Northwestern Mutual Archives

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.

How Many Americans Struggle with Financial Stress? The Answer May Surprise You

by Emily Pfund | Oct 28, 2016 | Blog

How many Americans struggle with financial stress? The answer may surprise you. Even though the Great Recession is mostly behind us, the majority of Americans are still stressing out about their finances.

In a recent study by Northwestern Mutual, 85 percent of people surveyed said they feel financial anxiety and 28 percent said they worry about their finances every day. On top of that, 36 percent said their stress about financial issues has increased, rather than decreased, over the last three years.

That’s a lot of financial angst. It takes a toll, and not just in one area of your life. Northwestern Mutual asked these financially stressed adults how their financial stress impacts the rest of their lives and here’s what they said:

70 percent said it’s negatively impacting their happiness
70 percent said it’s negatively impacting their moods
69 percent said it’s negatively impacting their ability to pursue their dreams or interests
67 percent said it’s negatively impacting their health
61 percent said it’s negatively impacting their home life
51 percent said it’s negatively impacting their social life
41 percent said it’s negatively impacting their career

Basically, the study found that stress and anxiety about your finances bleed into almost every other facet of your life. It’s difficult to focus on your job or enjoy downtime with friends and family if your focus is always on your money and how you’ll make ends meet this month. And, money continues to be the top-cited factor in divorce.

An employee’s financial stress impacts the people around them at work too. For example, A report from Health Affairs found that employees reporting high levels of stress cost their employers an average of $413 more per year than their more relaxed coworkers, according to the Consumer Finance Protection Bureau. Add that to the business costs of a stressed employee’s reduced productivity, and employers have a big interest in seeing that their employees are financially stable.

The CFPB’s report also cites a study that found employees who underwent nine hours of classroom financial wellness training and had up to five one-on-one counseling sessions with a financial planner measurably improved their financial health. Employee’s requests for loans from their 401(k) accounts – often a last-ditch attempt to make ends meet – stopped entirely and their installment debts decreased by 14 percent. They were also less likely to be paying their bills late.

We know that financial stress isn’t limited to your finances. That’s why the Best Money Moves team is so dedicated to helping people dial down the root causes of financial stress. We ask employees to tell us what’s stressing them out, and we provide the information and tools they need to target that stress point and relieve it, whether they need to get out of debt, build a savings safety net or work toward their financial goals. If they ever need guidance along the way, our accredited Money Coaches are just a phone call away, 24 hours a day.

Want to try it for yourself? Email us at info@bestmoneymoves.com to get a free trial!