Guest blogger: Peter Dunn, Personal Finance Expert
To understand the need for financial wellness programming in the workplace, you must first come to terms with some very uncomfortable truths. Americans are consistently making increasingly poor financial decisions. In fact, our country’s economy is built on the back of these poor decisions. If Americans only purchased cars they could objectively afford, houses they could objectively afford, and saved for retirement correctly, the economy would collapse. Yes, that’s a very dramatic statement. And yes, it’s true. Yet despite this reality, Americans have an unreasonable and unfounded confidence in their ability to navigate the financial waters of life.
This is Where the Problems Begin.
In 1975, 88 percent of private sector workers were covered by defined benefit retirement plans (pensions). Simply put, a pension is when you stop working, yet your lifelong employer continues to pay you until you die, and then they pay your spouse until they die. Pretty awesome, right? It certainly was. Was. Today around 10 percent of private sector workers are covered by a pension, which is awful when you consider about 50 percent of Americans have less than $10,000 saved for retirement. Combine these two gut-wrenching statistics with the impending collapse of the social security system, and you have yourself quite a nasty little cocktail.
Sit with those realities for a moment. A group of people who are making increasingly poor financial decisions are heading toward a period in their lives in which fewer economic resources are available than any other time in modern history. We have a retirement crisis, the likes of which we have never seen before. Our retirement accounts are virtually empty. Instead, our retirement funds are tied up in our homes, cars, travel soccer clubs, smartphones, and insatiable coffee habits. Either the entire financial system must change around us, or we must change. We must start doing the things we’ve always known we should do, but have never done.
That’s the definition of financial wellness.
Financial wellness is helping people make financial decisions they know they should make, but are unwilling to make. Financial wellness has nothing to do with math. Financial wellness has nothing to do with improving credit scores. Financial wellness is 100 percent about behavior modification.
Your workers aren’t just making poor financial decisions at home. Their habits crossover into their decision-making in the workplace.
We are not healthy when we continue to make damaging decisions we know we shouldn’t make. At this pace, even if workers are able to convince themselves they might be able to retire, savings levels indicate they will quickly run out of money.
The solution is quality financial wellness programming. Don’t mistake this directive. Financial programming based on the premise that we need to be better borrowers will not suffice. We don’t need to be better borrowers. We need to be better at accumulating money.
Improve both the long and short term financial prospects of your company’s most valuable asset – your employees. Investigate behavior-based financial wellness programming today.
What to do next:
Check out Peter Dunn’s Workplace Wellness programs, and complete his FREE Wellness Assessment to see if your company has a healthy financial culture.
Read this article by Hope Health’s President, Shawn Connors: Could Wellness Programs Work as Part of a Financial Literacy Program?
Peter Dunn (aka Pete the Planner) is a USA Today columnist, Good Morning America guest, radio host, personal finance expert. Find out more about his worksite financial programs at petetheplanner.com.