Employees Can Turn to Voluntary Benefits at Work to Tackle Unexpected Expenses
Voluntary benefits can be a better alternative for employees seeking options to meet short-term financial needs, according to Purchasing Power.
ATLANTA, June 10, 2020 /PRNewswire-PRWeb/ -- Paying for unexpected expenses is always a challenge for employees living paycheck-to-paycheck, and the financial effects of the coronavirus pandemic makes it even more difficult. Fortunately, many employers offer an array of voluntary benefits that could be alternatives for employees who need to cover certain unexpected expenses.
Even prior to the pandemic, unexpected expenses caused financial stress for workers living paycheck-to-paycheck with little or no emergency savings for unexpected expenses. Results of a survey conducted by The Harris Poll on behalf of Purchasing Power® in December 2019 among 807 U.S. adults who are employed full-time revealed that 83 percent had an unexpected expense in the past 12 months (January – December 2019).
Employees were asked what the unexpected expenses were that they incurred. According to the survey, those were:
- vehicle repair/replacement – 48 percent
- medical costs like a sudden illness or increase in cost due to pre-existing conditions – 35 percent
- travel for things such as a funeral, sick relative or unexpected move – 28 percent
- replacing or upgrading a major home appliance that stopped working – 28 percent
- home repairs – 27 percent
Paying for those unexpected expenses can send those living paycheck-to-paycheck further into debt. According to the same Harris Poll survey, workers who had unexpected expenses in the past 12 months covered those costs with a credit card (41% percent); cash (37 percent); money that was earmarked for other household bills (24 percent); money from their emergency fund (23 percent); a payday, title or home equity loan that they specifically took out for this unexpected expense (16 percent); by selling something such as jewelry, electronics or a car (15 percent); by borrowing from friends or family (15 percent); or by borrowing from their retirement savings (12 percent).
"Not everyone has cash to cover unexpected expenses and sometimes all it takes is one financial situation disrupting the paycheck-to-paycheck cycle for a person to enter into an unending loop of trying to catch up," says Trey Loughran, Purchasing Power CEO. "In an increasingly fragile economic climate, employees are seeking options for meeting their short-term financial needs without compromising their long-term finances."
One way employers can help the situation is making sure employees are aware of voluntary benefits that are part of their overall employee benefits program. Voluntary benefits can prove to be smarter, more cost-effective alternatives for covering unexpected expenses.
Among the voluntary benefits that can help with unexpected expenses are:
- Employee purchase programs that allow workers to purchase consumer products and services through payroll deduction when they are unable or prefer not to use cash or credit. The program is an alternative to high interest credit cards and other sub-prime financing options for customers desiring to pay for a purchase over time.
- Low interest installment loans and credit that help employees avoid payday loans and cash advances from credit cards when they have emergency needs such as unexpected out-of-pocket medical expenses.
- Student loan repayment benefit programs in which employers are making contributions to loan balances or providing methods for employees to refinance their debt.
- Bill payment programs that empower employees with debt paydown strategies and the ability to make recurring bill payments on-time each month through payroll deduction.
"Voluntary benefits that address financial concerns are a continuing trend as more employers are realizing the impact money-related stress has on their workforce," says Loughran. "Unexpected expenses don't just impact an employee at home. They can lead to distraction and lower productivity in the workplace as well."
About Purchasing Power, LLC
For more information, visit http://www.Corp.PurchasingPower.com.
Survey Methodology
This survey was conducted online within the United States by Harris Poll on behalf of Purchasing Power from December 18-20, 2019, among 2,050 U.S. adults ages 18 and older, of which 807 are employed full-time. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].
Purchasing Power is a registered trademark of Purchasing Power, LLC.
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SOURCE Purchasing Power
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