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Financial Wellness in 2021: From Surviving to Thriving

 

No one needs a set of data points or industry reports to conclude that the vast majority of people are looking to the New Year with hope for some renewal and stability. Now that we have had a year of surviving twists and turns, it is time to find ways to thrive in 2021.

One powerful way to thrive and regain control in your life is to take steps towards your financial health. Even if eliminating debt isn’t yet on your list of New Year’s resolutions, there’s no denying that as we come off 2020 and the holidays (and holiday spending), many of us have larger credit cards bills knocking on the door. Whether it’s debt or long-term savings, now more than ever, financial burdens and challenges can be one of the most stressful. 

Here are a few ways to ease the stress, plan for the future, and maybe even make some space to relax and renew along the way. 

Credit Card Debt

There are a few strategies used to approach paying off this debt, but no matter which one you choose, one tough reality remains consistent – paying the minimum will keep you in debt for years. Every month that balance remains, even when you make regular payments, interest gets added. Anything you can pay above that minimum amount helps. Even $100 extra each month can save you thousands of dollars in interest charges.

You don’t have to figure out the best strategy for you alone. Companies such as BrightDime and Savvi Financial partner with companies to offer financial planning advice and programs to their employees. Check with your employer to see if they provide a similar financial wellness benefit to help you avoid debt. 

Unexpected Costs

No matter how hard we plan, situations and circumstances arise that require spending more than our paychecks can cover. For example, major home or car repairs can come out of nowhere and require immediate attention – not to mention the weight of unexpected medical costs or in the worst case, death.

A new roof could cost anywhere from $5,000 to $9,000, a new furnace $2,00 to $6,000. Replacing the transmission in your car could cost as much as $6,000 as well. Funeral costs pose a heavy weight to an already terrible time.2

The last thing anyone wants in these situations is to accrue more debt. Some people even attempt to avoid credit cards by borrowing from 401(k) plans or other high-interest loans, but these options are just as detrimental to long-term financial health. Instead, consider low-interest loan benefits that may be available through your employer such as Kashable, which offers low-cost and socially responsible loans to users. 

Retirement

Retirement is one of those inevitable phases of life that we all look forward to, but the more we actually think about it, we tend to get worried about the loss of a steady source of income.

If you do not prepare yourself financially, retirement can be quite depressing for you and your family. Retirement is often a time when income drops and expenses rise, making financial planning vital for leading a relaxed, stress-free life into retirement.

Things to consider as you begin planning:

Navigate the challenge of rising health care costs

Navigate the challenge of rising health care costs

  1. Retirement goals – What type of lifestyle would you like to live post-retirement? 
  2. Time to Retirement – How long you have until your planned retirement will determine the level of savings needed each month?
  3. Taxes to Investments – Remember to account for the after-tax rate of your investment returns.
  4. Estate Planning – Don’t forget to account for long-term health needs, life insurance, and how your wealth will be distributed. 

Companies such as BrightDime and Savvi Financial mentioned earlier for debt help can also help with retirement planning and saving.

For employers specifically:

As an employer, you know the importance of your employees. But what you may not know is that helping them achieve financial wellness after a legitimate financial crisis is one of the best ways to make sure both your employees and your business fully recover. Employees who are stressed about money cost your company in lost productivity, absenteeism and turnover. Providing guidance as they move forward from this and helping them to know that you care is vital for everyone to thrive.

With realities changing day-to-day, we're all functioning in a realm of unknown and worry. Lay-offs or temporary or permanent closures add to the immense amount of insecurity surrounding the workplace. The best thing you can do for your team is give them the tools and resources they need to be financially prepared for the unexpected.

So many of us are asking what the future looks like after the COVID-19 pandemic, and the truth is that no one really knows. But as an employer, if you’re not learning about your employees and how to help them in the midst of this crisis and insecurity, then you won’t be able to give them what they need. They need to hear “we will get through this” from you, and one of the best ways to say that is through a financial wellness program that meets them where they are and walks with them every step of the way.

Learn other ways you can help you employees navigate this unprecedented time through your benefits program in the guide Top Considerations for HR & Benefits Leaders During the Time of COVID.

Check out even more financial health resources in our Benefit Catalog, which includes more than 15 voluntary, year-round opportunities for wealth, health and lifestyle benefits. 

 

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1 https://www.creditcards.com/credit-card-news/covid-debt-anxiety-survey/

2 https://www.moneycrashers.com/types-unexpected-expenses-plan/