A greater number of Americans are living on a shoestring budget in 2024, finds a new report out today by financial wellness platform FinFit and HR Dive’s studioID.
The findings from the survey, “Inside the Wallets of Working Americans,” reports that three out of four workers are “living paycheck-to-paycheck.”
This is especially true for workers who earn less. According to the findings, 77% of workers making less than $55,000 are just scraping by, compared to 76% of those earning between $55,000 to $69,000, and 70% for employees making more than $70,000 a year.
As a result, well over half (60%) of respondents are experiencing stress and anxiety when thinking about their finances.
Financial stress continues to extend into the workforce, too, as 36% say they have spent three hours or more at work thinking about or dealing with personal finance issues, while 38% report even taking off work to deal with personal finance issues.
“Living paycheck to paycheck is, by definition, going to result in financial stress,” said FinFit Chief Commercial Officer Michael Woodhead. “That’s especially true when workers are faced with unexpected financial shocks.”
To curve financial stress and grow their short-term savings, more employees are seeking emergency savings benefits from their employers. The findings report that if workers were to lose their current income, 53% said they could meet their regular expense for just one month or less before needing to borrow money. Nearly three-quarters of respondents (72%) said they do not have cash buffers or liquid savings. Of those who do, their savings add up to less than $5,000.
In considering the long-term, over two-thirds of workers said they do not know whether their savings will suffice for them once they retire, and 53% say they feel worried when considering the state of their retirement savings.
This is particularly pertinent among those who have borrowed against their retirement (53%) because it was the least expensive loan option available to them.
Offering emergency savings features could not only reduce financial stress and increase productivity in employees, but it could also incentivize them to stay with their employer, the research notes. The survey finds that if plan sponsors were to offer emergency savings accounts, 80% of workers would be more likely to stay with their company.
“That’s why employers need to think about how to solve this problem,” Woodhead said. “Workers who are stressed are not as productive because they cannot focus on the minute-to-minute and day-to-day activities that are required for them to execute their job.”
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