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Budget Coaching for Government Employees
A personal budget empowers individuals to take control of their finances and helps to avoid the burden of debt. Because a budget involves creating a spending plan, it encourages employees to prioritize their spending, and to save for the future. After employees create their first budget, they can make it a regular practice, and take an active role in keeping their finances on track.
Through personal budgeting, government employees can reduce stress, be more relaxed at home, and be more productive at work.
Why Budget Coaching is Important for Employees
Helping your employees overcome their financial challenges decreases stress levels, increases confidence, and improves work performance. In fact, 67 percent of employers in North America who offer financial education to their employees rate the programs as successful. This allows employees to focus on their job without distraction and garner more satisfaction from their work. This leads to efficiency and an overall better work environment.
Budget coaching is just one part of a financial wellbeing plan, which much like a physical wellness plan, can help team members develop a sense of security and sustainability in their lives. Keep in mind that money is the number one stressor in the United States. When people are burdened by their out-of-control finances, they are negatively affected physically, mentally, and emotionally.
Providing employees with budget coaching can make a positive impact on many aspects of their lives. Coaching can take on a variety of forms. As an HR leader, talk to your employees on an individual basis to assess their needs. You may find that they would benefit from in-person seminars, which can be made available during work hours. Or perhaps a recorded webinar would be more suitable, so that employees can watch it in the privacy of their own home. It is helpful to accompany either of these with informational literature or online budgeting tools.
Although there are many information-based financial resources available, it can be challenging for employees to find the best ones on their own. For this reason, we recommend inviting an experienced budgeting coach or financial wellness trainer to your company to speak to members of your team. An in-person coach can show employees how to find the right tools and how to use them. Also, having a coach who is physically present allows employees to ask questions that pertain most to their own situation, providing greater value.
How Can You Help Employees with Budgeting?
At TrueConnect, our focus is on creating financial health and wellbeing for your employees. These tips can help your employees with their budgeting:
- Encourage them to sign up for direct deposit banking: When employees have their paychecks direct deposited into their bank accounts, it provides several advantages. First, because the funds go straight into an account, it reduces the temptation to spend right away. Second, it makes it easier for employees to pay their bills directly. And third, it gives employees an easy way to reallocate a portion of each paycheck to a savings or retirement account, so they can rely on this “extra income” whenever they need it.
- Help them create a personal budget: When employees have money coming in on a regular basis, you can create a good financial ethic by helping them create a personal budget. This will be worth the time because it is well documented that employees who are financially healthy are happier and more productive in their opportunities. Additionally, employees who participate in financial wellness programs at work tend to be more loyal to their company. A great way for employees to keep tabs on their income is by using personal money management software to help them create a budget, track their spending, and identify where changes need to be made.
- Assist them in setting up an emergency fund: Emergencies arise when least expected, and employees deserve to have a financial safety net to protect them in case of a financial crisis. As a responsible employer, it’s crucial that you show employees the importance of an emergency fund. They can create one by putting a small amount of money away each month so that they have it on hand when something unexpected happens like the car breaks down, the HVAC stops working, or a medical bill.
- Encourage them to focus on reducing their debt: Debt reduction is an important part of money management. Employees need encouragement to face their debts head-on, to pay their bills on time, and to pay a little extra to reduce the amount owed. You could do this by having a debt expert come to your place of work and talk to your employees in a workshop or let them make individual appointments to talk in private. You could also provide literature on debt management in staff areas.
- Help employees to establish and IRA or 401K: Employees don’t just need money now, they will also need it when they retire. For many employees, retirement may seem far away, but it’s important that they start saving now for when the time comes. That way they will have more money when they do retire. If your company offers a 401K employer match, encourage your employees to contribute the maximum pre-tax amount. If you don’t offer a company-sponsored retirement plan, advise employees to set up an IRA.
- Help employees with adequate health care coverage: If your employees are not using their health benefits to their full extent, help educate them about available coverage. For example, your employees may not be aware of plan options that provide full or subsidized medical care for dependents. Enrolling a family on a joint plan can result in monthly cost reductions, with money left over each year for a savings fund.
- Encourage employees to develop long-term goals: Remind your employees that now is the time to begin making plans for long-term goals. Help them focus on the future by visualizing their goals. You can do this by having discussions about what they are aiming for, whether it’s their own home or a new car, and how fulfilling it will be to achieve that goal. Providing employees with tools which can help them plan their budget carefully and commit to saving money is a great way to improve their financial wellness and build their trust.
- Help your employees develop sound tax strategies: The largest percentage that employees pay out of their paycheck is taxes, so you can improve their financial wellness by helping them maximize their take-home pay. Showing them how to use the IRS withholding calculator will help them prevent under or over paying their taxes each year. If they have business-related expenses, they should also be encouraged to save the receipts so they can deduct the amount from their taxes.
If you are an employer who hasn’t yet considered budget coaching for your employees, we encourage you to talk with them, and see how you can help them take control of their finances.