The Danger Of Employees Asking Employers For Emergency Savings
Is it a problem that employees want their employers to provide them with emergency savings? Here is the danger of employees wanting emergency savings as a job benefit.
Employees are now asking their employers to provide them with emergency savings as a benefit. Asking for this shows that many people do not practice self-responsibility and do not save money in an emergency fund. Here are fundamental ways practicing self-responsibility can help you start building an emergency fund.
Why Are Employees Asking For Emergency Savings Accounts?
CNBC reports that workers are now asking for emergency savings accounts as a job benefit from their employer. Employees say that traditional retirement plans are no longer good enough. The Bipartisan Policy Center found that “42% of Americans want to be automatically enrolled in such plans.”
Employees are asking for emergency savings accounts. They are experiencing difficult times due to inflation and rising living costs. The problem is that many Americans do not have much money saved in an emergency fund. Employees asking their employers to provide them with an emergency savings account, an emergency fund, is a further sign of the sad state of self-responsibility and personal finance.
Rather than taking the time to create and follow a budget, automate money to go into a savings account each month, and place a portion of their money into a high-interest savings account, employees are outsourcing to their employers. Employees can choose how much of their paycheck can go into their checking and savings accounts.
Lack Of Self-Responsibility
It is a continual lack of self-responsibility. People do not want to be responsible for saving money and building their own emergency fund. Employees now want their employers to do it for them.
The problem is that employers may agree to it, but it won’t solve the problem. People may just move the money from their employers’ emergency savings account to their checking account. People will then blame their employers for their lack of savings instead of learning to build an emergency fund.
Lack Of Understanding Of Personal Finance
Rather than spending the time to do basic steps to build their own emergency fund, employees want their employers to solve their financial problems. The issue is that an employer and a business operate differently from how most people treat their financial lives.
A well-run business looks at numbers and figures out what excess can be cut back. A business is also looking for new ways to build cash flow.
Employees usually only have one income stream—their paychecks. Most people do not review their personal balance sheets every month or year. They then wonder why they have a negative or barely a positive net worth.
Solutions
Getting Starting Setting Up An Emergency Savings Account
If you are in a similar situation and need to start building an emergency fund, here are some steps to get you started. First, figure out what your baseline budget is each month. That is how much it costs to live each month without anything special (housing, utilities, transportation taxes, groceries, and health insurance).
Second, once you have the monthly number and if you have money left over from your paycheck, automate the rest into your savings account. This will help you to build up your savings accounts.
Third, find a high-interest savings or money market account. From your savings account, transfer money, manually or automatically, at the end of each month to build up an emergency fund in a high-interest account. This way, the money you plan to use will earn high interest and compounding to help you for an emergency when an emergency does happen.
Side note: if there is already enough money in your regular savings account and you just want to build your emergency fund, skip step two and have your employer send your paycheck to your high-interest savings account.
Practice Self-Responsibility
Start to take back your life by practicing self-responsibility. The start of financial responsibility is to follow a budget and to live below your means. Living below your means allows you to have money left to save at the end of the month. You can then work to build an emergency fund.
Over a period of time, you may have enough money saved that you could decide to invest it into an asset. The asset could be a business, real estate, land, or in the stock market. Everyone must first learn the basics before proceeding to more advanced financial strategies.
It is the basic financial education that these employees’ should learn instead of expecting their employers to provide them with yet another benefit. Nothing is free. It will likely come out of the employees’ paychecks in some way.
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Summary
The fact that employees now want their employers to provide them with an emergency savings account is yet another sign of the lack of self-responsibility and financial literacy among many people. The good news is that you can be ahead of most people by learning and following simple financial principles. Add in self-responsibility, self-education, and critical thinking skills, and you can take control of your life and begin to reach your goals.
Become A Secure Single.
Thank you for sharing!