Will the global economy enter a recession in 2025, or are we out of the woods? Has inflation slowed — stopped, even — or will prices continue to climb? Is the economy “good” or “bad”?
Who knows?
We offer countless concrete, data-driven, and (we hope) reliable answers in this space. Still, we’re not about to wade into the many differences of opinion over the current and future state of the economy.
But what we can say for sure is this: Regardless of the macroeconomic reality, people are worried about their financial situations. And financial worries can creep into every aspect of a person’s life, including work.
Financial anxiety is not something the typical worker can just “leave at home.” Worries about debt, paying bills, and housing costs can consume a person’s thoughts from morning to night.
Helping your company’s employees get a handle on their financial anxieties will help improve their focus and engagement at work, which, in turn, will lead to higher productivity, improved morale, and a healthier bottom line for your organization.
Related: Three Financial Wellness Email Templates. Read it here →
Financial Stress in 2024: It’s Real
You don’t have to look far to find a financial guru counseling calm about the 2024 economy. Things may feel bad, they say reassuringly, but actually, the outlook is good.
But let’s leave behind the economic indicators because how people feel matters.
Here is a snapshot of the average American’s economic anxieties:
- Six in 10 Americans feel the country is currently in a recession; that includes high- and low-income households.
- 62% of Americans rate the state of the economy as “bad.”
- Nearly two-thirds of Americans do not think their personal financial situations will improve in 2025.
To sum it up: Unemployment is low, economic growth is strong, and inflation is falling. Nevertheless, most people feel pessimistic about the economy in general and their own finances in particular.
The disconnect comes from the fact that most people do not view the economy the way economists do; they see it through the lens of their own experiences. As one analyst says:
“While economists are watching carefully for broad-based declines in growth, households focus on whether they can afford their needs and the occasional wants while still having enough money left over to put toward key financial goals like saving for emergencies and retirement.”
The inflation rate has tailed off, but for many, the cost of essential goods and services — including food, housing, fuel, and utilities — remains painfully high. While average wages have increased, the bump has not been sufficient for many people to offset the high cost of living.
In short, positive economic headwinds are cold comfort to people throughout the country who are struggling to make ends meet and watching helplessly as their financial goals seemingly slip beyond their grasp.
How Financial Anxiety Impacts Mental Health
Researchers have repeatedly documented how financial concerns contribute to mental health issues such as depression, anxiety, and addiction. Among other things, financial stress can cause sleepless nights, damage self-esteem, and spark interpersonal conflict, all of which take a toll on a person’s well-being.
“…igher financial worries were significantly associated with higher psychological distress,” reported one research team..
Unfortunately, nearly everyone is currently experiencing some level of financial anxiety. According to a recent survey by Capital One and The Decision Lab:
- 77% of Americans say they are anxious about their financial situation.
- 58% feel their finances control their life.
- 52% report difficulty controlling their money-related worries.
Furthermore, the study found that financial stress has caused fatigue, difficulty concentrating at work, and sleep disturbances in four out of 10 respondents.
Financial Stress In the Workplace
Chronic stress can severely impact an employee’s job performance, whether triggered by financial concerns or other factors. Unmanaged stress contributes to:
- Reduced productivity
- Increased absenteeism and presenteeism
- Lower engagement levels
- Burnout
- Turnover
According to a MetLife survey, employees who feel positive about their financial status are happier (84% vs. 55%) and more engaged (78% vs. 53%) than those with financial worries. Another recent study found that financially stressed employees are twice as likely to seek new employment.
So, helping your company’s employees manage their financial anxiety is not just good for their health. It’s great for your organization. What can your company offer?
Tips for Teaching Financial Wellness in 2025
Over the last several years, employers have become increasingly aware of the value of promoting financial wellness in the workplace.
Financial wellness, according to the U.S. Consumer Financial Protection Bureau, is “defined as having financial security and financial freedom of choice, in the present and in the future.” In other words, financial wellness is all about reducing stress by building a solid financial foundation.
Many employers now see financial wellness as a pillar of overall well-being and have incorporated financial wellness resources into their employee wellness programs. Some typical financial wellness benefits include:
- One-on-one financial counseling focused on achieving financial goals such as saving for retirement, paying off debt, or buying a home.
- Discount programs to help employees save on everything from groceries to vacation travel.
- Free access to digital budgeting and savings tools and apps.
- Individual and group financial wellness challenges, such as saving a certain percentage from every paycheck or cutting back on unnecessary expenses for a defined period.
- Emergency savings funds to help employees set aside money for unexpected expenses.
Financial wellness resources can also take the form of education.
For example, you might share short explanatory videos designed to unravel the complexities around your company’s savings benefits, such as your 401(k) plan or HSA offering. Brief (and we do mean brief) emails tied to annual events such as tax season can capture your employees’ attention when their financial anxieties are at their peak.
Finally, don’t overlook the importance of learning to manage stress. After all, in an uncertain economy, some financial anxiety is almost inevitable. Mindfulness programs and apps can help your employees gain perspective, focus, and calm throughout our tumultuous times.
Recession or Boom? Help Your Employees Prepare for Anything
At its core, financial anxiety is worrying about the unknown — which is perhaps why so many people are experiencing it right now. The current economy is so uncertain that even experts can’t agree on where we’re headed.
But while you can’t reassure your company’s employees that everything will be fine, you can help alleviate their stress by offering useful and timely financial wellness resources and education.