milestone as well; student loans are coming due for May 2016 graduates.

Federal student loans typically have a six-month grace period after graduation to allow borrowers an opportunity to find work, accrue some savings and prepare to start making payments.

Although this grace period sounds like a relaxing break, it can be a financially stressful time as recent graduates might be thinking about how their new monthly student loan bills will impact their monthly expenses. Studies have shown that Millennials are already more financially stressed than other working generations, so this upcoming shift could make things even worse.

Here are some of the ways student loans can impact the financial stress levels of your employees, and what you can do to help them manage this transition.

Student loan stress

Americans owe more in student loans than ever before. The average spring 2016 graduate has nearly $40,000 in student debt and many of these grads will be facing their first bill in a matter of weeks. The six month grace period is an opportunity to prepare for the higher bills that are now due each month, but for financially inexperienced recent grads it’s still difficult to anticipate these monthly payments – often hundreds of dollars – and then factor them into their budgets. The result is a shock to their system, and stress comes with it.

The more money you owe, the more financial stress you’ll feel. A 2015 study from the University of South Carolina found that the more debt a student loan borrower carries, the more likely they are to be depressed.

In the workforce, if you tend to hire younger workers, your employees are likely already paying down their student loans – 43 million Americans are – and the amount they owe could vary wildly. Even if it’s not their first payment they’re reacting to, struggling to cover them each month take its toll, especially when it’s not the only thing giving them anxiety.

Millennials are already stressed out

The American Psychological Association’s annual ”Stress in America” survey found that Millennials, including recent college graduates and young employees, have the highest self-reported stress levels of any generation in America. Student loans have a lot to do with this, as many of these young employees are handling things like a budget, an apartment lease and a full-time job for the first time on top of their loans.

To make things worse, the student loan payment process isn’t always as easy as it should be. Even if a borrower wants to make their payments on time and in full, the CFPB notes that plenty of obstacles can get in their way, like a lack of answers from their loan servicer about whether they qualify for more manageable payment plans. In some instances, loan servicers can intentionally apply borrowers’ payments in a way that causes them to pay more interest or fees in the long run, rather than helping them pay off their loans as quickly as possible. These issues, combined with debt inexperience and ignorance (in some cases), means you’ll be dealing with financially stressed employees in your workplace.

How employers can help

If your workers are showing signs of severe financial stress or depression, whether they’re less focused or productive, they’re missing work frequently due to anxiety-related illnesses or they’re worried about managing their money in the face of student loan payments, you can help. When it comes to financial knowledge, a little bit can make a huge difference.

Unfortunately, student loan burdens are common for employees today, but financial literacy isn’t. The more you can help educate your workers about setting a proper budget, maximizing their emergency savings and efficiently paying off their debt, the less stress they’ll feel about their finances. The result is more productive employees who are focused on accomplishing their money goals instead of worrying about their money fears.

3 Simple Budget Saves That Will Lower Your Financial Stress

by Ilyce Glink | Sep 21, 2016 | Blog

Financial stress is overwhelming – and more so when every little thing seems to pile on top of each other.

With so many financial issues for you to tackle, sometimes it seems like a miracle is the only possible way forward.

Not so. While financial stress can be overwhelming, small budget saves can help you re-float your boat, save and pay off debt. In short, small changes actually can make a huge difference over a relatively small period of time.

You’ve got to keep it simple. Much like paying off a smaller debt first to gain a sense of victory and motivation, your employees can revise their financial strategies in small ways to make things easier for themselves.

Here are three budget saves you can put into place today that will put you on the path to financial success. They won’t alter everyone’s money situation overnight, but give them some time, and keep working at it, and the benefits will show up.

1. Switch to a cash budget. When someone can’t get their spending under control, they end up compounding their problems by piling up credit card debt and high-interest charges. Switching to a cash budget removes these risks by giving them a limited amount to spend that they know they can afford. Here’s how it works: Decide how much you’re going to spend each week, then take out that cash from the bank or ATM and commit to not spending any more until the next week. It’ll take time to get used to having cash in your wallet (we’ve all become so used to the cashless society) and you’ll need to adjust to new spending habits and plan around what you can and cannot afford. Even if you blow your budget for the first few weeks, just stick with it. You’ll soon see positive changes. One study by the Urban Institute showed that those who were reminded throughout the month to choose cash over credit were able to lower their credit card debt. And, that’s key.

2. Make savings – and payments – automatic. Staying on top of multiple monthly payments, from utilities and rent to credit cards and student loans, can be difficult and barely leaves room for you to think about savings. Switching to automatic payments and savings, however, gives you a chance to avoid late charges and increase your savings without thinking about it. Often, employers will allow employees to set up recurring deposits from their paycheck to a savings account each payday to build up emergency or retirement savings without any additional steps. They can pick an amount that’s affordable and realistic, even $20 per month, and over time they may be surprised by how that amount grows. Using automatic payments for recurring monthly expenses can do the same, streamlining payment processes and giving your employees more time to focus on lowering their stress in other ways.

3. Cut out or reduce one expense each month. If you’re in serious money trouble, nothing dashes your hopes for a solid financial future faster than believing that you’re powerless to change it. One way you can take back control is to identify and reduce – or cut out entirely – one expense each month. This could be your cable or cell phone package, commuting costs, money spent dining out or even a morning coffee. Encourage your family (if you have one) to find ways to lower their monthly bills, whether it’s avoiding a splurge or calling the relevant company to ask about other options. Not only will you lower your overall expenses it will help you reduce your financial stress because you’re in much more control of your cash.

Your Best Money Moves: If your employees are struggling with their finances, gaining some knowledge and feeling support from their workplace can make a big difference in their stress levels, if only by letting them know they’re not alone. You can start by sharing small changes like these and encouraging and celebrating the efforts of your workers. Even when the solution is simple, the work behind it can be difficult and your employees will appreciate your support when it comes to their financial stress.

How Financial Stress Rises with Your Rent and Home Expenses

by Ilyce Glink | Sep 7, 2016 | For Employers

There are certain expenses everyone deals with no matter how extravagant or restrained their lifestyle. Housing is at the top of the list, both because you need a place to hang your hat and because it’s usually the single largest bite out of your monthly take-home pay.

Unfortunately, this is the most basic and important of expenses. Whether it’s a house, apartment or condo, everyone needs a place to live and this basic expense can quickly become your biggest source of financial stress.

According to a September National Rent Report by Zumper, eight of the 10 most expensive rental markets in the country have either maintained their spot or moved higher on the list, even as prices for one and two-bedroom units dropped slightly for the first time all year. This might sound like business as usual but for employees looking to decrease their financial stress, it’s bad news for their budgets.

Employees can downsize their budgets in many ways, from cutting meals out to limiting their entertainment spending, but housing is a relatively fixed cost and it’s hard to find wiggle room until your lease comes up for renewal. And then, where do you go if rents are rising everywhere you want to be? one staple that has lost most of its wiggle room. If you want to know what your employees are stressed about, housing is one area you can’t ignore.

What’s the fix?

The recommended rule for figuring out how much to budget for housing is to cap it at 30 percent of your income, leaving at least 60 percent of your budget for other expenses like food, healthcare, debt payments and savings. The problem for an increasing number of employees is that these figures have made maintaining this ratio difficult. If employees want to spend under $1,000 each month on rent, for example, they’ll need to look to the 30th most expensive city on this list, downsize the space they live in, move to another neighborhood or find an alternate way to manage rising rent or housing expenses. And until they can make this change, they’ve got less room in their budgets for other necessities.

Changing a housing situation isn’t impossible, but it is a recurring cost people are locked into for months or years at a time, that will affect them every day. If that cost climbs too high, or there is an unexpected jump, it creates a cycle where that cost eats into the rest of their finances, increasing their financial stress and keeping them from making progress with their budgets, debts and retirement savings.

As an employer, you want to help defray this expense but may be at a loss for where to start. There are small steps you can take, like offering transit assistance for your workers’ commutes or opportunities to work remotely, but the root of the problem is much deeper.

Employees have to get control over their budgets and learn how they can change their housing situation for the better. For some cities, moving to a new neighborhood may be the only viable option, but it’s one your employees have to discover in order to take action.

If you want to reduce financial stress in your workplace, talk to your employees and see what assistance they need. With the right knowledge and tools, they can decide on a solution that gets them to a stronger financial position. They can’t count on a major drop in their rent (it’s an expense that tends to rise over time), so it’s time to find a new way around this cost and get it back down to the recommended 30 percent threshold.

Whether it’s small changes or a big move, there’s no better time to get started than right now. You’ll be amazed at what a small savings on housing can do for the rest of the monthly bills and, consequently, your employees’ financial stress level.

Dustin Pellegrini is a senior web producer and writer at Think Glink Media, where he specializes in reporting credit and personal finance topics. He studied writing and visual media at Columbia College Chicago.