Tackling Money Issues: Why Financial Wellness Matters

February 27, 2020 Updated: March 13, 2020
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Money. It’s an aspect of life everyone must manage. For many, the stresses that come along with personal finances affect their relationships, their health, and their overall well-being.

I spoke to Brian Hamilton, the vice president of SmartDollar, a new program for employers being offered by Ramsey Solutions. SmartDollar aims to offer a way for employers to help their employees tackle their money issues.

brian hamilton
Brian Hamilton, vice president of SmartDollar. (Courtesy of Ramsey Solutions)

The Epoch Times: In a thriving economy, a majority of Americans are still living paycheck to paycheck. Why do you think that is?

Brian Hamilton: It’s not just a majority. It’s 78 percent of Americans that are living paycheck to paycheck, no matter their pay grade. There are people making six figures who have never even had $1,000 saved before. You can make pretty good money like that and never get ahead because of bad money behaviors. When you live like that, simple inconveniences become emergencies.

The Federal Reserve found that 39 percent of Americans can’t even cover a $400 emergency. So, what do they do? They go into debt for something that they should’ve had the cash saved up to cover.

All of this points to poor financial behavior. Most people know what to do with their money; they just have a hard time doing it. It creates a cycle where they’re always relying on debt in the form of credit cards, loans, and payday advances, which puts them at all kinds of risk. At SmartDollar, we believe it doesn’t have to be this way. That vicious cycle of bad money habits can be fixed—but you’ve got to take control. It’s not about head knowledge, it’s about behavior change.

The Epoch Times: How do financial struggles affect one’s well-being?

Mr. Hamilton: Money is one of the most common causes of stress in America, with 60 percent of Americans stressing about it every day and night. People are literally losing sleep over it. And that’s just the beginning. Money stress is making people physically and mentally sick—it’s affecting how they use their health care and making them miss work. It hurts relationships and marriages, too. Money fights are the No. 2 cause of divorce in America. And when it comes to their jobs, they bring that stress to work with them, making them less productive, more distracted, and causes them to miss work more often. That costs businesses money in lost productivity and turnover.

The Epoch Times: What inspired Ramsey Solutions to offer its new SmartDollar program as an employee benefit?

Mr. Hamilton: For three decades, our CEO, Dave Ramsey, has been teaching people how to budget their money and get out of debt so they can live and give like no one else. We’ve offered that message through financial wellness education to businesses for almost 20 years.

But in those two decades of experience, we learned that there’s a stigma around talking about money at work. There was also the problem that a physical class at work limited our ability to reach as many lives as possible. So, in 2015, we developed and launched the digital version of that product that allowed us to scale to the needs of thousands of businesses and millions of employees.

Businesses needed a financial wellness benefit that actually worked and could show them the return for the company. Employees needed the privacy and ability to access it from anywhere. Our product meets the needs of both. Today, SmartDollar is in thousands of companies, changing the lives of millions of employees across the country. But our work isn’t done.

The Epoch Times: What incentives do employers have to offer such a program to their employees?

Mr. Hamilton: Look, financial wellness benefits are the hot trend in the benefits space right now. But almost none of them focus on the right things. A lot of them actually hurt employees with things like dangerous payday advances and student loan refinancing built-in. Debt is not the answer; kicking the can down the road is not the answer. These “benefits” don’t lead to life change. And if it doesn’t teach your employees to change how they handle their money; it’s not helping them.

I mentioned how employees are stressing about money and how it impacts their health. For the business, you have to look at ROI through the lens of engagement. What is engagement? It’s when your employees watch the videos, complete the quizzes, update their wellness scores, get into a rhythm with their budgets, and it actually changes their lives. SmartDollar users see an average financial turnaround of more than $16,000 in the first year alone. No other benefit in the industry can touch that. If you’re a business, the incentive is that your employees show up to work without their money stress, are more focused, and are more productive as a result. Plus, employees who are secure in their finances show lower turnover rates and miss work less often. That saves your company money. That helps your bottom line.

The Epoch Times: What strategies does the SmartDollar recommend to find one’s way to financial health?

Mr. Hamilton: Financial wellness isn’t a math problem—it’s a heart problem. To have it, you need to change your behaviors around money. You have to say, “Enough is enough,” and commit to changing. You have to want it. You wouldn’t expect to get in shape after going to the gym just once, would you? It’s the same with financial wellness.

SmartDollar doesn’t just treat the symptoms of poor financial behaviors, it attacks the root cause of them. We do this by giving employees a clear plan that’s easy to understand. We don’t do high-brow financial language that nobody understands. We have the top names in money guiding them throughout their journey, as well as all the tools they need to help them put what they’ve learned into action.

We’ve found that when employees focus on one goal at a time, putting one foot in front of the other, they build momentum to work the plan, and the result is a lasting life change. We’re not exaggerating. People are changing their family trees. People are finding hope, sometimes for the first time in their lives.

The Epoch Times: For the person reading this article and in poor financial health, what first step would you recommend they take to begin to make improvements?

Mr. Hamilton: Following Dave Ramsey’s 7 Baby Steps is the only concrete way you can move the needle with your finances. They are the foundation of SmartDollar and the journey all our users are on to finding financial wellness. If you want to get out of debt, build wealth, or live and give like no one else, you need to start your journey on the Baby Steps. Right now. It doesn’t matter whether you’re just starting out or about to retire. Anyone can work the plan.

  1.   Save $1,000 as a starter emergency fund.
  2.   Pay off all debt with the Debt Snowball.
  3.   Save 3-6 months of expenses in a fully funded emergency fund.
  4.   Invest 15 percent of your income for retirement.
  5.   Save for your children’s college.
  6.   Pay off your home early.
  7.   Build wealth and give.

It doesn’t matter what you make, what your current money situation is, or how old you are. It’s never too late to start. You can do this!

Follow Barbara on Twitter: @barbaradanza