getty
Managing finances can be a challenge, especially when you are trying to stretch a paycheck until the next one comes. This is why some business leaders have taken it upon themselves to provide their employees with tips and strategies to make their paychecks last longer. These leaders recognize the importance of financial wellness and how it can impact their employees' overall well-being and job performance.
If you'd like to help your team make the most of their paycheck, read on for 20 expert tips from members of the Forbes Human Resources Council.
1. Help Employees Set Aside Savings
"Pay yourself first" is one of the golden rules of CFAs and CFPs. Encourage employees to set aside savings (an emergency account, retirement savings or even a "fun money" savings account) before making unbudgeted purchases. If feasible, encourage them to set up autopay for as many of their recurring fixed expenses to stay on top of payment deadlines and debt repayment. - Alexandria Brown, The HR Hacker
2. Take An Active Interest In Employees' Financial Health
One way business leaders can help employees is to help build financial literacy skills. Financial literacy training helps improve financial decision-making skills while improving the employee's financial well-being. Taking an active interest in employees' financial well-being helps drive engagement and trust in the leadership of the organization. - Loren Rosario-Maldonado, Cultura, Inc.
3. Encourage Budgeting
Encourage creating a budget and sticking to it. By identifying essential expenses, such as rent or mortgage payments and groceries, and finding ways to reduce non-essential spending, such as dining out or shopping for non-essential items, paychecks can go much further. Additionally, leaders can offer resources and support, such as financial education or access to planning tools. - Neha Mirchandani, BrightPlan
4. Provide Guidance On FSAs And Retirement Accounts
Conducting financial literacy training and one-on-one meetings to discuss financial goals is a great first step. The leader can encourage a culture of open communication and provide guidance as needed, like explaining how a flexible spending account—FSA, monthly 401(k) retirement or IRA contributions, will reduce your taxable income. This can help employees find a few extra dollars in their paychecks. - Cally Stanphill, PainTEQ LLC
Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?
5. Invest Beyond The Paycheck
Make sure you are paying your employees competitively for the value they bring to your company. This includes thinking about the different ways to invest beyond the paycheck. For example, providing a commuter allowance, giving internet and phone allowance, educating on tax-saving incentives like HSA, FSA or 401(k) programs and even hiring a CPA or financial advisor. - Jessica Wallen, Marten Law
6. Offer Early Wage Access
Provide financial wellness education that includes topics like budgeting to help employees manage their situation proactively. Alternatively, some businesses are rolling out a new benefit called Early Wage Access (EWA). So, if an employee isn’t paid until Friday but they have an immediate need, they can access some of those funds early. - Lisa Shuster, iHire
7. Start With One Habit
Costs have risen dramatically, affecting many. Encourage employees to focus on one major expense or spending habit that they can control now. Comprehensive budgets are great but can be overwhelming for real people who are juggling a myriad of responsibilities. Looking at a monthly bank or credit card statement will quickly reveal expensive habits. - Jennie Walker, Luminary Global - Consulting, Executive Education & Coaching
8. Host A 'Lunch And Learn'
Outsource a financial advisor to host "lunch and learn" events for your employees. Oftentimes, your company-sponsored 401(k) provider will host these sessions, onsite or virtually, at no cost to the business. - Veronica Oubayan, CarepathRx
9. Pay Employees Their Value
A truly savvy business leader would ensure his employees are paid enough that they don't need to “stretch” their paychecks. In most corporate environments, leadership makes significantly more than employees, so advising staff on how to manage their finances can come off as hypocritical. If you want to help employees achieve financial well-being, pay them well for the value they contribute. - Patrick Donegan, SEI
10. Lead Team Members To Financial Resources
''You can't manage what you don't measure." Creating a budget is crucial to managing one's expenses. Employees should set aside a portion of their paycheck for savings, create a list of necessary expenses and identify ways to reduce unnecessary spending. Financial education resources and tools can also aid team members in cultivating healthy financial habits and optimizing the use of their paychecks. - Joseph Soares, IBPROM Corp.
11. Suggest Small Changes
According to recent research, money (or lack thereof) is a top three stressor for most U.S. employees today. Stressed employees have trouble focusing and are less productive. Leaders can help employees with financial well-being by suggesting they take the following actions to stretch their next paycheck: cook meals at home, use coupons, carpool, skip Starbucks, cancel Hulu and Netflix and set a budget. - Laci Loew, XpertHR (a division of LexisNexis)
12. Encourage Employees To Track Income And Expenses
Savvy business leaders can encourage employees to create and follow a monthly budget. By tracking income and expenses, employees can better understand their financial habits, identify areas for cost-cutting and allocate funds more effectively. This financial awareness promotes responsible spending and helps make each paycheck last longer. - Siddharth Sharma, JP Morgan Chase & Co.
13. Bring In Financial Consultants
Everyone has their own budget, their own spending patterns and their own income. The one commonality is becoming more educated about how money works and how to navigate it. Bring in financial consultants that will help everyone understand personal budgeting, debt management and savings management. Chances are, more than your entry and mid-level staff would appreciate the learnings. - Cat Colella-Graham
14. Offer Access To Financial Planning Tools
Much like creating a fiscal budget for the business, leaders could encourage employees to work from a zero-based budget for personal finances. Leaders could also offer financial education resources and benefits, such as access to financial planning tools or employer-sponsored retirement plans, to help employees better manage their finances and plan for their futures. - Laura Spawn, Virtual Vocations, Inc.
15. Address Gaps In Knowledge
Leaders can direct employees to resources to learn how to best manage their finances. Budgeting and financial management is a lifelong skill, which is not always taught in university programs, so employees may have gaps in their knowledge. For that reason, education is the most powerful tool for employees to achieve their financial goals. - Niki Jorgensen, Insperity
16. Include Financial Information In Onboarding
Currently, one in three employees is overwhelmed with a high debt load, poor budgeting, overspending and zero savings. This impacts holistic well-being, leading to disengagement. Organically going beyond generic onboarding by including a starter pack on "Finance Power Skills Immersion" ramps the KSA (Knowledge, Skills and Attitude). A power toolkit on "Find and Fix Your Leaky Bucket" and "Leading Your Money" is transformational. - Dr. Christina Augustine, World Vision Canada
17. Consider Your Employees' Circumstances
Because most business leaders earn far more than the average employee, they should be careful that their financial tips don’t appear insensitive to those who may be struggling. One tip is to create a monthly budget, itemizing all expenses and trying hard to stay within its limits. Another tip is to avoid late fees by consolidating multiple debts into a single loan that can be paid down each month. - John Feldmann, Insperity
18. Promote Financial Literacy
Direct employees to reputable sources and organizations that offer financial education and support, such as the Consumer Financial Protection Bureau (CFPB) and the National Foundation for Credit Counseling (NFCC). These sources can help individuals make informed financial decisions, empowering them to stretch their paychecks more effectively. - Ahva Sadeghi, Symba
19. A Note: Be Cautious
This is a slippery slope, as employers should be very careful about offering financial advice. They can, however, do their best to offer free financial education, a 401(k) match, commuter programs, good rates on benefits and discount programs where available. Employers can also permit their employees to engage in alternative working schedules and remote work if business needs allow. - Tracy Cote, StockX
20. Consider A Smaller Team
No business leader should pay their employees salaries that, under normal life circumstances, have to be stretched. Instead, keep a smaller team on staff, but cherish your employees in a way that they are able to maintain a decent living when working for your firm. - Nick Frey, Avomind
