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What Is Financial Wellness and How Can It Help Businesses?

Employee wellness is the foundation of every successful business. If business or HR leaders didn’t know that before the pandemic, they sure do now—especially after the Great Resignation.

You just don’t have a chance at meeting your business’s key performance indicators without a well-rounded employee wellness program that benefits your team’s financial, mental and physical well-being. Think about your own life: When you’re stressed about money, your mental health goes downhill, and your physical health can quickly follow. Your employees are no different.

Let’s put it this way: If businesses don’t help their employees achieve financial wellness, both the business and its employees will suffer as a result. That’s why it’s so important that your employees are well—mentally, physically and financially. Seems simple yet scary (if you don’t have the right tools), right?

What Is Financial Wellness?

Financial wellness is when you take control of your money so that it doesn’t take control of you. That looks like:

  • Having control of your day-to-day finances
  • Having enough cushion to handle financial emergencies
  • Being out of debt and able to manage expenses without swiping a credit card
  • Staying on track to meet savings and retirement goals

Despite what culture says about personal finances, true financial wellness looks a lot different than that. True financial wellness is not:

  • Living paycheck to paycheck
  • Making high-risk investments in things like crypto
  • Swiping credit cards and racking up debt
  • Using earned wage access programs and payday loans

And if you’re a business or HR leader, an employee financial wellness benefit is a great way for you to show your employees the importance of financial wellness. This type of benefit is a program or platform your company provides to your employees to help them achieve wellness in their personal finances. It’s one of the pillars of your overall employee wellness plan—because financial wellness is essential to what it means to be well. And your employees are worth being well.

Here's more proof your employees need financial wellness: According to the 2022 SmartDollar Employee Benefits Study, personal finances and money are the top factors causing employees stress today. So, let’s look at your financial wellness benefit options.

Types of Financial Wellness Programs

Financial wellness programs fall into a few categories—some are great, and others . . . not so much. But a word to the wise: Do your research, because not all financial wellness providers have your team’s best interests in mind. How can you tell? Follow the money. Solicitations, predatory debt products and earned wage access programs have no place in a financial wellness benefit that’s actually meant to help your employees. Here’s a breakdown of the most common types of financial wellness programs for employees.

Bank Products

What they look like: A lot of banks offer some kind of financial wellness product—whether it’s a budgeting app, a financial literacy course or education on financial planning. And while they might provide information that helps certain individuals, they don’t do anything to shape financial behaviors.

How they make money: Bank-offered wellness products usually come as low- or no-cost programs, which can be tempting for companies looking to save money. But the reason they charge low or no fees is because they know they’ll make money on harmful loans, credit cards and other debt products they sell to your employees within the program. That’s not a recipe for lasting financial behavior change. It’s a recipe for the bank to make money off your employees.

Financial Coaching Programs

What they look like: First things first, there are good financial coaches out there, and the best financial wellness programs typically offer some form of coaching. But let’s be clear: Good financial coaches understand that financial wellness is a heart issue, not a math issue. Bad financial coaches come in and tell your people everything they’re doing wrong and don’t provide the tools, resources or encouragement to help them succeed. They’re just building their list of leads. So, as a result, their coaching doesn’t translate to real behavior change. And it’s that change that will take your team from stressed out and falling behind to winning with their money. That’s what a good financial coach does.


Click here for free, SHRM-accredited webinar content on all things HR and business leadership.

How they make money: While many coaches may offer a free or low-cost seminar and give your team free resources, individual coaching sessions can be pricey. That’s where financial coaches make their money. However, if you can find a good financial coach who offers cost-effective coaching, tools and resources within a program for your team, that’s your best-case scenario.

Pretender Wellness Programs

What they look like: These types of programs aren’t even offering financial wellness, but they pretend like they are. They even market themselves like it! But you need to understand that even if they talk a good game and are free to the employer, they’re really offering financial illness. As the wolves in sheep’s clothing that they are, they prey on your employees with purchase programs, emergency loans, credit cards and more debt.

How they make money: For programs like this, you can tell what they want to do just by looking at what they sell. If they cost your employees money, put them in debt, push credit cards on them, and leave them worse off than before, it’s pretty obvious they’re not going to help your team—plain and simple.

Earned Wage Access

What they look like: Earned wage access programs let your employees access the money they’ve worked for before their paychecks hit their accounts. They’re marketed as a “fix” for short-term cash issues, but they do nothing to fix the long-term problems that created those issues in the first place. And to make matters worse, these programs push your team toward the dangerous habit of taking pay early to buy stuff they may not need, leaving them behind on their bills and living paycheck to paycheck.

How they make money: Fees. Either by charging the employer or the employee, earned wage access programs charge fees just so employees can access their own money. Some charge a fee for each advance, some set up a loan that’s paid back on payday, and some charge fees per pay period. While offering earned wage access programs to your employees might seem like you’re giving them greater financial flexibility, you’re actually pushing them further into bad money habits. That’s not what you want or what they need.

Student Loan Repayment Programs

What they look like: The most important thing you should know about student loan repayment programs is that they exist because of America’s student loan crisis. After years of dangerous student loan debt marketing and false promises of loan forgiveness, more than 43 million people are now trapped under the weight of their school debt.1 And some of them are likely your employees. This crisis has created an opportunity for student loan repayment programs to pop up all over the place—some good, some bad. But what you need to look out for is unnecessary loan refinancing—that’s the hallmark of a bad repayment program. There are even some that push debt products on people who are fighting to get out of debt. How messed up is that?

How they make money: For the student loan repayment programs that don’t make the nice list, they make their money through loan refinancing and the debt products they sell. Again, not all student loan repayment programs are bad, but you’ve got to be cautious and do your homework.

Financial Wellness Platforms and Programs

What they look like: Financial wellness platforms and programs typically work with business and HR leaders to equip employees with access to financial tools, resources and apps. Many are subsidiaries of banks and other financial companies that have a vested interest in selling to your employees. But some, like SmartDollar, aren’t like that. We want to see employees get out of debt, get on a budget, save for the future, and retire with confidence. You should look for a financial wellness program that partners with you and truly cares about the long-term financial wellness of your employees.

How they make money: Financial wellness platforms and programs are generally free to employees, with the exception of those that are owned by banks and big financial services companies (remember the ones wanting to sell to your employees?). Employers wanting to offer a financial wellness benefit pay for their employees to have access to the financial tools, resources and apps the program or platform provides.

The ROI for Businesses

You can’t always measure return on investment in dollars alone. Obviously, dollars matter. But so does improving your employees’ quality of life, confidence in the future, productivity and stress levels. You’ve got to offer something that helps both your employees and your business. True financial wellness does that.

In fact, according to the 2021 SmartDollar Financial Wellness Benefits Study, 81% of employers who offer a financial wellness benefit to their employees said they’ve seen a positive impact as a result of offering it. And here’s a big one given the job market: 91% say offering a financial wellness benefit has made them more competitive in recruitment and hiring.

Here are the positive impacts businesses typically see when offering financial wellness:

  • Higher participation in employee-sponsored retirement savings plan
  • Higher productivity levels
  • Employees adding to their emergency savings
  • Higher participation in voluntary benefits
  • Higher employee retention rate/lower turnover
  • Employees becoming debt-free
  • Fewer days of work missed by employees
  • Reduction in 401(k) loans
  • Lower health care costs
  • Fewer workers’ comp claims
  • Less reported stress from employees

And what do employees have to say? After all, even if financial wellness does help a bunch of things that contribute to the bottom line, it’s really meant to help employees improve their financial situations first. Here’s what the 2022 SmartDollar Employee Benefits Study found:

  • Eight in 10 employees say it’s important for an employer to provide resources and tools to help with employee personal finances.
  • Seventy-six percent of employees with a financial wellness benefit use it on a monthly basis.
  • Twenty-nine percent of employees started saving for retirement thanks to their financial wellness benefit.
  • One-quarter of employees built up their emergency fund using their financial wellness benefit.
  • Employees with access to a financial wellness benefit were twice as likely to say they’re extremely satisfied with their benefits package than those who don’t have access to one.
  • Employees with a financial wellness benefit were twice as likely to say their personal finances are better off than this time last year compared to those who don’t currently have one.

Financial Wellness Is the Future of Employee Benefits

Those numbers are crystal clear. And it’s no secret that all businesses need to do everything in their power to help their employees win in all areas of life (which is a key to employee retention). The bottom line is this: Business and HR leaders have the unique opportunity to meet their employees where they’re at and give them something they actually need from their benefits package. You—yes, you—could actually change the course of your employees’ lives because of the benefit your company could offer. And that’s what financial wellness can do.

Want to explore what financial wellness can do for your company? Learn more here.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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