The financial health of working Americans has become alarmingly fragile, based on new findings in the Financial Health Network’s Financial Health Pulse® 2024 U.S. Trends Report. More than two-thirds of households (70%) financially unhealthy, and day-to-day financial health indicators—such as short-term savings, debt manageability, spending relative to income, and the ability to pay bills on time—have all gotten worse since 2023.
More employees experiencing high financial stress also means more undesirable outcomes for employers, including higher turnover and healthcare costs, absenteeism, workplace safety incidents – and less employee engagement and productivity.
Read on for a few key insights from the report that can help you determine where your employees most need support, so you can offer relevant financial health benefits that deliver results for your organization.
1. Financial health has gotten worse
Between 2023 and 2024, several key indicators of financial health showed signs of deterioration.
This year’s report revealed that the percentage of households:
- Spending less than they earned declined from 49% to 47%
- Paying all their bills on time fell from 73% to 70%
- Reporting manageable levels of debt or no debt dropped from 71% to 70%
- With less than one week of savings increased from 11% to 13%
After a few years of inflation and high interest rates, many households slid backward in their financial health journeys.
What it means for employers: Employees need financial health benefits with safe solutions that address their cash flow shortages, debt, and lack of savings to prevent them from falling further into financial precarity and help them regain their financial footing.
2. Middle-income earners have become more vulnerable
Frontline, lower-wage employees continue to be more financially vulnerable than the rest of the workforce – but they’ve now got company. Since 2023, the percentage of financially vulnerable middle-income households rose from 11% to 14%.
What it means for employers: More financially stressed employees without access to financial benefits that can address their pressing financial needs will mean higher healthcare costs for employers – an additional $1, 200 per employee, on average. This will prove especially challenging for organizations with medical cost growth projected to rise to the highest level in 13 years by 2025.
3. Debt management support is a must
The percentage of households with credit card debt that paid all their bills on time, had enough savings to cover at least three months of expenses, and had manageable levels of debt all decreased since 2023. Households with credit card debt also reported struggling with immediate financial concerns more frequently than in past years.
Yet, the report also revealed that that people have hope and the desire to improve their financial lives, with the percentage of households planning for the future rising from 45% to 50% in 2024.
What it means for employers: Employees need tangible solutions to help them manage and pay off their debt, so they can free up the cash flow to focus on building the financial future they want, including contributing to retirement accounts and using other longer-term financial health benefits you may offer.
4. Households without investments struggle more
In 2024, day-to-day financial health indicators decreased for households without investments, while forward-looking indicators improved for those with investments. While that may seem obvious, it underscores a critical reality that should not be underestimated. To be able to invest, employees need to have enough money to cover basic living expenses, bills, debt, and savings.
Unfortunately, many employers offer benefits such as financial planning or retirement solutions—essentially the end of the financial health journey—without addressing the immediate needs of the 70% of Americans who are not financially healthy.
What it means for employers: Until employees get help overcoming their financial burdens and barriers, they cannot progress on their financial health journey. As a result, employers will continue to see low engagement and little ROI by offering financial wellness benefits, which are only suited for a small percentage of employees who have money and need help managing and growing it.
5. Racial and ethnic financial disparities persist
Black and Latinx households experienced notable declines in day-to-day financial health indicators between 2023 and 2024. For example, the percentage of:
- Black households that spent less than their income dropped from 42% to 35%
- Latinx households paying their bills on time fell from 64% to 54%
What it means for employers: These disparities highlight the need for inclusive financial health benefits that are equipped to address the unique challenges underrepresented groups face. This should include removing language, cultural, or social barriers that may prevent certain groups from using benefits.
The business case for investing in financial health benefits that meet employees where they are
The data is clear: employees are struggling, and it’s costing companies money. Financial health benefits can be a strategic investment that yields significant bottom-line improvements, but employers need to join the ranks of innovative employers such as Amazon, who are improving employee financial health and seeing measurable ROI, by thinking beyond financial wellness.
Brightside Financial Care offers real solutions that support employees’ financial health combined with empathetic, personalized support that meets every employee where they are without judgment. This ensures that Brightside users are comfortable opening up to their Brightside Financial Assistant about their situation and all of the areas in which they need help, so they’re encouraged and motivated to take steps toward improved financial health. It’s why employees who connect with Brightside engage with us for help with three or more financial needs – and why they say we’re the “best benefit their employer offers.”
To learn more about Brightside Financial Care, click here.
