Kern Business Journal
A financial planning client, who I will call Michael, works for a mid-size Bakersfield company. He is in his 50s. He and his wife have been slow starters when it comes to saving for retirement. They both also are compulsive spenders.
Michael is viewed as one of the top managers at his company. He seems organized and disciplined. His boss and co-workers consider him to be a together type of guy.
What his boss does not know is that Michael and his wife have maxed out their credit cards. Those big vacations he and his family have been taking are being paid for in installments over time. Keeping appearances up is becoming a strain.
This financial strain is taking its toll on Michael’s health and work performance. He is calling in sick more often. When he is at work, he often is distracted by calls from bill collectors.
Michael sought my help in setting up retirement savings accounts for him and his wife. During a session last fall, he confided that he feels overwhelmed and fears his boss may realize his performance has slipped.
Clearly Michael needed more than investment advice. He needed counseling.
“Does your employer have a financial wellness program,” I asked.
If such a program existed, Michael had not heard about it. And even if it did exist, he was not sure he would use it. He did not want his boss to find out about his problems.
My advice: “Ask your company’s human resources specialist about a financial wellness program. If one exists, use it.”
Not all companies offer employees financial wellness programs. But for purely bottom line reasons – if not out of concern for workers’ well-being – these programs pay off.
According to a recent study by the Consumer Financial Protection Bureau, for every dollar a company spends on a financial wellness program, it sees a $3 return from reduced absenteeism and workers’ compensation costs, and increased staff productivity.
A financial wellness program is not investment advice. Rather it is a financial education program focused on helping employees change financial behaviors and create sound financial plans.
Some key components of an effective financial wellness program include:
- Communication. Companies should publicize the existence and details about their financial wellness programs. Workers should take advantage of all of the services.
- Confidentiality. My client Michael did not want his boss to know about his financial problems. Workers must be assured of confidentiality. Individual financial wellness sessions often are held away from the work site.
- Customized sessions. While group sessions are useful to cover broad topics, each worker’s circumstance is different. Customized, individual counseling sessions given by certified financial planners should be part of the program.
- Multiple sessions. Financial wellness is not an “event.” It is a process. Counseling likely will take several sessions.
- Retirement planning. The focus of a financial wellness program should be short-term (dealing with immediate debt) and long-term (saving for the future.) An aging worker who is trapped in a job because he cannot afford to retire can become a liability if it affects his job performance.
As it turned out, Michael’s company had recently contracted with a local certified financial planner to set up a financial wellness program. Assured of its confidentiality, Michael and his wife are now receiving help in evaluating their expenses, setting up a budget and reducing their debt. I continue to advise Michael on how to invest his savings. Slowly but surely, we are seeing his budgeting efforts pay off in him having more discretionary funds to invest.