Americans' dismal savings rate is a perennially talked about topic, yet COVID pushed emergency savings to the fore, illustrating just how unprepared most workers are for a major (or even modest) expense or income interruption.
Fidelity Investments reported last week that a lack of emergency savings has now become a major source of stress for Americans, with 8 in 10 participants saying inflation and the cost-of-living are causing them stress, and half saying it is causing them to be distracted at work.
It added that emergency savings ranks as the number two savings goal among participants and is only beaten out by retirement.
“Today, most U.S. adults (57%) say they are currently unable to afford a $1,000 emergency expense,” the Boston-based investment behemoth noted. To help ease the burden that many employees are under, many employers are adding workplace emergency savings programs to their growing roster of financial wellness benefits. And with good reason, as research reveals that financial wellness results in a variety of improvements to employee well-being.
“Today’s economy has left many Americans living paycheck to paycheck, and the thought of setting aside money for the unexpected can feel daunting,” Kevin Barry, president of Fidelity Workplace Investing, added. “The good news is many employers are stepping up to support the financial wellness of their workforce with emergency savings benefits. This growing focus, coupled with recent legislation enabling employer involvement, is driving forward-thinking employers to help employees better prepare for those rainy days.”
It listed several prominent companies currently offering an emergency saving workplace benefit.
Whole Foods Market launched an emergency savings program in January 2024 to help its employees save for an unexpected expense. They will be able to set up an automatic deduction from their paycheck each pay period and access the funds when they need them most.
In September 2022, Starbucks launched My Starbucks Savings to help eligible partners save for the unexpected. Through the program, partners can contribute a portion of after-tax pay on a recurring basis directly from their paycheck to a personal savings account. As an incentive, Starbucks contributes $25 and $50 credits at certain milestones, up to a total of $250.
“We are continually looking for new and innovative benefit offerings for our team members,” Brian O’Connell, senior vice president of Team Member Services for Whole Foods Market, concluded. “We are excited to add Fidelity’s savings program to our suite of financial wellness benefits, creating an easy way for team members to save for unexpected expenses—one paycheck at a time.”
