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Study finds employees experiencing increased financial stress due to an “awakening” of their financial shortfalls; woman with children in lower income brackets are most at risk of financial stress.
El Segundo, Calif. – Financial Finesse, the leading provider of unbiased workplace financial wellness programs, has announced the release of its latest research report analyzing U.S. employee financial stress in 2013. The report found that financial stress increased significantly in 2013, with 23 percent reporting “high” or “overwhelming” levels of financial stress compared to only 18 percent in 2012 and 19 percent in 2011. The report also found a shift in the causes of financial stress, with fewer employees citing external factors like the stock market and U.S. economy as the main cause of their financial stress, and more citing internal factors like not having control over their finances or thinking they will be unable to meet their future financial goals.
Key findings from the report were:
- Employees are recognizing that their financial vulnerabilities are most likely resulting from factors they themselves can control rather than external factors like the U.S. economy and stock market.
- Despite more confidence in the U.S. economy and stock market, employees may be experiencing more anxiety over the uncertainty of achieving future financial goals. The percentage of employees who reported concern of not being able to meet future financial goals as the main cause of their financial stress rose from 35 percent in 2012 to 42 percent in 2013.
- Gender, age, income, and the presence of minor children are primary indicators of financial stress. High or overwhelming levels of stress were reported by 27 percent of women compared to 17 percent of men; 25 percent of employees under age 30 compared to 14 percent of those ages 55 and older; 37 percent of employees making less than $60,000 a year compared to 14 percent of those making over $100,000; and 29 percent of employees with minor children compared to 19 percent of those without minor children.
Liz Davidson, CEO and founder of Financial Finesse, says that employees are experiencing an awakening which appears to be stemming from a growing realization that they are ultimately responsible for their financial wellness.
“Now that the economy has stabilized for the most part, employees are taking the opportunity to assess their situations in more detail,” Davidson says. “They’ve stepped on the financial scale, so to speak, and are going ‘Wow, this is worse than I thought!’ This is a good thing even if it is causing them to feel more stress over their circumstances because they seem to recognize that they can no longer point to the stock market or the economy as the reason for their discomfort; they’re taking action to address their vulnerabilities through factors they themselves can control.”
This awareness appears to be stimulating more participation from employees in financial wellness programs.
Greg Ward, the firm’s Think Tank Director, says the firm has seen a sharp increase in the number of employees that are running retirement calculations, taking financial wellness assessments, and attending one-on-one financial planning sessions with Financial Finesse CERTIFIED FINANCIAL PLANNER™ professionals. According to Ward, utilization of these services among active clients rose 32 percent in 2013. On top of it, employees are feeling more confident in their decisions after participating in the education. Over 90 percent say they feel more comfortable with their financial situations after participating in a one-on-one financial planning session.
With employers who are implementing financial wellness programs seeing success in improving employees financial behaviors, Davidson says the increase in stress levels is a reminder that education must always be seen as a process, never an event, and warns that employers who have workforces made up of employees facing significant levels of financial stress are at risk of increased health care and delayed retirement costs.
Davidson notes, “Employers can have a critical impact on the improvements employees make during this time of awareness, but only if they approach financial wellness from a long term perspective.”