Despite continued minor improvement in the economy, most Americans are still worried and are increasingly focusing on improving their personal finances, according to a new report.
The survey, commissioned by Financial Finesse, a provider of workplace wellness programs, identified a significant increase in the number of employees proactively focusing on improving their finances, reporting a 166% increase in log ins by employees that have had access to Financial Finesse’s Online Financial Learning Center since 2010.
Return usage also jumped 73% from 2012 to 2013, indicating employees are approaching management of their finances as an ongoing process rather than a series of decision-making points.
Among the report’s key findings:
- As employees focus more on their finances, they are recognizing their financial shortcomings and developing a greater sense of urgency around improving their finances. Forty-two percent indicate they are concerned they will not reach future financial goals, versus 35% in 2012.
- At the same time, a lower percentage of employees report being stressed about the economy or distrustful of financial advisors. This demonstrates employees are focusing more on taking responsibility for their own finances rather than worrying about external factors they cannot control. Forty-three percent cited the stock market and U.S. economy as a source of stress, and 22% are unsure who to trust with their finances, down from 47% and 24% in 2012, respectively.
- With the increased urgency, employees overall are becoming more proactive about their financial planning and making improvements in areas that support their long-term financial security. A greater percentage of employees are taking steps to improve their financial situations on a regular basis. Forty-seven percent have taken a risk tolerance assessment versus 44% in 2012; 36% say they rebalance their investment accounts versus 31% in 2012; and 47% are maximizing all available federal tax credits and deductions, up from 44% in 2012.
Financial Finesse’s Think Tank Director, Greg Ward, says that although the firm has seen generally consistent improvement in employees’ financial behaviors over the past few years, 2013 marked a critical turning point in employees’ level of commitment to improving their finances.
Liz Davidson, CEO and founder of Financial Finesse, also points out that employees aren’t the only ones experiencing what she calls a “financial awakening.” Davidson says, “Society as a whole is beginning to put more emphasis on financial security and financial education.” She adds, “We’re seeing more and more providers of these types of services come into the marketplace, and the number of employers implementing workplace financial wellness programs is rising significantly.”
According to a 2013 AON/Hewitt study, 80% of employers said they would likely focus on the financial well-being of their employees. A similar study also conducted by AON/Hewitt just a year earlier found that only 32% of employers planned to make this a priority.
Davidson notes that inquiries from employers considering offering financial wellness programs to their employees increased 275% from 2012 to 2013. She attributes the jump to an increase in employers that recognize the benefits of employee financial wellness programs which have been proven to reduce financial stress and improve health, productivity, and pay and benefits satisfaction. She also says there is a major trend towards employers recognizing that the key to helping employees retire comfortably starts with helping them to better manage their money so they can save more for retirement.
Both Davidson and Ward believe that this is the beginning of a new era. Ward sums it up, stating that the latest research is consistently showing that “employees are adapting en masse to a new ‘free agent’ economy where they must take responsibility for their own financial security rather than relying on financial support from their employers or the government.”