Forget Financial Wellness Programs. Here’s How to Better Help Your Employees

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

You may be inclined to invest in a financial wellness program for your employees. Read on for a better use of your financial resources. [[{“value”:”

Owning a small business can be a challenge when it comes to doing right by your employees. Small businesses, by nature, tend to have limited financial resources. And so you may not be able to offer the same set of benefits as a much larger operation.

Now, one of the perks you may be interested in offering your team is a financial wellness program. These programs commonly teach workers how to invest and manage their money to meet different goals.

A good 40% of employers offer financial wellness programs to their employees, according to data from Bank of America. But before you commit to offering one, you may want to consider using your limited resources elsewhere.

Put your money where it really counts

Financial wellness programs tend to be well-intentioned. But if you know for a fact that a good number of your employees are struggling financially or don’t have much money to their names, then a financial wellness program may, frankly, end up being nothing more than a waste.

If the bulk of your employees have just a few hundred dollars in savings, or no savings at all, then learning how to invest won’t be particularly helpful for them. You can’t invest money you don’t have. That’s why a better bet may be to use your resources to first help your employees build cash reserves.

The SECURE 2.0 Act allows workers to establish emergency savings accounts for their employees and set a limit of up to $2,500 for contributions annually. Those contributions can be partially or fully funded by employers.

So let’s say that rather than spend thousands of dollars on a financial wellness program for your team of 30 employees, you instead give each employee $500 to kickstart their emergency savings. That alone could be a game changer. It could give your employees more peace of mind and help them avoid resorting to debt the moment an unplanned bill springs up.

Another good way to spend your company money? A retirement plan match. And that retirement plan doesn’t have to be a 401(k). Those can be costly for small businesses. Instead, you may want to look at alternatives like a SEP IRA, which may come with lower fees to administer.

Don’t waste money on a program that won’t have an impact

If you pay your employees a generous wage and are of the impression that they can largely benefit from a financial wellness program, then by all means, introduce one. But if most of your employees are earning a modest or lower wage, and you’re pretty convinced that most aren’t sitting on thousands of dollars just waiting to be invested, then forgo the wellness program and instead hand over the cash. It’ll likely do a lot more good for your workers on a whole.

Remember, the less stressed your employees are about money, the more productive they might be on the job. That’s reason enough to do what you can to make a positive financial impact on their lives.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Bank of America is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has positions in Bank of America. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.

“}]] Read More