The past decade has been an economic rollercoaster ride for the majority of Americans. Even as the stock market soared to new heights and unemployment reached — and remained at — a 50-plus-year low, Americans still found themselves struggling financially. High prices at the grocery store and gas pump were a major contributor, but another factor has been the tendency of many Americans to live beyond their means — and spend beyond their paycheck.
More than half of Americans admit to spending more than they earn, leading to an unprecedented financial crisis. A whopping 83% of U.S. households have at least one type of debt, averaging $104,215. The most common are credit card debt and mortgage debt, but student loan debt, auto loans and medical debt contribute substantially to that total as well.
Perhaps even more concerning, 42% of American adults don’t have an emergency fund, a designated account containing enough savings to cover three to six months of living expenses in the event of a job loss or other catastrophic event. Among those without such a fund, 40% wouldn’t be able to cover a surprise $1,000 expenditure. In other words, something as simple as an unexpected car repair or medical bill could easily sink them further into debt.
Widespread financial struggles
With so many people struggling to keep their heads above water, it’s no wonder the 2024 Alight Workforce and Wellbeing Mindset Study found American workers feeling decidedly unconfident of their financial wellbeing. Just 39% of employees rate their financial wellbeing highly, a 7% decline from the previous year and the lowest across all of the wellbeing dimensions. Half of all workers say that finances control their life and 40% feel there’s no way they’ll be able to retire at the age they want.
of employees rate their financial wellbeing highly
Nearly half of employees say they are just getting by financially. However, a higher income is not a cure-all because 39% of people making six figures say they, too, are just scraping by. According to digital financial services provider SoFi, an Alight partner, high housing costs, a lack of financial literacy and lifestyle creep — a phenomenon that occurs when former luxuries become perceived necessities — are the primary reasons why so many high-income earners are living paycheck to paycheck.
Women fare much worse than men, with just 31% rating their financial wellbeing highly, compared to 46% of their male counterparts, according to the 2024 Mindset Study. They are also far less likely to have money left at the end of the month (36% of women vs. 56% of men), and far more likely to be concerned that the money they have or will save won’t last (55% vs. 48%). Factors such as the gender pay gap and the tendency for a drop in earnings when some women temporarily leave the workforce to raise children during their formative years can having lasting effects.
Generational disparities are also evident when it comes to financial wellbeing. Gen X is most likely to report they are in a financial pinch, with 59% saying they are concerned the money they have or will save won’t last. This is creating a mounting retirement problem. Caught in the "sandwich generation," many Xers are caring for both children and aging parents, leaving over 60% worried about their ability to amass enough retirement savings to carry them through their golden years. As a result, nearly half of Gen X say there is no way they’ll be able to retire at the age they want.
worried about their ability to amass enough retirement savings to carry them through their golden years
Most Baby Boomers have already reached retirement age, but many are not financially prepared to leave their working years behind. Well over a third (39%) say they are just getting by financially and 37% say there’s no way they will be able to retire when they want. Nearly half (44%) express concern that the money they have or will save won’t last. Not surprisingly, the younger generations are feeling even worse about their financial situations, with 49% of Millennials and 50% of Gen Z saying they are just getting by financially, while 55% and 52% say their finances control their life.
Employees welcome assistance
Clearly, financial struggles are not limited to certain segments of society. They are prevalent across populations with no regard for gender, generation, race or income. This creates a responsibility and an opportunity for employers to provide the necessary support and resources for their people to improve their financial wellbeing.
Employees are well aware they lack the ability to get their finances in order. Less than half (47%) say they feel in control of their finances. That’s truly alarming, but the good news is they want help changing that. In fact, two-thirds (65%) say they would be comfortable sharing financial information in exchange for personalized one-on-one coaching or advice.
According to the 2024 Mindset Study, 90% of employees who used personal financial coaching say it was valuable to them, and another nine in ten found value when they took advantage of saving and planning tools. Nearly two-thirds (64%) believe getting paid more frequently would help them meet their financial responsibilities, which can be done through wellbeing programs offering earned wage access.
For employers, the path forward is clear. Building a culture of wellbeing must include a focus on employee financial health. There are many benefits to better financial wellbeing — not just to the individual but to their employer. People with high financial wellbeing are more than twice as likely to say they have no symptoms of job burnout and two-thirds of workers with high financial wellbeing scores say they are likely to stay with their employers as compared to half of the others.
As the data shows, however, the problem with financial wellbeing is widespread, impacting the entire employee population. Therefore, it’s important to recognize that employers must adopt a strategy that provides personalized guidance and resources, rather than expecting a one-size-fits-all tool to meet the disparate needs of a diverse workforce.
While Gen X and Millennials may be focused on building their retirement funds and paying down debt, Gen Z is more likely to want guidance on budgeting, managing student loans and perhaps saving for a house. Meanwhile, Baby Boomers might need help assessing their retirement readiness and determining when they will be financially ready to ride off into the sunset.
A growing number of organizations are embracing a tech-enabled approach to employee financial wellbeing that delivers timely, targeted tools and resources, paired with the guidance and empathy that cannot be replicated by technology. When employees are provided this kind of high-tech, high-touch support, not only does their financial wellbeing improve, but productivity, engagement and loyalty follow suit, as they gain a deeper understanding and appreciation for the investment their employer is making in them.
