Did you know that it takes 40 years to pay off a credit card debt of $5000 if you pay only the minimum payment on an account with 17% interest? I didn’t and most people don’t. Few of us realize the impact of using the credit we’ve so freely been given by the credit card companies. Many working individuals, if they budget at all, base their financial plan on what their monthly bill obligation will be rather than their total debt load. Credit cards are easy to get, companies raise the credit limit at will and with low monthly payments and longer term loans for cars and mortgages, a family can easily dig a deep hole.
January is a time when we see many employees stressed because they overspent during the holiday season, and the reality of their debt situation is now clear and frightening. Problems related to financial difficulties account for 25% of the calls we get at the EAP and, when we dig deeper into other problems such as relationship conflict, we often find debt problems there too.
As with most personal difficulties, financial stress shows up in the workplace in several ways and the HR Director should be ready with resources and advice as well as clear understanding of company policy. Employees may find their way to your offices with troubling stories and a dire need for cash.
Employees with debt problems may ask for advances on pay or loans from the company. Very often employees will ask coworkers for small loans, for lunch money or money for their childcare. Pilfering materials from the office for kids who need school supplies is another way strapped employees sometimes try solve financial stress. In the most desperate cases there is theft and fraud. Even if an employee is not asking for money or help, he or she may be getting calls at work from creditors. This kind of distraction is difficult to ignore.
DebtAdvice.org is a great comprehensive resource for anyone who needs to understand more about how to manage money. There is education as well as support available for the struggling individual.
There seems to be loads of tips for managing spending on the web. I found Ten Resolutions to Trim Spending and Reduce Financial Stress offered by a credit union that is practical and sound advice.
In the next few days, I’ll continue to research resources and post again with links for you and your employees.
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