Financial Wellness Has Both Practical and Intangible Implications
Financial worries are the most common cause of stress among both men and women, and financial wellness is closely linked with physical and mental health. But what does financial wellness actually mean? The phrase can be defined in both practical and intangible terms, according to agencies like the Consumer Financial Protection Bureau (CFPB).
In a recent report on financial wellbeing, the CFPB says there are four elements that go into a practical definition of financial wellness: feeling in control of your money, having capacity to address a financial emergency, being on track toward your goals, and having the financial freedom to make life choices.
Definition of Financial Wellness
The definition of financial wellness has both concrete and emotional aspects. Beyond just your savings and income levels, the term describes how you feel about your financial situation – that is, your money relationship. Some wealthy people experience heavy financial stress, while some low-income folks feel secure and satisfied with where they stand financially. Thus financial well-being has less to do with how much money you have than with your attitude and capabilities: do you have a budget you can stick to? Could you handle an unexpected expense? Do you feel overwhelmed, or do you feel inspired when you think about money?
Further, financial wellness means the ability to translate knowledge about money management into specific action. Becoming financially secure requires taking practical steps to set up workable systems, which helps people avoid the stress of financial problems. That’s why many companies now recognize that a financial wellness program in the workplace can boost employee morale and productivity.
“Try to save something while your salary is small; it’s impossible to save after you begin to earn more.” (Jack Benny)
“More people should learn to tell their dollars where to go instead of asking them where they went.” (Roger Babson)
“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” (Joe Biden)
How Money Experts Describe Financial Wellness
“Financial literacy is not an end in itself, but a step-by-step process. It begins in childhood and continues throughout a person’s life all the way to retirement. Instilling the financial-literacy message in children is especially important, because they will carry it for the rest of their lives.” (George Carl, Chairman of the National CPA Financial Literacy Commission)
“Financial health is a privilege that should be afforded to everyone – and it starts with being willing to have the conversation while also recognizing our own background and bias.” (Erin Lowry, Millennial personal finance expert, author, and speaker)
Above book or classroom learning, financial wellness demands practical action. Although helping people build financial knowledge is essential, learning has no value unless the person can apply the knowledge to changing his or her habits for the better. In other words, it’s not enough to know what a 401(k) plan is. You must be able to evaluate your specific options for retirement planning and contributions, and make qualified decisions that help you prepare. Otherwise your knowledge gets you no closer to secure retirement than someone who knows nothing about 401(k) plans.
Advantages of Financial Wellness Programs
The notion may seem rudimentary that helping people manage their money simply requires giving them high-quality financial education. But truly building financial capability that translates into behavior change and positive action is much more complex.
A workplace financial wellness program that works is one that not only quantifiably increases employees’ financial knowledge, but also supports the objectives of the sponsoring organization. A well-designed program for employee financial wellness not only increases employees’ overall physical and mental health, but also may positively affect the corporate bottom line. Developing such a program requires specialized expertise.
The NFEC has worked with several thousand organizations over the past 10 years to design top-quality programs centered around high-grade curriculum content, a vibrant user experience, and quantifiable outcomes.
Workplace Financial Wellness for Employees
Many employers today have workplace wellness programs, but only recently has financial education become a priority component of such programs. Companies are increasingly aware that personal finance problems contribute to employee stress, lowered productivity, and overall company culture.
Fortunately, an employer can take a proactive approach to address workers’ financial issues, increase their sense of well-being, and transform the working environment by offering employee financial wellness programs. Offering comprehensive financial education to staff also helps the company comply with DoL and ERISA regulations.
The measurable results of high-quality workplace financial education may be an immediate boost in an employee’s self-confidence or reduced personal stress. Over the long-term, as workers begin applying learning into real-world action, the positive outcomes can have even more dramatic effect on the workplace atmosphere.
Company financial education programs designed by the NFEC are proven to deliver excellent return on investment, boost productivity and job satisfaction, help companies avoid potential liability, and have long-lasting impact on employees’ lives.
The Importance of Selecting Best-quality Financial Wellness Educators, Consultants, and Resources
Should you wish to begin a workplace financial wellness program, the background of the presenter and quality of the educational materials should receive top consideration. The NFEC has assembled a network of certified financial educators, coaches, and counselors who have met top qualifications for compliance with industry standards. These certified financial wellness coaches feel passionate about helping others begin the journey toward financial wellness. They place highest priority on client success and achieve results through customized education, counseling, and accountability. In addition, NFEC curriculum resources are well-recognized as top-of-the-line in the financial education space.
Quotes about Financial Wellness
Influential individuals from all spheres are beginning to spread the word about the need for increased financial wellness. When prominent celebrities, politicians, economists, and educators speak out about the importance of financial education, their voices reach individuals from all backgrounds and demographics. And when the people as a whole support an initiative, policymakers take note.
The following quotes about financial wellness illustrate the rising interest in building financial wellness on a significant scale. The hope is that employers will become more aware of the negative effects of financial issues on employee stress and productivity, and take steps to implement financial wellness programs in their workplaces.
“Like all learning, financial education is a process that should begin at an early age and continue throughout life. This cumulative process builds the skills necessary for making critical financial decisions that affect one’s ability to attain the assets, such as education, property, and savings, that improve economic well-being.” (Alan Greenspan, economist and former Chair of the US Federal Reserve)
“We don’t invest in financial literacy in a meaningful way. We should be teaching elementary school children how to balance a checkbook, how to do basic accounting, why it’s important to pay your bills on time. First, education. Begin the learning process as early as possible, in elementary school. Second, encourage and support entrepreneurism. Third, policy. I know it’s a priority of the US Treasury to augment financial inclusion and increase financial literacy. We need more government agencies to emphasize that by providing generous support of efforts to increase financial literacy.” (Kabir Sehgal, author and corporate strategist, First Data Corporation)
“Being promoted to a top position in your organization, or even being elected to public office, does not suddenly endow you with financial literacy, if you did not acquire and develop it, earlier in your life.” (Strive Masiyiwa, businessman, entrepreneur, and philanthropist)
“Do not save what is left after spending, but spend what is left after saving.” (Warren Buffett)
“If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life.” (Billy Graham)
“The best thing money can buy is financial independence.” (Rob Berger)