Author: 2018Marketing@finfit.com

Early Wage Access Can Be Dangerous As A Stand-Alone Benefit

Early Wage Access Can Be Dangerous As A Stand‑Alone Benefit

No matter what the moniker – early wage access, earned wage access, on-demand pay, instant pay, work-today-get-paid-tomorrow – the concept is the same. Employees have control over their cash-flow by accessing the wages they’ve earned early, prior to payday.

Back in January 2020, I wrote an article discussing the pros and cons of offering an early wage access service to employees. One critical element that continues to come to the forefront of the debate is this: is early wage access a service that will lead to improved financial well-being for employees?

Here is my analysis from over a year ago:

The short answer is yes, so long as early wage access is used for its intended purpose. If used correctly the service can provide flexibility to the cash flow of the user and helps them better align incoming funds with outgoing budgeted expenses. Early wage access can not only assist in avoiding unnecessary expenses, it will provide greater financial stability to the user.

However, as human tendency indicates, we could find ourselves abusing this service as a crutch to handle bigger challenges and the eventual fall will be substantial. If employees rely on this program to live paycheck to paycheck or day to day, they will still be ill-prepared for a financial crisis. Not every day is predictable and not every expense is known. I know that from my personal experiences. Unplanned income is not a common event; however, unforeseen expenses are plentiful. If someone uses this program to merely match up daily income with daily expenses, without taking the necessary steps to establish proper savings and plan for the future, we have not provided a true financial wellness service. We have merely condensed the timeline of the stress to daily versus weekly.

If early wage access services are supported by education and credit alternatives when financial challenges arise that cannot be handled by current wages, the early wage access services will not succumb to misuse. I believe early wage access programs can be a healthy part of a robust financial wellness platform that ensure their proper use. The continued educational development of the employee and establishing healthy habits will lead to productivity in both the workplace and at home.

I stand firm on the belief that early wage access can be beneficial, so long as we support employees on their journey to financial wellness by providing appropriate knowledge, education, and resources to ensure they make positive behavioral changes that improve their financial health, with the ultimate goal of NOT having to rely on financial resources like early wage access.

A year ago, I mentioned enterprise organizations like Noodles & Company and Walmart that were offering early wage access services for their employees. Unfortunately, Walmart has come to the harsh realization that offering early wage access as a stand-alone benefit does not help employees or employers in the long run. Walmart had high hopes of increasing retention of their employees by giving them access to their earned wages early. Instead, they found that employees that used the early wage access service have been quitting faster. They hoped that offering this service would help employees budget smarter, save more and stay longer as Walmart associates. Instead, as reported by Bloomberg, “Employees who chose to only use the fast pay option without the other tools, however, left the company faster.”

If your organization is looking to help employees improve their personal financial health AND increase retention of your top employees, a holistic financial wellness benefit that provides educational resources, financial coaching, budgeting tools and access to financial solutions is the proven method to accomplish these goals.

BenefitsPRO published a recent research study conducted by our team that produced some telling data on payroll, employment tenure, financial transactions, program engagement and behavioral modification. When organizations offered a financial wellness program, we found:

  • 18.8% increase in retention across salaried and hourly employees
  • $1,855 annual turnover cost-savings per employee*
  • Nearly $2 million saved annually for every 1,000 employees

There is clear and meaningful correlation between employee engagement in their financial wellness benefit and retention.

FinFit can do the same for your organization!

Schedule Your Demo

David Kilby has been president of FinFit since it was founded in 2008. He has grown the company from a single idea into the nation’s leading Financial Wellness Benefit platform, servicing over 150,000 clients. Prior to FinFit, David led a multimillion dollar financial holding company where he was inspired to find ways to help employees improve their financial health. He is committed to helping employees succeed today, and prepare to live healthier, more productive, financially stable lives.

Get in touch with him – he’d love to talk to you about your company, your employees and how he can help.

*The per employee annual turnover cost-savings varies by industry and is based on a percentage of annual compensation, modeled at 136% for salaried and 60% for hourly positions. This analysis is based on an equally weighted average of nine research models, proposed by HiringSmart, which include: Society for Human Resource Management, Coca-Cola Retailing Research Council, Cornell University (two separate studies), Alaska State Legislative Update, Hay Group Study, Workforce Magazine – Survey on Employee Turnover, Saratoga’s HR Financial Report, and Bliss & Associates Inc.

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The Value of Financially Literate Employees

The Value of Financially Literate Employees

Financial literacy is “the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing,” according to Investopedia. This statement insinuates that an individual must not only have the knowledge, but the ability to translate that knowledge into action.

Problem One: Knowledge
65% of Americans believe schools should provide financial education, but only 21 states currently require high school students to complete a personal finance course. In a recent SHRM study, 83 percent of HR professionals reported that personal financial challenges had a large impact or some impact on overall employee performance. Only 13% of HR professionals viewed their employees as ‘very financially literate.’ Financial stress, many times due to a lack of financial literacy, is affecting millions of Americans.

Problem Two: Taking Action
Armed only with knowledge, employees will see little improvement without access to appropriate, effective and personalized tools and resources to help them facilitate positive behavioral changes that will lead to improved financial health. Even with access to tools and resources, a program that lacks motivation to participate is likely to see the majority of employees at the starting line instead of running the race.

How can you help your employees?
The first step is to provide them with the tools and resources to honestly assess their current financial situation. Once they establish a personal baseline, they can set goals and determine an actionable plan that will allow them to make progress on their journey to financial health. Knowledge and insight into their personal financial state is step one. Utilizing appropriate educational tools and financial resources to change negative behaviors into positive behaviors is the key to that personal progression.

In a previous post, we outlined how you as the employer can determine if you have a successful and effective financial wellness program. Here are five elements to focus on:

  • Assess the financial status of employees.
  • Ask employees what financial success looks like for them.
  • Offer a variety of options to accommodate different learning styles.
  • Partner with a financial wellness expert.
  • Incentivize employees to participate.

By implementing a holistic financial wellness program for your employees, your organization will see the return on investment in key areas like productivity and retention. Financially healthy employees have lower stress levels and are able to focus on the task at hand, making them more effective. Lower stress levels, in turn, have been linked to lower health care costs and absenteeism. 60% of employees say they are more committed to their employer and more productive at work when their employer demonstrates a commitment to employees’ financial wellness.

Data doesn’t lie. Our retention analysis recently published by BenefitsPRO concluded that when organizations offer FinFit’s financial wellness program they are rewarded with:

  • 18.8% increase in retention across salaried and hourly employees
  • $1,855 annual turnover cost-savings per employee*
  • Nearly $2 million saved annually for every 1,000 employees

We’d love to help your organization improve the financial health of your employees

Contact us and we’ll be happy to conduct a customized benchmarking report and retention analysis for your organization.

Contact Us

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Creating a More Equitable Financial Future for All

Creating a More Equitable Financial Future for All

Financial Literacy Month, observed each April, takes on new meaning this year as millions of Americans struggle to cope with the financial impacts of the pandemic. In 2020, 40% of American consumers had trouble paying at least one bill or expense, underscoring the importance of having a solid financial education to navigate these challenging times.

At FinFit, we are committed to creating a more equitable financial future for all. According to a recent study by the Pew Research Center, the wealth gap between America’s richest and poorest families more than doubled from 1989 to 2016. But financial stress affects all employees, regardless of income level. Although a company may compensate its employees well, the rising costs of living and tuition place a seemingly endless burden on families trying to juggle financial responsibilities. Employers can help employees navigate these stressful areas by offering financial education resources.

Employer-sponsored financial education is often the motivation your employees need to take a harder look at their finances. If they know you’re invested in their personal well-being and can trust the resources you share, it’s significantly more valuable than information they could Google (but likely won’t). 

Employees are looking for guidance to make more informed, financially sound decisions as they plan for major expenses: purchasing a home, preparing for their children’s college costs, funding their own retirement, and many other financial decisions that they face daily.

One staff member, eligible for our retirement plan, prepared to talk with the representative by logging in to FinFit and researching/learning. When she met with the financial person, she was so knowledgeable, he was really impressed and I think, a little stumped on some of her questions. It was great!

Stephanie, Human Resources Director

We believe that access to robust financial education can be a catalyst for positive change which is why the premier educational courses within Ready University are a critical component of the FinFit financial wellness program.

Like any benefit, employees must be willing to engage in order to reap the rewards. Create monthly challenges and other fun activities to incentivize employees to participate in the financial education resources. The FinFit platform includes member rewards to encourage employees to take courses and challenge themselves. Weekly trivia, points-based incentives and a member referral program encourage your employees to participate and spread the word.

We’d love to help your organization bring financial wellness to your employees

Schedule Your Demo

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Tax Time: From E-File to X Factor

Tax Time: From E-File to X Factor

As daylight lingers a little longer each day, it can only mean one thing. Spring is coming! That, and tax season is here. We’d like to take a little of the mystery (and misery?) away from the process of tax preparation by providing you with answers to some of the most frequently asked questions, options for preparing taxes (maybe there is one you haven’t considered before), and a link to a helpful checklist so when you sit down to file, you’ll have everything needed to complete the process.

FAQ

  • When is Tax Day?
    Thursday, April 15, 2021
  • How many people are expected to file electronically?
    90% (fastest way to get a refund)
  • What was the average tax refund as of June 5, 2020?
    $2,769
  • How fast are refunds issued?
    90% of refunds are issued in 21 days or less
  • What is the timetable for a refund with a paper return?
    7 weeks (file electronically!)
  • What is the average time it takes to file your own tax return?
    11 Hours (Save time. Have all of your information in front of you. This checklist can help.)
  • How many taxpayers prepared and e-file their own tax returns in 2020?
    49%
  • Why should I file my taxes early?
    One benefit: filing early can protect against tax fraud
  • What is the ‘Lookback’ rule for taxes?
    The ‘Lookback’ rule, introduced in the December 2020 stimulus bill, can benefit taxpayers who lost a job or experienced a reduction in earned income in 2020 by allowing them to use either their 2019 or 2020 earned income information to get the most out of the Earned Income Credit (EIC) and Additional Child Tax Credit (ACTC).
  • Where can I get the latest tax information including refund status?
    IRS.gov

Don’t have time to read the full article now? Here are our CliffsNotes®:

  1. Save money by filing your own taxes whenever possible – use the free resources provided by the IRS.
  2. Read up on the ‘Lookback’ rule for taxes to see if you are eligible for the Earned Income Credit and Additional Child Tax Credit.
  3. File early and file electronically!

Options for Tax Preparation and Filing

  1. Complete the paper federal and state income tax forms manually and mail. Check this IRS page for information based on your state.
  2. Use online tax software: this article provides some recommendations.
  3. Use IRS Free File
    • If your adjusted gross income (AGI) is $72K or less, Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. IRS partners are online tax preparation companies that develop and deliver this service at no cost to qualifying taxpayers.
    • If your adjusted gross income (AGI) is greater than $72K, Free File Fillable Forms are electronic federal tax forms you can fill out and file online for free. If you choose this option, you should know how to prepare your own tax return.
    • Free state returns may also be available. Some IRS Free File Program partner companies offer free state tax preparation. Read company offerings carefully.
    • If you didn’t get the full Economic Impact Payment, you may be eligible to claim the Recovery Rebate Credit using Free File. See Recovery Rebate Credit for more information.
  4. Pay a professional to prepare and file your taxes.

Tax Preparation Checklist

Whether you plan to file your own taxes or utilize a professional, you’ll need to gather the necessary information required to file. Use this H&R Block checklist to simplify the process and save you time and frustration from having to go back and locate additional information.

Don’t leave money on the table when you file. Review the Types of Deductions section on the checklist. Are you claiming all the deductions you’re eligible for?

FinFit offers a variety of financial wellness services and resources, including tools for money management and budgeting, money-saving coupons and financial solutions that can be more affordable than the high cost of credit with other institutions. You can also use FinFit’s tax withholding calculator to help determine if you need to adjust your payroll withholding. Check with your employer to see if they offer FinFit.

Employers: if you don’t currently offer FinFit, what a great benefit to support the financial well-being of your employees!

2020 Holiday Gift Giving – Mix It Up!

You’re making a list. Now check it twice. It’s time to consider what’s necessary or nice. 

This incredibly challenging year has created an overabundance of anxiety and stress. During a season known for its joy (and often stress!), we could all do with a little extra serving of peace and happiness.

A typical culprit of holiday stress relates to gift affordability. Consumers without a holiday spending stash make up for the lack of funds with credit. Last year, Americans ended up with an average of $1,325 in post-holiday debt, dragging financial stress into a fresh new year. 

One thing the pandemic has brought to light for many is the importance of emergency savings. Whether you’re building upon existing savings or you have an upcoming New Year’s Resolution, you don’t want to sabotage your savings plan with new holiday debt.

This year, reduce your holiday expenditure (and financial stress) while increasing the meaning of your gift giving. Consider gifting your talent. Whether you’re big on time and low on creativity or vice versa, there is a homemade consideration for everyone (some ideas you might not have even considered!).

  • For those with artistic or crafting talent, there are so many possibilities from needlework, drawing, painting, glueing, building, sculpting… you get the idea. Parents, consider parting with a few pieces from the collection of your young budding artists and sharing them with grandparents who may especially be missing time spent due to social distancing.
  • If you love to bake or cook, share home baked goods, mixes and recipes. Make and gift frozen meals to loved ones short on time (think college students, and the elderly). Gift a collection of family recipes to children, nieces, nephews or your grandchildren.
  • Green thumb? Share plant cuttings from your more prolific house plants.
  • Create and share themed musical playlists, or record your own musical talents. And don’t forget to share those photos – create an online photo album or video collage.
  • Send a poem you’ve penned or an individual letter along with a homemade greeting card.

Not only can a homemade gift remove extra stress on your wallet, it also replaces the stress of in-store or online shopping with the positive energy received from the creating and giving of our talents with those who are special to us. Something we all could use more of this year.

To practice any art, no matter how well or badly, is a way to make your soul grow. So do it.

Kurt Vonnegut

Skip the Holiday Debt Hangover this Year

By Sarah Senn

Operations Manager

The holiday season is quickly approaching. Holiday lights, music and shopping are just a few of the traditions that we look forward to. For many, the holidays are a time of cheer, for reflecting over the last 365 days, and for being with family and loved ones. For others, there is a looming dread of being able to afford holiday dinners and gifts. 

The average consumer spent $928.76 on Christmas gifts in 2019. 21.5% of those surveyed went into debt over Christmas, and 29.7% who went into debt hoped to pay it back with their tax returns. Many had no idea how they would get out of debt. For anyone with fair credit, they may have been charged an average credit card interest rate of 22.84% on their debt.

Only 42% of shoppers said they would be able to pay off their holiday purchases within three months; 58% said it would take them more than five months to pay off the debt. What does this mean for consumers making only the minimum payments on their credit cards? It could take more than five years to pay off the debt. A consumer paying only the minimum monthly payment of $30 on a $1,230 credit card balance would pay around $592 in interest!

Many consumers for whom access to credit cards is not a realistic option turn to payday loans. All an individual needs to obtain a payday loan is an open bank account in relatively good standing, a source of income and an ID. But at what cost? A typical payday loan carries a fee of $10 to $30 for every $100 borrowed, equating to an APR of almost 400%. These loans are typically designed to be a short-term solution paid back within 2 weeks. The CFPB found that 80% of borrowers rolled over loans within 30 days because they lacked the ability to repay the debt within the short time frame. Longer loan terms result in additional fees and interest making it very challenging for the borrower to pay the loan back. The CFPB also states that 1 in 5 payday loans goes into default.

With a little pre-planning now for this holiday season, the stress of a holiday debt hangover in 2021 can be avoided.

  1. Before lists are made and shopping begins, know what you have available to spend. This is accomplished by creating or using a budget to identify what is coming in and going out to determine what you have left over. 
  2. Look for ways to stretch those holiday dollars. Here are a few tips:
    1. Shop early! Look for sales all year long.
    2. Take advantage of free shipping. Try purchasing items on your list from the same retailer to meet free shipping minimums.
    3. Look for early Black Friday sales. Retailers looking to provide the safest shopping experience this year are starting their sales ahead of the traditional Black Friday events.
    4. Make presents. Some of those homemade gifts can be the most sentimental and thoughtful.
  3. After the holidays, look back on what you spent in 2020 (did you stay under budget?) and set up a savings account for next year’s holiday celebration. Imagine how good it will feel to know you have the money put aside to spend!

Doing your research and preparing financially ahead of the holidays can allow you to make more educated decisions and have a better plan for what is ahead so you can relax and enjoy your time with family and friends.

FinFit offers a variety of financial wellness services and resources, including tools for money management and budgeting, money-saving coupons and financial solutions that can be more affordable than the high cost of credit with other institutions. If you need a little help this holiday season, check with your employer to see if they offer FinFit.

Employers: if you don’t currently offer FinFit, what a great benefit to gift your employees this holiday season!

Compliance in the Age of COVID-19

By Bill Hall

Chief Compliance Officer

“The World Turned Upside Down” is both a wonderful song from the musical Hamilton and an apt description of the immense impact of the COVID-19 pandemic on business operations. One area of a business where the impact may not be quite so apparent, but where a failure can lead to serious consequences, is the compliance function. Disruption of the activities of your compliance team can mean a potentially dangerous diminishment of oversight, assessments, monitoring, auditing, training, and other essential risk management and risk mitigation activities.

Every business is aware that the pandemic has caused significant negative financial impacts, uncertainty, stress, transition to new remote work environments, and an overall crisis mentality that touches every employee and every aspect of daily life. What may not be so clear is the fact that these impacts to your business may result in an environment of increased non-compliant behavior along with a lessened ability to detect and correct such behavior. To make certain that your company does everything it can to maintain a robust compliance function during a tremendously challenging time, here are six key elements for your business to consider:

  1. Compliance is not optional. This is a rule we live by at FinFit, and we clearly communicate it to all of our employees. It is vitally important to ensure your team understands that compliance remains a top priority regardless of the challenging circumstances. Make sure that all employees are clear on your organization’s expectations, and that the rules have not changed even as the world seems to be completely different.
  2. Test Audit. Not only should all monitoring, testing, and auditing continue on the normal schedule to confirm adherence to policies, laws, and regulations, any operational changes as a result of the pandemic should be added to the monitoring process. Short-term or emergency adaptations are vulnerable to compliance short-cuts and need to be carefully considered. Simply put, pre-pandemic monitoring processes are likely no longer adequate in this new and unprecedented operating environment.
  3. Account for the unique circumstances of a remote work environment. Even the most professional, hardest-working employees may be overwhelmed trying to juggle work with childcare issues, closing of schools and online learning, dealing with the technology essential to remote work, and the many other adjustments that have become part of life. Make sure your company is providing guidance on telecommuting issues such as protecting confidential information, appropriate use of company systems and equipment, procedures in the case of any sort of data breach, and reminders on the use of personal email, smartphones and computers for company business.
  4. Invest in appropriate technology. You may find that your technology dollars have been wisely spent, or you may soon be facing the costs of failure to make adequate investments in IT. Businesses need to make sure that employees can access the documents, information, and data necessary to do their jobs in a secure fashion. Compliance personnel are among the employees who need to be able to continue to access information just as they would in the office in order to conduct audits, monitor ongoing operations, and conducting investigations. As home networks are typically more vulnerable, you need to make sure that all this is done in a secure, compliant environment with adequate protections in place such as firewalls and multi-factor authentication. You should also make sure both the company and all employees are alerted to phishing and other attempts to access your systems, as the sense of urgency and the lack of face-to-face time make it easier to exploit a vulnerable and anxious workforce.
  5. Pay particular attention to customer-facing employees. In this environment, you may have shifted some of your employees’ responsibilities to handle large increases in customer service needs. When employees with limited training and experience move into an unfamiliar role – especially a role that involves dealing with customer inquiries – there is an increased possibility of mistakes, incorrect information, or compliance failures. Make sure you’re providing all necessary training, and increase monitoring and tracking of your customer service personnel especially when you’ve added personnel in response to increased customer demand. Regulatory authorities are likely to focus on issues involving vulnerable customers and you should therefore make sure you can spot and correct any issues in this area immediately.
  6. Closely follow legal and regulatory developments. Compliance personnel should be tasked with alerting your organizational leaders of new requirements in a timely manner. Regulators at all levels – local, state, and federal – have issued guidance and requirements on countless issues, and compliance needs to be informed and able to communicate these developments.

COVID-19 has disrupted every aspect of your business and maintaining a robust and adaptable compliance function is essential to make sure the business manages and contains the risks arising from this disruption. Identifying and addressing the new risks in the pandemic environment will ensure your business is as financially fit as possible as we all continue to navigate business adjustments.

The Problem: Lack of Access to Affordable Credit

By Kristen Stringer

Vice President of Banking & Credit Services

Depending on your location, you cannot drive down a busy commercial street without passing one or more payday lenders or pawn shops. With 78% of American workers living paycheck to paycheck, there is no question why there is a market for so many of these high cost lenders. There is a common misconception that those living paycheck to paycheck are minimum wage or low income earners, but the fact is that over 33% of those making between $50,000-$100,000 and 25% of those making over $150,000 per year live paycheck to paycheck. Surprising?

Financial challenges affect everyone.  

With so many Americans struggling to get by, access to credit is a necessity rather than a luxury. When most people think of credit, they think of traditional products such as a mortgage loan, auto loan, or credit card. 26 million adult Americans don’t have access to credit because they lack credit reports or credit scores. What many may not realize is that according to the New York Federal Reserve, this figure more than doubles to 60 million Americans when you take past credit history into consideration. That’s 60 million Americans who are unable to qualify for any credit cards or other traditional loans. 67% of consumers applied for a credit card during the calendar year; one in three were denied credit or offered less than they requested.

Lack of access to credit, let alone affordable credit, is making it nearly impossible for individuals to handle their financial challenges.

But the challenges do not stop for those who do have access to some form of credit. According to a recent survey by WalletHub, 33% – more than 86 million Americans – fear they will max out their credit card with a purchase of more than $100. A WalletHub analyst concluded that these Americans are over-utilizing credit which they will not be able to pay off in a timely fashion, resulting in paying more interest and damaging their credit score in the long run. According to Experian, having credit card utilization above 30% will lower your credit score even if you are making on-time payments.  This results in a vicious cycle of debt as consumers are forced to utilize credit cards to make ends meet or handle financial emergencies. They hurt their credit score and rack up excess interest charges, making it difficult or more expensive for them to access credit in the future when they have a need.

As of February 2020, the average outstanding credit card debt for Americans was approximately $6,900 with the average interest rate on purchases (cash advance charges are much higher) of 16.61%. If a consumer made only the minimum payment each month, it would take 17 years to pay off the debt and cost over $7,200 in interest charges. That equates to a total repayment of over $13,000 to pay off the original $6,200 balance. Sounds unreasonably expensive, and it is.

Now let’s consider those consumers without access to traditional credit cards with the average interest rate of 16%. Higher-cost loans and credit cards are often the only option available to handle a financial emergency. The most common loans available to this populous are payday or title loans. These loans are easier to qualify for but carry much higher interest rates and fees, and the typical pay-back period is much shorter than traditional credit products. Rates and fees are determined by individual state regulations, and according to the Consumer Financial Protection Bureau (CFPB) a typical payday loan term is two weeks with a fee of $10-$30 per every $100 borrowed. The calculation on a loan with a fee of $15 per $100 results in an APR of over 400%. 

An APR of over 400% makes the average 16% APR seem very affordable, and at 16% the interest paid was higher than the debt ($7,200 interest charged on a $6,200 balance). Think about that.  

Roughly 12 million Americans have to resort to a payday lending service each year with the average income of the borrower being $30,000. 58% of those utilizing these high-cost lenders already have a difficult time paying for their basic necessities (like rent and utility bills). This leads to individuals being unable to pay back the payday loan in the initial 2-week time frame, and many states allow them to “rollover” the outstanding balance for a new fee and extend the repayment term. Like making only the minimum payment on a credit card, these “rollovers” result in even higher interest or fee charges, contributing to the dangerous cycle of debt. 75% of individuals who utilize payday loans take out 11 or more loans in a year, usually within two weeks of repaying a previous loan. The original $200 loan can quickly result in more than $1,000 paid back.

While these figures seem astonishing and you may wonder how this practice is still legal, the unfortunate truth is that for millions of Americans this is their only lifeline when a financial challenge arises. Your employees deserve a better option. They deserve financial solutions that help them improve their financial situation, not drive them further into the cycle of debt. They deserve educational resources and tools that helps them develop an appropriate plan to not only manage their current finances but set them up for future success. This is where FinFit can help. Our financial wellness program offers access to resources and budgeting tools, financial coaches, and credit and banking solutions through FDIC-regulated banks that is typically more affordable than high-cost credit providers.

We’d love to help your employees and your organization thrive.

Saving Money Without a Plan is Daunting

Everyone knows that saving money should be a priority. Sounds easy enough, right?

The reality for many Americans who don’t have $400 saved to cover an emergency expense: it’s harder to do in practice. Saving money falls into the same conceptual buckets as eating healthy and exercising. They are simple concepts, but if you don’t have the knowledge, tools and resources, getting started can not only be daunting, it can be paralyzing.

Imagine you have never exercised a day in your life and you finally decide that today is the day. You set a goal to lose 20 pounds. Where do you start? Do you join a gym? Do you buy equipment to work out at home? Do you focus on cardio? How about weights? How long do you exercise for? How many days a week? The questions build until your goal seems unattainable. Not because of the goal, but because the path to get started is unclear and overwhelming.

Now apply this theory to finances and saving money. Individuals that have bills to pay and mouths to feed are focused on their daily needs; it’s not that they don’t want to save, but they have to deal with the NOW. Until they take care of their current needs, it is unlikely that these workers will be able to focus on saving money or building an emergency fund to fall back on when an unplanned expense arises. They are living paycheck to paycheck like 78% of America. They feel like they don’t have a dime to spare. They want to save and just don’t know where to start. They need a plan.

The key to savings success is to start small. If your employees can get in the mindset of putting a small amount of money away, they will be able to increase the amount over time. Behavioral change for their bank accounts. It might sound impossible for many of your employees if their goal were to save $1,378 in a year’s time. That’s a big number. But what if they had to put just $1 into savings this week. Next week, put in $2. The following week, $3. See the pattern? Save one dollar more than the previous week. It’s called “Stack Saving.” By the end of a full year, they would have $1,378 in savings just by taking incremental steps each week. And it all starts with a realistic, attainable plan.

Of course, Stack Saving is just one of many examples of a savings behavioral change. There are numerous strategies that can be leveraged to help employees start to save more money. The most effective programs are those that are automated and do not require the employee to take repeated, manual actions. The best employee savings initiatives incorporate practices like round-up and rewards options that automatically deposit money right into the employee’s account to accelerate their savings.

As an employer, you’re already helping your employees save if you offer a retirement plan, provide group health insurance, contribute to their health insurance premiums, offer an FSA, HSA, or HRA, or contribute to student loan payments. Any support you can provide for your employees, especially now, is invaluable to them and will in turn help you keep your best employees. The key to helping them achieve ultimate financial success is to offer a holistic suite of financial wellness services that supports the four key pillars of financial wellness: Spend, Save, Borrow and Plan. Saving is one element.

These four pillars defined by the Financial Health Network support holistic financial well-being, and it’s critical to select a financial wellness program that supports your employees in all four areas. Offering benefits or single-point solutions that focus only on one of the pillars can add value, but they aren’t effective at driving real behavioral change. Give your employees the tools and resources to establish their personalized financial roadmap and set them up for future success.

FinFit taps KBW for equity raise, CEO says

FinFit, a Virginia Beach, Virginia-based financial wellness platform for employers, is working with Keefe, Bruyette & Woods on a capital raise, said CEO David Kilby.

FinFit is likely to raise USD 15m to USD 20m in equity to accelerate sales and marketing and add features, Kilby said. Founded in 2008, the company has raised about USD 50m in equity…

Read the full article here on Mergermarket.

© Copyright 2021. All Rights Reserved.

FinFit Loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC. Loans subject to credit approval. Residents of Colorado, Connecticut, Iowa, Vermont, West Virginia, Nevada and Massachusetts are not eligible for loans. Nothing in this advertisement constitutes an offer or solicitation for loan products to residents of those states. Actual time it takes for loan approval dependent upon loan verification set up with your employer.

Wage Now is fully funded and managed by an affiliate of FinFit. If any fees apply, those fees will be disclosed prior to entering into any agreements.
Residents of California, New York, North Dakota, South Dakota, Tennessee and Vermont are not eligible for WageNow. This does not constitute an offer or solicitation for WageNow to residents of those states.

FinFit’s Financial Wellness Program, which includes educational content, a financial assessment and a financial dashboard, are free to registered members.
Services offered may incur fees and/or interest. All fees will be disclosed prior to entering into any agreements.
Products listed are a representation of FinFit offerings. Actual availability may vary. The products available to you and your organization will appear on your FinFit membership dashboard. Actual loan amounts and rates offered vary based on lender, credit worthiness and other factors.

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