The global pandemic has been a wake-up call for so many when it comes to their finances. As millions were laid off, furloughed, or had shifts reduced, very few had savings to fall back on.
A recent study revealed that 65% of hourly workers don’t have any savings account; 38% said their only method of saving is keeping a wad of cash at home. Younger people are likely to be particularly hard hit by the economic fallout of the crisis for several reasons. For instance, experience shows that younger workers are often the first to have their hours cut or be laid off. Many young workers are in “non-standard forms of employment,” such as part-time, temporary, or ‘gig’ work. Lastly, young people commonly work in sectors and industries that took the hardest hit from the COVID-19 pandemic. Wholesale, retail, accommodation, and food sectors (as shop assistants, chefs, waiters, etc.) took a hefty beating.
In these uncertain times, there has got to be a better way. And believe it or not — talking to your boss may be the first step to begin the journey on a path to financial wellness.
The bonds between employer and employee have been severely strained during the pandemic. The fear of losing your job at any moment keeps employees on edge. High anxiety is not just bad for your health, it’s bad for business. Just knowing you have some sort of nest egg to fall back on can be a game-changer. So what can your company do to help you create a long-term financial wellness plan?
Here are three benefits that your boss can offer to help you rest easier at night:
401(k) Plan
Nothing says “we support you” like having a company match your bi-weekly contribution to a 401(k) plan. Companies can actually match up to 100% of your contribution, which means the more you save, the more you can make. This signals to the employee that “we are in this together” and motivates them to contribute more. This also provides a gateway to begin investing your money in the stock market. The Dow has risen about 6,000 points in the last 3 years. Still, our research indicates 63% of hourly workers have no stock and, therefore, can’t benefit from a growing economy.
On-Demand Pay
Waiting two weeks to get paid is an antiquated relic of the past. Having the ability to access your pay as you earn it to pay bills on your own schedule — without having to wait for payday — is a must these days. A recent study showed that those with the on-demand pay benefit, DailyPay, were able to save over $1,200 a year by avoiding overdraft fees, late fees, etc.
Thousands of companies now offer their employees an on-demand pay benefit, which also helps them recruit and retain staff. When it comes to savings, the research indicates that 63% of those polled would save more if there was an easier way. DailyPay actually has a SAVE feature that allows you to allocate money from your paycheck to be earmarked for savings.
Student Loan Assistance
Student debt is financially crippling an entire generation of college graduates. With over 70% of students taking out loans, averaging over $30,000, our best and brightest are entering the workforce crippled with years of debt. Most Americans with student debt are young. However, many companies offer employees both tuition reimbursement or assistance to pay off some of that student loan debt. Research shows that the faster an employee can get out of debt and get on a path to fiscal wellness, the more focused and productive they will be.
Key Takeaways
Let’s face it, in 2020, it seems like we have another frightening thing to worry about every day. From the global pandemic to killer hornets to Kanye West’s presidential aspirations, life is certainly a bit complicated right now. But having an action plan when it comes to long-term savings might make it all just a little less daunting.