What is employee financial wellbeing?

What does it mean to be financially well? It's a question many employers ask as they explore the world of workplace financial wellbeing benefits.

For diverse employee populations, financial wellbeing may mean something different at each life stage and level of financial confidence.

To set the right goals for the workforce as a whole, it's key to define what financial wellbeing means from a holistic standpoint.

Here's a definition our team at LearnLux offers for your consideration:

The Definition of Employee Financial Wellbeing

Financial wellbeing is a state of being where an employee can meet current and ongoing financial obligations. It means empowering each individual to feel secure in your financial future.

“How much money do you need to achieve financial wellbeing?”

It’s a common misconception that financial wellbeing is tied to income, assets, or bank account balances. The truth is, there is no specific dollar amount that someone must have to be financially well.

Instead, the definition of financial wellbeing (sometimes referred to as financial wellness) is closely tied to a person’s sense of financial stress and financial confidence.

The Five Pillars of Workplace Financial Wellbeing

Financial wellbeing in the workplace can take on many definitions, as it encompasses elements of economic stability along with the emotional and psychological aspects of one's financial health.

For some, it may mean having a robust retirement plan, while for others, it could be about managing day-to-day expenses with ease.

These diverse interpretations underscore the importance of tailoring financial wellbeing programs to meet the unique needs and goals of employees.

Across all income and asset levels, five pillars of financial wellbeing can serve as a holistic benchmark:

1. A manageable level of stress associated with current and future financial matters
2. A manageable level of debt—or no debt at all—that can be paid off without financial penalty or significant stress on an individual’s financial situation or lifestyle
3. Enough disposable income to maintain a desirable lifestyle that is within reason
4. An ample emergency savings fund that can sustain an individual’s lifestyle for a bare minimum of three months
5. Financial acumen that will allow them to plan appropriately for future goals and respond to unforeseen financial obstacles

Explore the pillars of holistic employee wellbeing including physical, mental, financial, and more in the guide:

Improving Your Workforce's Financial Wellbeing

Once you've defined financial wellbeing for your unique workforce, now it's time to take action. There are quite a few financial wellbeing programs on the market today, each with their own pros and cons.

Innovative employers have started looking beyond what has traditionally been considered workplace financial wellbeing. Lunch & learns, jargon-filled education from 401(k) providers, and point solutions like budgeting and debt paydown apps are no longer considered the gold standard.

Instead, workplaces are partnering with program providers that are unbiased, holistic, and blend digital and human guidance.

Ready to learn more about what's on the financial wellbeing market today? Click here to download the Workplace Financial Wellbeing Buyer's guide.