What's worse than having money troubles?
Finding out that those money troubles could cause you even bigger money troubles.
The Tea: Anyone who has ever experienced financial hardship can tell you that when money's tight, you feel it. At best, it means enjoying less of what you like, and at worst, worrying about whether you can even get what you need—and that breeds stress, anxiety, depression, you name it.
Those feelings don't just pop up when you check your bank account and drift away once you're done. They weigh on you day and night, wherever you go.
Most problematically, that includes work—you know, that place where you earn your money in the first place.
YATI Tip: One way to get your finances on track: Start building an Excel budget.
Technology-driven insurance firm YuLife has recently released a report (PDF download) detailing the results of a survey—conducted in partnership with market research firm YouGov—exploring the impact of financial wellbeing concerns on workers, as well as employees' experience in the workplace.
In short: Financial hardships at home can have an extremely negative impact on employees' ability to work, and work well—a vicious cycle that, if left unchecked, could send their money problems spiraling out of control.
Let's dig into the report for more details about this issue … and what employees and employers alike can do about it.
The Take: There's no hypothetical here: American workers are worried about their finances. According to the YuLife/YouGov survey:
- More than half (55%) of employees are worried about their finances.
- That figure is far worse among both women and those aged 18-24, where nearly two-thirds (63%) have money concerns.
As we mentioned above, financial woes can take an emotional toll, but that can also spill over into generally poor health as well. A third of those surveyed say financial stress is impacting both their mental and physical health—and that number worsens to 42% among the 18-35 cohort.
So, can that add up to an impact at work? According to a large majority of employees, absolutely—a full 70% of employees surveyed say they think "financial stress negatively impacts workplace performance."
That's a recipe for disaster.
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If an already financially struggling employee falls behind at work, they face a greater risk of losing that source of income and greatly compounding their money woes.
We already know that many of those workers don't have an adequate backstop. Americans are saving less—just recently, we nodded to a Primerica survey where nearly three-quarters of middle-income American households said they can't save for their future.
Could employers do more to help out? Certainly. But Americans' opinions about their workplace's role in this dynamic aren't as clear-cut.
As a whole, 45% of working American adults say that "it's a workplace's responsibility to improve their sense of financial wellbeing beyond paying a salary." But this opinion skews with age—on one end of the spectrum, 29% of those aged 55 or older agree with this sentiment, but on the other, fully two-thirds of 18- to 24-year-olds think the workplace is on the hook.
Workers feel more strongly about this point when it comes to seeking out new employment, however. A whopping 66% of working adults (and 73% of those 18-24!) say a company's ability to support their financial wellbeing influences their likelihood of applying for a job there.
Regardless of what their employees believe, employers don't appear to be doing enough. Just 13% of those surveyed think their workplace "has a comprehensive set of financial wellbeing policies and initiatives." Nearly a quarter (23%) say their workplace has zero financial wellbeing policies in place at all.
Even if they're not concerned about their employees' wellbeing, employers might want to reconsider anyways—even if it's just to help themselves.
"The cost of training and developing an individual, or using staffing agencies to replace them when they leave, is terribly expensive," says Tim O'Neil, Senior Workforce Solutions Specialist at TrueNorth Companies.
It can result in a shoddier product or service, too, and risks outright disaster.
"If workers are stressed about personal finances, they might not be focused on operating dangerous machinery, or giving the proper medication to a patient," he says. "You're running the risk of customer dissatisfaction, lower performance or even accidents and injuries."
So … what can you do?
First, let's be real: Some jobs simply do not pay enough. The hard, uninspiring short-term answer might be to find different employment opportunities, whether that's a new full-time job or a side hustle.
Where it's an option, begin developing better savings habits. Make more from your existing money, even if that's just by stashing your cash away in a high-yield savings account.
You could also talk to HR about your situation.
If you just winced at that suggestion, we get it. A workplace conversation about financial struggles feels downright taboo. "I think it's something that individuals aren't used to talking about," O'Neil says. "Especially if they have a career where they get paid well – they may not want to admit they're struggling."
Still, if you love where you work—and you just want better conditions—you might consider floating a couple ideas by HR that would keep company-wide employee morale high (and turnover costs low).
"Mental health support could be offered in the form of an Employee Assistance Program (EAP)," says Colleen Reilly, PhD, Wellbeing Strategy Consultant. "This is a free and confidential service for employees that provides support and practical advice on lots of different things, from finance, to stress, to family, to divorce, to legal advice."
"One of the groups I've worked with had 5,000 employees, and we had over 40% living paycheck-to-paycheck when we started a financial education program. Within 10 years, we'd cut that down to just 7%," O'Neil adds. "Just providing some baseline education around how to get the most out of your benefits, how to build a plan, how to leverage tax advantaged accounts, like health savings accounts or flexible spending accounts, can make a big difference."
You can download the report, which includes data from more than 1,200 workers surveyed, in PDF format.
That's it for this week! And we apologize for making you think about work during the weekend!
Riley & Kyle
Young & The Invested (Soon to be WealthUp)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.