Simple ways for small businesses to provide financial wellness programs for their employees

Owning a small business can be an incredibly rewarding experience, creating a sense of independence and accomplishment. Business owners get to decide how to operate, who to hire, and what kind of culture to establish, and how, as a small business owner, you can take care of your employees and set them up for both work and personal success.

Offering a financial wellness program is one way to give employees valuable skills and knowledge to help them manage their finances more effectively.

These programs do not have to be expensive. In fact, many of the best tools are free. Worrying about finances can mean your employees aren’t able to bring their best selves to work.  Employees also genuinely value these resources, and they can be a great way to build loyalty, team spirit, and a sense of common purpose. Here are some of the most popular topics a small business’s financial wellness program could include.

Building basic financial literacy

When considering financial literacy, what you don’t know can cost you. In fact, one survey from the National Financial Educators Council found that 38% of people lost at least $500 in 2022 because they did not understand basic financial concepts.1

When building your company’s financial wellness program, thinking about ways you can help your employees build or expand their understanding of basic financial literacy will provide a solid foundation for a rewarding and helpful campaign.

Think about the tools and resources you can offer them to bring them up to speed on budgeting, spending and saving, taxes, retirement planning, and insurance. Even basic knowledge can be incredibly powerful, especially for people who have never encountered these topics formally before.

Many of these tools are free or low cost. For instance, the Consumer Financial Protection Bureau maintains an extensive library of educational materials, worksheets, and tools to help evaluate everything from auto loans and credit cards to home mortgages. The FDIC's Money Smart online program guides people through a series of interactive games and learning modules teaching basic financial education.

You can also look to bring in outside  professionals to help. Do the providers you use as a business offer any free or recorded workshops? Do they provide their customers with any resources you can leverage? Do you have or know a financial professional who would be willing to give some of their time to lead a session with your team?

With the goal of building and expending your team’s overall financial literacy, here are some topics you may want to consider for your financial wellness program:

Budgeting assistance

Even the hardest workers can run into trouble if they spend more than they make. Creating a realistic budget to monitor income and expenses can be a first step toward a sound financial plan. Many people find the simple act of paying attention to how and when they spend money can help them stay on track.

You can help your employees with budgeting by drawing awareness to free tools for finance management. Basic versions of apps like Microsoft 360, Mint, GoodBudget, and Personal Capital, to name a few, can be downloaded at no cost.

Debt management and reduction

Stress and distractions can mount when individuals take on too much debt, whether through credit cards, personal loans, mortgages, or student loans.

Offering information about Good vs. Bad debt, how to avoid going into bad debt, debt relief, consolidation, and lower-interest alternatives can help your employees better manage their situations.

Not all debt is bad – help your employees understand when borrowing can be good for their overall financial health, and when and how it can become a problem.

You can steer employees who need one-on-one coaching to credit counseling organizations like the National Foundation for Credit Counseling or the Financial Counseling Association of America. You can also help your employees monitor and improve their credit ratings by providing information about how to obtain an annual free credit report.

Creating a surprise fund

Unexpected expenses occur all of the time, and they can increase your employees’ stress. A recent Federal Reserve report found that 32% of Americans couldn’t cover a $400 surprise bill out of savings.2

You can help by giving your employees guiding resources on how to build an emergency or surprise fund. Financial calculators can determine how much they will need to save to accumulate an adequate cushion. A thorough research can help them identify the right place to keep their surprise fund. Offering these simple tools can go a long way toward ensuring peace of mind for your employees.

Many payroll services will also allow you to direct parts of your employees paychecks directly into a savings account or vehicle – coaching your employees on good savings habits, and then enabling them to do so easily with their regular paychecks can be an incredibly helpful way for you to get them on the right track with their savings strategies beyond just sharing information.

Financial strategies and retirement

Effective financial strategies can help your employees increase their financial security, but many believe that financial guidance is just for the ultra wealthy, and not them. Whether providing tools and educational resources or even partially covering the expenses of a financial professional, investment guidance is another way to support your employees’ financial wellness.

Giving your employees guidance to plan and save for retirement can provide them with added assurance when facing retirement. Your employees may already have access to a wide array of calculators, worksheets, and educational materials through your provider’s online portal.

Many companies administering 401(k) plans also offer investment seminars and one-on-one investment counseling to employees as a free or low-cost add on to their services. In addition, there are a number of free online resources you can recommend to your employees.  

Home buying and mortgages

Buying a home is a dream for many individuals, and it’s likely an ambition for some of your employees, too. As an employer, you can take a number of steps to help them better understand what it takes to buy a home. Consider providing them with resources to learn how much they need financially to achieve their goal or connecting them with a mortgage broker referral program. You can also connect them with resources to help determine if buying a home is the right decision for them at that time financially.

You can also make sure your employees know about the many free online resources available to home buyers. For instance, Freddie Mac has created a step-by-step interactive guide to help people determine how much house they can afford, what kind of down payment to make, how to apply for a loan, how appraisals work, and what to expect in the closing process. Fannie Mae offers Home View, which is a seven-module education program for home buyers. Local banks can also be a resource, frequently hosting seminars and informational sessions about the home buying process.

Some employers go a step further by providing access to mortgage brokers who can help employees navigate the financing process of their home purchase. This is often a free service to both the employer and the employee since most mortgage brokers are compensated by lenders only when a loan is completed. Local real estate agents can often recommend reputable mortgage brokers in your area.

Planning for children’s education

College costs are rising fast. In 2023, tuition, room and board at a private four-year institution average over $46,000, even public, in-state costs top $21,000 on average according to the Education Data Initiative.3 As a result, some of your employees may be worried about how to cover these costs without taking on debt.

Help by sharing basic information and tools like the budgeting and planning calculators offered by Sallie Mae and Saving for College. You can also connect your employees with resources around solutions for the expense of college, and information about the college savings plans available to them in your state.

Taking care of employees is good for business

Employees are the strongest asset to small business owners. You will want them fully focused on their work rather than worrying about their relationship with their money. Providing resources that can help them improve their financial wellness can go a long way toward creating a positive work environment and building loyalty. These programs can be a relatively easy, scalable way to show your employees you support them both at work and at home.

You don’t have to spend thousands of dollars on platforms or matching contributions. Even making the time and space for learning sessions or sharing resources can help your employees along their financial journey.

1“Lack of financial literacy cost 15% of adults at least $10,000 in 2022. Here’s how the rest fared,” CNBC, January 19, 2023. https://www.cnbc.com/2023/01/19/heres-how-much-people-say-lack-of-financial-literacy-cost-in-2022.html

2Economic Well-Being of U.S. Households, Board of Governors of the Federal Reserve System, 2022. (SHED)https://www.federalreserve.gov/publications/2022-economic-well-being-of-us-households-in-2021-dealing-with-unexpected-expenses.htm

3Average Cost of College & Tuition, Education Data Initiative, 2022. https://educationdata.org/average-cost-of-college#:~:text=The%20average%20cost%20of%20tuition,or%2062.4%25%20of%20college%20costs

This article is provided for general informational purposes only. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.? 

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Disclosure

Donald Marks is an agent licensed to sell insurance through New York Life Insurance Company and may be licensed with various other independent unaffiliated insurance companies in the states of CA (CA Insurance License #0L45686), CT, FL, IL, MT, NC, NH, NY, SC, and TX. No insurance business may be conducted outside the states referenced.

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