Financial worries affect sleep, workplace effectiveness

A recent camping trip reminded me of many things that can keep people awake at night, including barking dogs, snoring people, raiding raccoons and rocky ground. There’s another culprit that can cause insomnia. Seventy-nine percent of respondents in the National Foundation for Credit Counseling (NFCC) July poll say their personal finances are keeping them awake at night.

Wellness experts have long noted connections between personal finances and health. Financial worries can lead to anxiety, headaches, sleepless nights and less effective employees.

The Society for Human Resource Management (SHRM) surveyed human resources professionals asking what financial challenges they see among their employees. According to the 2014 “Financial Wellness in the Workplace” survey, 42 percent reported that medical expenses are the biggest personal financial challenge affecting employees, while 41 percent reported an overall lack of money to cover personal expenses is affecting employees the most.

Financial challenges can decrease the effectiveness of employees at work. Seventy percent of the SHRM’s HR professionals said that financial challenges have a large impact or some impact on employee’s performance. Thirty-eight percent say that workers are facing more personal financial challenges now than they were before the great recession hit in 2007.

A recent Gallup poll confirms the challenges HR professionals identified in the SHRM survey. People ages 18 to 29 worry about being able to pay medical costs, maintaining their standard of living, paying off their debt, paying their rent and paying normal monthly bills. In another Gallup poll, “Job Loss Would Quickly Lead to Hardship for Many in US” Fourteen percent of people said if they lost their job they could only last one week before experiencing significant financial hardship and 29 percent said they could last up to one month.

The SHRM survey and Gallup polls reveal the fragile state of many individual’s personal finances. When people are living paycheck to paycheck, they struggle to pay their day-to-day bills and worry about how they would pay medical bills or other unexpected expenses.

While many employees are straining to cope with day-to-day expenses, most workplace financial education programs focus on planning for retirement and financial investment planning. Although saving for retirement is a common concern, it is wise to recognize that different segments of the workplace have different needs. For example, when HR professionals were asked to identify the education topics millennials would most likely participate in, 31 percent said financial investment planning, 24 percent said general budgeting advice and 14 percent indicated retirement education.

It’s encouraging that 57 percent of the SHRM respondents provide financial education to their employees. But more workplace education could focus on general budgeting advice. Good planning can reduce financial stress, improve sleeping patterns, boost regular savings and enable people to free up cash flow so they can save for long-term goals like retirement.

– Alan Prahl is with FISC, a nonprofit program of Goodwill NCW. He can be reached at [email protected].