Employers can take the time and effort to identify when money concerns affect their employees, so that they can offer resources to help.
Signs of Financial Distress
Even though employees seldomly disclose when they are in financial distress, below are signs that could indicate that an employee could use assistance:
- Requesting an advance on a paycheck
- Being mentally distracted during work
- Spending more time on phone calls
- Showing up late or other attendance issues
- Avoiding social occasions with co-workers, such as going out to lunch
- Choosing not to participate in a retirement plan
Four Elements of Financial Well-Being
Financial well-being comes when people feel secure about their money and that they have the freedom to spend their money how they’d like. Individuals should review their financial well-being from four different perspectives:
1. Feeling In Control of Daily and Monthly Finances
A key aspect to feeling financially secure having enough financial resources to meet your day-to-day and month-to-month expenses. The focus here is on meeting your present expenses. This keeps you in control of your expenses, rather than expenses being in control of you.
2. Capacity To Absorb a Financial Shock
Life is full of unforeseen circumstances and part of your financial well-being is having enough financial resources to absorb the costs of such circumstances.
With this element the focus of financial well-being shifts from being able to control your present expenses to focusing on the future and emphasizes the ability to cover emergencies.
Emergencies pose great threat to a person’s financial stability and therefore needs to be adequately planned for.
3. On Track to Meet Financial Goals
Another important aspect of financial well-being is to be on track to meet your financial goals. Achieving financial wellness means you do not derail from the goals and targets that you set for yourself.
Once you have achieved your short-term goals, like establishing a budget or creating an emergency fund, you should start working toward mid-term financial goals such as, paying off student loans. Lastly you want to concentrate on achieving long-term financial goals such as striving for homeownership or increasing your retirement savings.
You probably won’t make perfect, linear progress toward achieving any of your goals, but the important thing is not to be perfect but to be consistent.
4. Financial Freedom to Make Choices to Enjoy Life
The final aspect of financial well-being is having the freedom to make choices regarding the use of your financial resources to enjoy life. Amanda of Dream beyond Debt, captured this fact by defining financial security as “the ability to spend money on what I want, and not on what’s available or what I can get the lowest price because that’s all I can afford”.
Financial Freedom is about living within your means, being a bit frugal, and making sure that money is spent on things you really need like food, shelter, and even vacations (relaxation is important too).