Own a Small Business? Why It Pays to Skip 'Financial Wellness' Programs and Offer This Instead

You might as well spend your money on something that will have an impact.

As a small business owner, your resources may be limited. You may not be able to offer your employees the generous 401(k) match you'd like to give or perks like top-tier health insurance and onsite meals.

But it's important to focus your limited resources on benefits that will truly have an impact on your employees. And that means knowing which ones to skip, and which to support.

You can skip the wellness programs

Many businesses make a point to offer their employees financial wellness programs. These programs are designed to help employees do things like invest their money and work toward long-term goals.

These programs are appropriate in some situations. The problem, though, is that many workers today are in a position where they can't benefit from them at all.

A recent survey by SecureSave found that 74% of Americans live paycheck to paycheck. And 67% do not have enough money in savings accounts to cover an unplanned expense costing $400.

Workers in this situation don't need financial wellness programs, insist Devin Miller, CEO at SecureSave, and financial expert Suze Orman, co-founder of SecureSave. That's because workers in that boat won't and can't participate. After all, what's the point of talking about things like investment strategies and asset allocation when you don't even have enough money in the bank to replace a dead car battery or repair a faulty sink at home?

A better benefit to offer employees, according to Miller and Orman, is an opportunity to seamlessly build emergency savings. And that's what SecureSave does. It partners with businesses to set workers up with automatic payroll deductions. Only instead of the money going into a retirement plan, it goes into an emergency savings account that workers can tap as needed without penalty.

One trap many people run into is that they actually do have some money in a retirement plan. Only when a near-term need for cash arises, they can't tap their retirement savings without facing a whopping penalty. A dedicated emergency savings account could help workers keep their nest eggs intact and avoid penalties when unexpected circumstances, like sudden home repairs or medical bills, arise.

Address your workers' most basic need

If you've been thinking about offering a financial wellness program to your team, you might truly have the best of intentions. And if you have reason to believe they'll benefit from it, then by all means, go through with it.

But before you set that program up, think about your typical employee. Are they earning $40,000 a year, or $140,000? Are they in a good place financially, or are they more likely just scraping by?

Helping your employees build emergency savings is one of the most important things you can do for them. Of course, if you're able to raise wages to help your employees boost their cash reserves, that's even better. But in the absence of being able to do that, it could pay to explore your options for helping workers build the cash reserves they need to buy themselves financial protection.