Another Reason to Have a Solid Financial Plan
By Ric EdelmanAs if you needed one.
Do personal finance worries cause you so much stress that they impact your performance at work?
If so, you're not alone — and your employer knows it.
In a survey of HR professionals by the Society of Human Resource Management, 72% said that compared to previous years, employees are now more likely to dip into their retirement plans at work. And 83% found that employees' money concerns are adversely affecting their performance.
The HR professionals also found that of those struggling with personal-finance issues:
46% display stress at work;
26% have lower productivity;
24% have increased absenteeism and tardiness; and
20% have lower morale.
Asked about the causes, 49% of the HR professionals said employees are stressed by "overall lack of funds to cover personal expenses." Of those who were more specific, 35% cited medical expenses and 26% cited saving for retirement as the leading stressors. Education expenses, mortgage payments and credit card debt were all cited as well.
Meanwhile, a study conducted by the research firm Financial Finesse, which has been tracking trends in employee financial issues for 13 years, reported more positive findings. It said that since 2009, the percentage of employees reporting high or overwhelming financial stress dropped from 33% to 19%. "There appears to be a distinct correlation between a growing number who are able to comfortably manage their finances and reduced stress levels," the report said.
This study found that workers in 2011 improved their financial situations significantly in two key areas:
Cash-flow management, with 72% having spent less than they earn each month in 2011 vs. 56% in 2009.
Building an emergency fund, with 56% having one in place last year vs. only 39% in 2009.
On the downside, most workers remain uncertain that they are on track to retire despite improving their financial situation, with only 17% saying they feel well-prepared, the study found.
There's a lesson in these two studies. Do you recognize it?
The studies show that those who have control of their personal finances experience less stress, better morale and greater confidence about their financial future. And that is likely to lead to better performance at work, which can result in raises, promotions and better overall job satisfaction — a virtuous, rather than vicious, cycle.
And good financial management requires a solid financial plan.
Do you have one?
If not, an independent, objective, fee-based financial advisor can help you develop one.
Not sure how to find an advisor? Call us. We're happy to answer your questions and to help in any way we can.Originally published in Inside Personal Finance June 2012