Discover effective financial wellness strategies to help employees navigate the challenges of 'Januworry' and start the New Year with confidence. File photo.
As the festive season ends and the New Year begins, many employees find themselves in the financial gap known as "Januworry." The stretch between December's early pay cheque and January's final days, coupled with premium increases and back-to-school expenses, often leaves employees financially strained and resorting to borrowing.
Denise Neethling, head of marketing for South Africa's leading Earned Wage Access (EWA) provider, Paymenow, emphasises the critical role companies must play in helping employees navigate this challenge without accruing unnecessary debt.
"The increasing cost of living, combined with salaries that fail to keep pace with inflation, makes it challenging for many to meet basic household expenses when a pay cheque must last over 30 days," says Neethling. "Add festive spending on travel, gifts, and celebrations, and the financial strain becomes even greater."
A 2023 National Debt Review survey found that 40% of consumers used credit cards to fund their Christmas expenses. DebtBusters’ third-quarter 2024 Debt Index indicates that over the past eight years, income growth has lagged significantly behind rising costs. As a result, consumers increasingly rely on short-term unsecured credit and personal loans, allocating two-thirds of their take-home pay to debt repayments.
According to the National Treasury, 70% of South Africans overspend during this period, often buying things they don’t need, driven by societal pressure or the fear of missing out. "During this time, parents often feel compelled to spoil their families, with costs quickly mounting and leaving little to show for it in January," Neethling explains.
To support employees in managing their finances effectively and reduce "Januworry" stress, organisations can offer a variety of financial wellness programmes tailored to different needs and learning preferences. These can include:
1. Financial Literacy Workshops: Workshops that teach budgeting basics, teach employees how to create and maintain a budget, understand cash flow, and set financial goals. Workshops can cover short-term and long-term financial planning and understanding Credit and Debt Management
2. Personal Finance Coaching: Offer access to certified financial advisors who can provide personalised advice on savings, investment strategies, debt reduction, and retirement planning or provide access to online platforms where employees can receive tailored advice based on their financial situation.
3. Educational Resources: Webinars and Online Courses that employees have access to and can complete in their own time.
4. On-Site Financial Education Days: Most company’s host Wellness Day but these can be expended to include not only health but financial wellness where employees can engage with financial experts, attend mini-classes, and access informational booths.
5. Offering employees access to their already earned wages: This innovative financial technology allows employees to access their earned wages before their regular payday, addressing the common issue of cash shortages, By eliminating the stress of financial shortfalls, EWA helps prevent reliance on high-interest loans.
By integrating these types of financial wellness offerings, organisations can empower their employees with the knowledge and tools to manage their personal finances effectively. This proactive support not only benefits employees but also enhances overall workplace productivity and morale.
Neethling stresses the importance of incorporating basic financial education into company offerings: "Providing financial education not only benefits employees but also enhances organisational health. Employees burdened by debt often experience reduced productivity, absenteeism, and even resort to desperation-driven behaviours like theft."
Neethling adds, “As we move into Twenty-Twenty Thrive, businesses have the opportunity to champion financial wellness initiatives, equipping employees with the tools they need to tackle financial challenges and start the new year with confidence and stability. Investing in financial literacy helps create a healthier, more productive workplace for all."
PERSONAL FINANCE