Financial stress has beenproven to strain job performance and work attendance, and a lot ofemployees need help saving money, even though they might not askfor it.(Photo: Shutterstock)

Over the past couple of years, Americans have gotten worse atsaving money for their future. In fact, 40 percent of peoplewouldn't be able to afford a $400 emergency cost according to theFederal Reserve.

Financial stress that results from this lack of savings has beenproven to strain job performance and workattendance, so employers are (or should be) jumping at theopportunity to improve the financial wellness of their employeesbeyond just retirement.

What's keeping employees from investing in a 401(k)? (Hint:It's paying off debt)

To improve their financial health programs, companies mustunderstand where the bulk of an employee's paycheck goes in thefirst place.

The average American household spends 90 percent of their income, andmost of that paycheck is gone before they even get the chance toput money aside for savings.

Much of these expenditures obviously go towards essential costslike housing, food, taxes, and health care. But a large chunk,sometimes bigger than expected, goes towards bills that peopledon't always think about.

For over 44 million Americans, one of those substantialexpenses is student loan debt, which currently totals $1.48trillion dollars. This especially applies to the youngergenerations of workers as 70 percent of students leave college indebt.

Mix this with somewhat stagnant wages and an ever-rising cost ofliving, and that puts retirement savings out of reach forthousands, if not millions, of people.

Credit card debt is another major concern. Despite a healthyeconomy and unemployment rate, most people owe roughly $7,000 to credit card companies,adding to $420 billion nationwide.

Not to mention, student loans often cause a snowball effect — 55percent of Americans who have student loan debt also have creditcards to pay off, usually with a balance of twice as much as thosewithout student loans to pay.

When these bills are combined with other expenses likemortgages, auto loans, childcare, and outstanding medical costs,the normal American household will have to pay $136,000 to get out of the red.

Simply put, many people can't think about saving for retirement– let alone emergencies –  because they are busy catchingup financially.

Introducing short-term savings support to benefits plans

Many employers have started stepping up to offer additionalfinancial support and programs to help employees save money. Infact, the number of companies offering financial wellness programshas increased to 83 percent, up over 20 percent from two yearsago.

Offering supplemental financial benefits like Peanut Butter canhelp employees chisel away at student loans. These types ofbenefits are also a great way for companies to reduce financialstress (and attract new talent).

Other companies, like Aetna, have started implementingincentivized money saving programs where employees get cash or workprivileges by doing fiscally responsible things like paying offcredit card debt or attending financial planning classes.

Another relatively new financial benefit for companies is tooffer a short-term-savings program or a “rainy day fund.” They aresimilar to traditional savings accounts but are usually sponsoredby employers and are not tied to a personal bank.

Cookie Jar, for instance, is an employer-sponsored savingsprogram that rounds up spare change from employees' debit cardpurchases and gives companies the option to match thosecontributions. This type of program is usually low-cost for theemployer and free to the employee. With the financial support (andguidance) of their employers, employees are able to save more,faster.

Another example is Prudential Financial, who helps employees setup “sidecar” accounts which gather a set amount of after-tax moneyfrom their paycheck. They can use this money for emergencies ratherthan tapping into retirement funds or taking out loans.

Bottom line: a lot of employees need help saving money, eventhough they might not ask for it. Providing them with useful waysto become financially healthy not only helps your company'sperformance but shows that you value the well-being of youremployees.

Roshni Chowdhry is Head of Customer Experienceat SafetyNet, a company creating financial toolsand insurance solutions to improve the financial well-being ofmillions of hardworking people.

READ MORE:

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