We turned the calendar to November, officially ushering in the holiday season. This is frequently the time of year many in the workplace are in the celebration way, using remaining PTO, maybe looking forward to a bonus, and, as statistics show, a third acquiring debt to obtain extras. It is also, for many, open enrollment time for benefits. According to MagnifyMoney, that debt averaged almost $1,400 in 2020, and that amount was up 40% since 2015. With national prices on gas, consumer goods, and groceries at a minimum up 5% over this time last year, the increases are not only hitting individuals hard but also businesses as the cost of business goods is up equally, if not more, and wages are forced to go up to obtain and keep top talent.
In March 2020, when the pandemic was in full force nationally and people were losing their jobs at record numbers, we shared the advice from Brock Long, former FEMA chief, who was observing how many Americans did not have nest eggs or ways to improve on their future as former generations did. What we see in the employment business is those who do—whether proactively seeking their next career move while currently employed or unexpectedly unemployed—don’t have to take the first option that comes their way. They think much clearer through the process while seeking employment and they usually get the higher offers, not because of the holdout, but because their life discipline is not only recognized with their financial management but also in their stewardship in the workplace.
Did you know, the first credit cards, Diners Club, were given out in 1950 to 200 people, and by the late 1950s, Mastercard and Visa arrived on the scene? According to the Federal Reserve, credit card ownership and use went from under 100,000 people in the 1960s to 73% of all households in America having at least one credit card in 2000. According to creditcard.com’s article from May this year, “lenders have shown caution when extending new credit, perhaps due to Americans’ financial challenges during the pandemic. Average new account credit lines decreased to $3,696 in the first quarter of 2021 from $5,128 the year before, according to a May 2021 TransUnion report. And the number of credit cards fell from 457.6 million in Q1 2020 to 454.6 million in Q1 2021.”
Combine the statistics on credit card debt with the fact that the national tax rate will be going up to pay for the new infrastructure bill. Already, working Americans pay a third of their earnings a year in taxes, and we have the potential of that going as high as 50% by 2025.
What are some ways both employers and employees can assist with helping one another?
- Implement tax savings plans into your businesses to assist employees with tax-deferred income for retirement, such as 401K, Roth IRA. FSA and HSA plans help employees with tax-deferred savings for medical and childcare costs. FSA and HSA plans are only available to people through an employer that offers them.
- If you have a use-it-or-lose-it PTO plan, offer a portion of the days to be paid in wages instead of taken. Time off is important to take to recharge, although every employee is different, and some employees don’t require as much time off, even if earned. If they have unexpected financial needs one year, it also gives them a way to earn extra income without taking a side job. A plan with choice helps both the employee and the employer as we all know labor shortage is a problem for all businesses right now.
- Enlist an advocate within your organization or an outside source who can help your employees learn how to take advantage of the benefits you offer, assist with helping them budget and plan based on their annual wages, and discuss ways they can potentially earn additional income for their families, if needed, without jeopardizing their full-time job and commitment to you as an employer. If you use a PEO company, such as ADP or Paychex, they may have experts as part of your plan to assist with options or a help number you can provide to your employees.
- Understand your benefits and take advantage of all the benefits an employer offers to you. Ask for help if you do not understand what is offered to you or how to participate in the programs.
- Remember, if you have financial challenges, it is not your employer’s responsibility to bail you out; although, if you are a dedicated, proven member of the team, many have been known to offer short-term loans and other financial help for single-instance circumstances to help you focus on your job and stay employed by them.
- Develop a budget and self-discipline. Speaking from experience, this does not come overnight, and you will often need a support system in place to develop fiscally smart habits. But if you do, it will open doors in the future you never thought imaginable.
We communicate with employers when an employee is leaving a job for more money and also with employees when they are considering leaving a job for more money. The money talk is “a conversation and not a resignation.” If someone is leaving for more money and not to achieve a career goal, such as taking on a role not available to them with their current employer, lessening their commute, eliminating nights and weekends from their work schedule, or something unachievable with their current employer’s business model, they are leaving for the wrong reasons, and the pattern will repeat itself. Not to mention, if someone is not fiscally responsible in their personal life, what makes you think they will be in the workplace?
To Growing Your Paycheck before a Raise,