7 Million Americans Needed Financial Wellness Education
Based on a recent Washington Post article1, 7 million Americans are delinquent by 90 days or more on auto loan payments. The findings indicate most of those delinquent have lower credit scores and are under the age of 30.
Remember your post-college days? You were still driving the same tired car that saw you faithfully through your after-class pizza delivery job. It started to show its age with frequent trips to the shop for minor tweaks and major repairs. Time to consider a new vehicle.
Consider two post-grads in that very situation.
No access to a financial wellness program
With no cash on hand to make the purchase, Conor immediately opts for an auto loan. After all, he is bringing home a steady paycheck. At the local dealership, Conor is beckoned by the gleam of his dream car. A sales associate is all too happy to find a way to make Connor’s dream a reality. Connor leaves the dealership with his new ride, in addition to a higher-interest loan for the maximum amount Connor was approved for. He’s thrilled. Until the first payment is due when Connor discovers that between rent, student loan payments and other monthly expenses, he is strapped and soon struggling to make all of his monthly payments. He feels duped, but unfortunately didn’t have the financial knowledge to make a smarter financial decision.
Conor drives to work, stressing daily about how he’ll make ends meet.
Financial wellness program enthusiast
Connor’s college roommate, Aaron, works for a company that offers and encourages employees to use their financial wellness benefit. Aaron knew he could find information that would help him figure out how to afford a car. He utilized the educational resources offered through his financial wellness benefit to learn about finance options, interest rates and how to compile his expenses into a budgeting tool. He quickly realized he had not considered the total impact his expenses would have. Aaron used a financial calculator specifically to calculate the amount of vehicle he could afford based on interest rates, down payment and how much he was able to comfortably spend on a monthly payment. Good thing he checked; he had grossly overestimated his car allowance. He decides to wait until later in life to purchase his dream car; he knows it’s a smarter decision to put a small amount of money in savings because he wants to be prepared for unexpected repairs and routine maintenance. He feels accomplished and responsible in his financial decision.
Aaron drives to work, ready to take on the day.
All it takes is one poor financial decision to turn a high performing employee into a distracted, stressed, low performer. If your organization offers a financial wellness benefit, continue the conversation throughout the year by sharing examples of real-world applications to engage every employee. And if you don’t offer financial wellness, check out FinFit’s holistic financial wellness solution. We have all of the financial tools and resources to support financial wellness in your organization. Contact us to learn more.
1 The Washington Post - A record 7 million Americans are 3 months behind on their car payments, a red flag for the economy