It’s harder than ever to make ends meet. 60 years ago, homes cost an average of two years of income. By 2017, the average home was going for 3.6 times annual household income. It’s far worse here in the west—Denver’s price-to-income ratio has exploded to 5.05. A healthy ratio is 2.6.
Education is more expensive than ever and student loan debt continues to balloon. Credit card debt reached an all-time high in February of 2020, surpassing the 2009 record set during the Great Recession. The #1 reason people are adding to their credit card balance? Groceries.
According to an article from Plan Sponsor the economic fallout from the COVID-19 crisis has caused a surge in employers seeking financial wellness programs, citing financial stress as their motivator. While workers have shifted their focus to short-term needs, the programs themselves are not prepared to address employees’ needs. Employers are responding by adding voluntary benefits that add out-of-pocket expense to employees and push them into the waiting arms of the very financial industry that has incentivized and trapped most Americans in endless debt cycles. Now these “financial coaches” will charge fees and lure workers into paying more for written plans that, if executed, pay more commissions to their coaches.
And that’s for the folks who are lucky enough to have money. The hardest-hit workers will pay coaching fees only to learn that their high-interest debt will take years to dig out of. For many, this coaching is just a reminder of how bad things are and may actually discourage progress.
It’s time for a different approach. It’s time for a partnership with employers that actually gives employees access to new resources, task assistance from an actual human being, and the plan and accountability partner that empower real and lasting change.