Despite this pressure, there are a number of ways for each of us to protect ourselves financially. And it starts with understanding financial wellness and exploring the right steps to get there. In simple terms, financial wellness means being able to manage your day-to-day finances, be protected against unplanned expenses and plan and save for future goals.
According to MetLife’s 2018 U.S. Employee Benefit Trends Study, half of employees, 52%, report living paycheck to paycheck. Forty-six percent also said they feel overwhelmed by financial decisions, and 53% worry about their future because of their financial situation. With stats like this, it’s no surprise companies are stepping up to provide benefits to not only help their employees combat this stress but also provide the tools to stay on track financially.
The benefits of benefits
The employee benefits you receive at work are the building blocks of financial wellness. To uncover additional ways to protect yourself, investigate your voluntary benefit options and see what is available to you. What many people don’t realize is that lesser known benefits, such as critical illness insurance, accident insurance and hospital indemnity plans, can offer financial protection if something unexpected occurs. They pay a lump sum directly to you that you can use as you need, whether that means covering unexpected medical bills or your family’s household expenses during a stressful time.
Education is key
To become financially well, it’s important to educate yourself about the variety of resources available. This includes saving, investing and budgeting tools, as well as paying down debts. You should also take the time to see if your employer offers a financial wellness program. Wellness initiatives such as crisis loan programs and financial counseling are examples of tools that can give employees a leg up on their financial priorities and help them further reduce debt.
Divide and conquer
Effectively managing your finances means taking a multi-faceted approach. We’ve talked about employee benefits and programs you can leverage at work, but don’t forget about these quick-wins for success too:
–Review and track household spending patterns. It’s often the little purchases we don’t even think about that add up.
–Develop and follow a spending budget (weekly or monthly – whichever best suits you).
–Build your savings. Save a set percentage every pay period.
–Create an emergency fund. Keep this separate from your savings and everyday accounts.
–Save for long-term goals like a down payment, children’s education and retirement.
Facing your finances head-on is an intimidating idea, but trust me, prioritizing financial wellness and implementing these simple practices will not only help you manage money day-to-day and be prepared for the unexpected, it will also set you up for a lifetime of financial success, not stress.
[i] 2017 Federal Reserve Board Economic Well-Being of U.S. Households Study.
[ii] Center for Financial Services Innovation, Global U.S. Financial Health Pulse Survey, 2018 – sponsored by MetLife Foundation