Credit card debt continues to haunt many employees today and it's not expected to get better anytime soon. The Consumer Financial Protection Bureau estimates that credit card debt could even hit $1 trillion. Credit card interest rates often vary between 20.94% - 27.92%. To put this in perspective, if employees are carrying a $10,000 unpaid balance on their credit card that has a 27.92% interest rate, they are in essence really carrying a balance of $10,000 X 27.92% = $12,792. And employees are paying $232.04 in interest alone each month just to cover their interest payment. If an employee takes 30 years to pay off that original $10,000 balance, the employee will ultimately pay $73,781.24 (with only 12% of the employee's payments even chipping away at their balance and the remaining 88% devoted to interest).
It's no secret that employees' financial stress spills over into the workplace decreasing work productivity. What can wise administrators do to help their employees? Create an environment that addresses employee financial stress and encourages employee financial wellness. Build a culture of celebrating employees working toward their financial goals, enhancing employee financial freedom by encouraging wise use of budgets to give each dollar from paychecks a specific purpose before spending. Consider putting an employee emergency savings plan in place to financially incentivize employees to prepare for rainy days. Make use of your company's selected retirement advisor and have them meet individually with your employees to encourage greater saving practices. Want more ideas? We are here to help you help your employees decrease financial stress and increase financial wellness (which in turn helps you have a more productive workforce).
We've got your back,
Your Financially Fit Employees Team
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