Giving Thanks For Financial Flexibility

Thanksgiving—a special day when we stop and consider our blessings. Yet, alongside the festive feeling, social gatherings, traditions, and happy moments, financial worries can put a damper on the traditional Thanksgiving spirit and enthusiasm, making it difficult for people to feel truly thankful.

For the millions of Americans living paycheck to paycheck and with little financial flexibility, holidays like Thanksgiving are often another cause of stress. They wonder how they’ll be able to afford the extra food, travel, and time off work.

In this article, we’ll explore the concept of financial flexibility from all angles, and why it’s critical for today’s workforce. Plus we’ll share some tips for employers on helping their workers advance toward greater financial flexibility.

Defining Financial Flexibility

The term “financial flexibility” will mean different things to different people, but it generally comprises two key elements:

1. Flexibility to Make Choices

People with financial flexibility have the freedom to make choices that allow them to enjoy life, whatever that means to them. Whether that’s taking family vacations, going out to eat a few times a month, or working fewer hours so they can spend more time with family, they have the financial flexibility to spend time doing what they value and what makes them happy.

In addition, people with financial flexibility are in a position to take advantage of unique opportunities in their lives, such as buying a house, starting a family, or changing careers.

2. Ability to Accommodate Unexpected Expenses

Life is full of surprises. When someone enjoys financial flexibility, they can accommodate short-term or unexpected monetary needs (like vehicle repairs, losing a job, or an illness) without experiencing undue financial strain or having to resort to high-interest loans or credit cards.

Financial Flexibility vs. Financial Stability: What’s the Difference?

While financial flexibility is the ability to adapt to changing conditions or unexpected challenges, financial stability is about maintaining a steady financial situation over time. Someone with financial stability is generally able to:

• Pay all their bills on time
• Build savings
• Avoid high-interest debt
• Handle unexpected expenses without disrupting their long-term financial goals

How a Lack of Financial Flexibility Affects Employee Well-Being

A lack of financial flexibility can lead to stress, anxiety, and other unwelcome side effects. According to a recent PwC survey, 60% of full-time employees feel stressed about their finances, with a significant proportion reporting flow-on effects in other areas of their wellbeing, including sleep quality, self-esteem, and relationships.

Financial stress can also lead to depression and absenteeism among employees, which affects their productivity and performance. For example:

• Workers may struggle to focus on tasks while worrying about money.
• As a result of financial stress, workplace relationships may suffer, leading to conflicts and decreased morale within the team.

Strategies for Enhancing Financial Flexibility in the Workplace

Here’s how you can help your employees build financial flexibility:

Fair Compensation

Be sure you offer wages that align with industry standards and the cost of living.

Retirement and Savings plans

Offer employer-sponsored retirement plans to help employees build a financial foundation for the future. These plans let employees contribute pretax dollars that grow tax-deferred until retirement. They’ll go a long way to addressing the financial stress workers experience around securing a comfortable retirement.

Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs)

HSAs and FSAs are tax-advantaged financial wellness benefits tools designed to help workers save money on medical expenses. These accounts are great vehicles to empower employees to put aside money for medical emergencies and routine health expenses.

Financial Education and Wellness Programs

Create financial awareness among employees through online tools, workshops, webinars, and seminars that educate them on managing their income and reducing financial burdens. These resources should cover topics such as:

• Budgeting
• Expense tracking
• Debt management
• Emergency funds
• Cash flow management
• Savings strategies
• Income diversification
• Investment options
• Understanding credit scores
• Using credit wisely

Financial Wellness Counseling

Consider partnering with financial wellness platforms that offer free wellness check-ups with a certified financial professional for employees to review their financial situation and challenges.

Flexible Work Arrangements

Introduce flexible work options or adjusted schedules, not just during the holiday season but all year round. This flexibility can help employees save on childcare costs and provide them with more time for family and hobbies.

Discounts and Perks

Negotiate discounts with businesses in your area or offer perks such as discounted gym memberships, retail vouchers, or access to group-buying programs. These benefits can help workers save money on their daily expenses.

Emergency Savings Programs

Consider initiatives that encourage workers to build a financial safety net, such as matching contributions to a savings account. These programs will provide short-term financial assistance to employees facing sudden and unforeseen hardships.

Encourage Time Off

If possible, encourage your workers to take time off over the Thanksgiving holidays without worrying about losing income. It will likely reduce their stress levels and contribute to their overall wellbeing.

Holiday Bonuses or Gift Cards

Offer Thanksgiving holiday bonuses or gift cards to show gratitude to your employees for their hard work and help them with their holiday expenses.

Open Communication

It’s vital to build an open and supportive communication culture. Let your workers know they can discuss financial concerns with their manager or HR team without judgment. Doing so will create a more empathetic workplace environment.

Flexible Payment Options

Consider offering flexible payment options for certain expenses, such as allowing workers to spread out the cost of health insurance premiums and other benefits over the year rather than deducting larger amounts over the holiday season.

Earned Wage Access

The timing of your payroll can directly impact your employees’ ability to pay bills or unexpected expenses on time. Thanks to advances in financial technology, you can give your employees instant access to the money they earn instead of waiting to be paid during the next bi-weekly or monthly pay cycle. This groundbreaking payroll model, known as Earned Wage Access (EWA)¹, has become a highly sought-after financial wellness benefit.

EWA allows employers to give their people more control over their financial liquidity, therefore improving their financial flexibility. Workers are empowered to make saving and spending decisions that best suit themselves and their families. And having access to their wages on-demand helps them avoid payday loans or overdraft fees.

Final Thoughts on Financial Flexibility in the Workforce

Thanksgiving presents a unique opportunity for employers to reinvigorate their efforts to help their workers build lifelong financial flexibility. Help your employees embrace sound financial habits so they can transform their approach to money management and advance towards sustained financial resilience.

May this Thanksgiving be a stepping stone towards a more financially flexible future for your workforce!

Partner with Payactiv to Build Your Workers’ Financial Flexibility

Payactiv is a leading financial wellness benefit that provides EWA to over a million workers every month. The Payactiv membership model comes at no cost to employers and a minimal cost to workers.

Employees’ wages can be loaded onto a debit or prepaid card, transferred to their bank accounts, or even picked up as cash at Walmart. Employees can also utilize the Payactiv bill pay service and automatic saving² features and access financial counseling and other resources to help reduce their financial stress.

Contact Payactiv and start supporting your employees to financial wellness today.

¹Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.

² Goal-based saving is a set-aside account, and you will not receive interest or other earnings on the funds within the goal-based account.

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