A Tale of Two Economies: New Data Reveals a Widening Gap in the Financial Health of Americans

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Jun 05, 2024, 10:30 ET

Financial Finesse research finds macroeconomic conditions are generating additional wealth for those with assets while simultaneously impoverishing those already struggling.

EL SEGUNDO, Calif., June 5, 2024 /PRNewswire/ -- Financial Finesse, the country's leading independent provider of unbiased workplace financial wellness coaching programs, today released Workplace Financial Wellness in America, an annual snapshot of the American workforce through the lens of financial wellness. The flagship study from the Financial Finesse Financial Wellness Think Tank™ analyzes employee financial stress and resilience levels, reporting on how workers feel about their finances, what's contributing to the financial wellness gap, and the role of holistic financial wellness programs in addressing these issues. This study comes along with the release of Combating Employee Financial Stress, a companion report featuring proven tactics employers can use to increase the efficacy of financial wellness benefits.

Financial Wellness is measured on a 1 - 10 scale. Scores of <3 are considered to be in crisis, while scores of at least 8 are considered to be in the optimizing stage. From 2022 to 2023, the percentage of employees in financial crisis increased by 24% while the percentage of optimizing employees increased by 69%.

"The story we're seeing emerge from this past year is a tale of two economies," said Liz Davidson, Financial Finesse Founder and CEO. "While there are encouraging signs with gains in the stock market and more people reporting financial stability, these positive trends come from people with existing assets. Persistent inflation and higher interest rates have left Americans who are struggling more financially vulnerable than ever."

Key findings from the report include:

Financial stress is increasing overall: Regardless of income level, American workers were more likely to report feeling high or overwhelming levels of financial stress than in prior years, with financially stable employees concerned about a looming recession and financially struggling employees worried about their ability to make ends meet. The percentage of employees reporting unmanageable levels of financial stress rose by 16% from 2022 to 2023.
Financially stable employees with assets are pulling ahead: The percentage of financially secure employees increased by 69% from 2022 to 2023.
At-risk employees are falling farther behind: The percentage of employees in financial crisis increased by 24% from 2022 to 2023.

The report also analyzed the effectiveness of financial coaching, finding that more than half of workers (52%) who initially reported high or overwhelming financial stress subsequently reported some or no financial stress after working with a financial coach. Additionally, after working with a financial coach, there was a 53% increase in those who were in the stable planning/optimizing stages of the financial wellness journey, having progressed from the uncertain and significantly more stressful struggling/crisis stages.

"Americans have been living under extreme levels of financial stress for far too long without guidance on how to navigate these challenging economic times," said Greg Ward, CFP®, Director of the Financial Wellness Think Tank, and one of the report's authors. "The good news is that more employers are implementing financial coaching programs to address this issue. Not only is this good for their employees, but it's also good business." Leveraging a proprietary predictive ROI model developed by the Think Tank and featured in an essay awarded first place by the Society of Actuaries, the report details how employers who implement financial coaching can save an estimated $587,125 per 1,000 employees. These savings come from reduced stress-related healthcare claims, lower turnover, and less unplanned absenteeism.

Download the full Workplace Financial Wellness in America report HERE and the Combating Employee Financial Stress companion report HERE.

Media Contact:
Maggie Weinberg, Financial Finesse
[email protected]

About Financial Finesse
Financial Finesse is the country's leading independent provider of unbiased workplace financial wellness coaching programs. Since 1999, the firm has helped tens of thousands of organizations improve their bottom lines and become more competitive by empowering their employees to achieve financial security. The company's award-winning financial wellness programs are made available to employees at no cost as an employer-sponsored benefit. With highly personalized and ongoing one-on-one coaching from CFP^® professionals, AI-powered virtual coaching, live workshops, webcasts, educational tools, and content, Financial Finesse has worked with millions of employees to build better financial lives for themselves and their families.

SOURCE Financial Finesse