Why should I be concerned about the financial problems my employees or members may have?
The crisis in personal financial management in these difficult times is overwhelming. Many people just don't have the training to meet the financial challenges that face them. A recent financial literacy survey conducted by the National Foundation for Credit Counseling showed that 41% of adults gave themselves a grade of C, D or F on their knowledge of personal finance, and only 42% track their overall spending. With regard to savings, 32% reported having no savings. Of these, 29% said they would charge an emergency expense to a credit card.
In 2008, average consumer debt (not including mortgages) amounted to more than $19,000, according to Federal Reserve data. Many households are strapped with enormous debt. Debt can start at a very young age and carry through adulthood. College students currently carry an average of 4 credit cards. Education is very often needed to break the cycle of debt.
The real question is; how can I not be concerned about my members and employees with statistics like these!
I don't think my employees have serious financial problems.
Many organizations believe this. However, look at what major studies have uncovered regarding most organizations:
- The percentage of financially troubled employees has been increasing from 1 in 10 over a decade ago to 1 in 4 now.
- 80% of financially distressed employees spend time at work dealing with their financial issues
- 32% have not yet started saving for retirement
- 20% spend more money than they have and are subsidizing lifestyles through credit
We already have a financial education program?
Many organizations tell us this. Here is what we have found over the past 20 years:
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Many organizations have a retirement plan provider that will happily talk to the employees about how they can put more money away for retirement. Unfortunately many employees need basic financial counseling assistance before they can even consider saving for retirement.
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Many Employee Assistance Programs developed years ago are simply referral lines and do not have the follow-through type programs necessary to help employees work through their issues over time or help employees deal more effectively with the 95% of their pay they spend as consumers.
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Issues that employees and members of an organization have, are often times, NOT the issues that present services are set up to handle. Many old style "financial assistance" program have not kept pace with the changing needs of the people who need and want them.
To find out what you can do to address these issues for employees and members click here.
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