Workplace Financial Wellness: The Psychology of Employee Money Stress & Business ROI

Updated September 2026

Our money relationships are closely tied to our emotional responses, how we grew up, social norms and subsequent pressure, and what we deem essential to us. Once we understand these things, we can start having a better relationship with our money. Another way your psychology plays a part in your money begins with where you make it.

Have you noticed that you can be more productive when you feel fulfilled in your job and make a wage that you find rewarding? I know throughout my career, this has been the case. As those two things were more aligned, I found that I became better at making money decisions, which also showed how I navigated my career.

According to PwC's 2026 Employee Financial Wellness Study:

• 59% of employees report being stressed about their finances right now.
• Day-to-day strain (not just retirement planning) is the main drag: 53% have less than $5,000 in emergency savings, and 30% have less than $1,000.
• Retention & Younger Workers: 85% of Gen Z report financial stress harms their mental health, and 71% say it hurts productivity.
• Demand: Over 80% of younger employees actively use workplace financial wellness benefits when offered.

How The Brain Works

As an employer trying to combat this issue, you must understand psychology's role in the equation. Most of the workforce has not been educated on financial topics, and even if they were, it is typically very minimal. Instead of basing financial planning and decisions on knowledge, most people base it on personal experiences and life journeys. This could spell disaster.

Effect of Upbringing

Because everyone's life experiences are different, you have to be aware of the various traumas associated with money. An employee grew up in an environment where the parents or guardians were not good at managing money. They would spend money frivolously and not worry about cash flow. As a child, this employee saw this and thought that that pattern of behavior was acceptable and the norm. The employee follows the same pattern of behavior and now struggles with money. They may even be frivolous with company resources too.

Effect of Previous Experiences

Another employee saw that they had an issue with money, so they decided to reach out and get help. Unfortunately, the financial advisor or coach they chose to work with did not want to work with them due to a lack of resources or financial assets. The employee is even more ashamed of their financial situation and decides not to reach out for help again. So, their cycle of financial disarray continues.

Effect of the Economic Cycle

Let's take one more scenario. Looking at the financial crisis of 2008-2009, my generation (the millennials) watched our parents losing their jobs, assets declining, or ending up in bankruptcy or foreclosure. Now, with the onset of the Covid pandemic, we watched the same things happen to not only our parents but to us as well.

Bankruptcy & Resignations

More employees are considering filing bankruptcy now than ever before in the history of the PwC annual survey. This is traumatic and makes us more aware of our finances and company culture. The same PwC study found that 72% of people whose financial stress increased due to the pandemic would be attracted to another company that cares more about economic well-being than their current company. This can directly impact a company's bottom line.

Maslow's Hierarchy of Needs

In 1943, Abraham Maslow introduced the concept of a hierarchy of needs. It is crucial to understand how financial security fits into this concept. The hierarchy suggests that people are motivated to fill their basic needs before worrying about other needs to make a pyramid, as shown below.

Introduction

The first level is physiological needs. These needs are crucial to our survival, such as food, water, breathing, etc. The second level is security and safety needs. These would include health, wellness, and financial security. The pyramid continues up the chain until you reach the top, which is self-actualization. For this article, I want to focus on the first two levels.

Physiological Needs

Money plays a vital role in people reaching their basic physiological needs. If a person is trying to figure out how their family will eat that night, it would be impossible to show up fully at work and perform. Their mind would be on fulfilling their basic needs. Along with that same thought, this also clouds judgment. If food is needed and there is no money in the bank, they are more apt to use their credit cards or a payday loan. This could then trigger guilt and add more debt to the balance sheet, starting a cycle that is hard to get out of.

Safety Needs

Financial security is a vital part of the second level of the pyramid. It provides safety, control, and order in peoples' lives. Unfortunately, most people can't move to the following levels in the pyramid due to not having this aspect of their lives in order. The biggest issue is the knowledge gap. Most financial education is not presented in an easy way to understand or digest. In my human resources career, I have seen plenty of situations where the benefit provider comes in once or twice a year, and the employees leave with more questions than answers. This is no longer enough.

How This Affects Corporations

Companies may think that what goes on in their employees' personal lives is personal and doesn't affect business outcomes. But, this couldn't be further from the truth. All of that emotional and psychological financial baggage is bought into the workplace, and in ways you may not have considered. As a corporate financial consultant, these are just a few ways I have seen the business bottom line impacted.

Productivity

It is well-documented that financial wellness or lack thereof is a major contributing factor to low productivity. The PwC study found that out of the employees whose financial stress increased due to the pandemic, 45% said finances had been a distraction at work. In my HR career, I have witnessed the effects on productivity when employees are worried about their pay, taking extra time from work to handle financial matters, not being able to afford childcare, or having to work a second or third job to make ends meet.

Retention

The “Great Resignation” is alive and well! People had to miss a lot of work to care for dependents or sick loved ones. Hiring help is expensive and because most Americans don't even have enough saved to cover a $1,000 emergency, leaving work was a better option. 1 out of every four working Americans quit their jobs during the pandemic. This number is astounding! Unfortunately, this departure has disproportionally affected women and people of color, adversely affecting diversity and inclusion efforts.

Health Care Costs

Another issue that directly affects corporations is the potential of increasing health care costs. Let me explain. According to the study, 57% of employees whose financial stress increased during the pandemic said they avoided having a medical issue addressed due to cost. Employees must address health care issues early to prevent more significant, more expensive health issues.

The more employees spend on health care and using their benefits, the more everyone on the plan will have to pay. The employer subsidizes most health care plans, so it becomes a lose-lose situation for everyone involved. The employees' premiums will increase, and in return, the corporations' portion can increase as well.

In addition, money is a significant stressor. A study by the American Psychological Association found that money is the top cause of stress in America. In a 2015 study, they reported that 72% of Americans stressed about money at some point during the previous month. Stress leads to health issues.

How Can Corporations Better Support Their Employees?

Corporations can implement a few solutions to support and help their employees, especially in light of the pandemic. These benefits are crucial to the employee and help employers attract, hire, and retain quality employees. According to the study, 87% of employees want help with personal finance, so the demand is there.

Financial Counseling

One-third of employees rank a financial wellness benefit with access to unbiased coaches as the employer benefit they would most like to see added to their organization. Out of the 87% of employees that would like help with their finances, 51% want to make their own decisions but want someone else to validate those decisions.

If more employers offered one-on-one financial counseling as a benefit to employees, the counselor could alleviate much of this financial stress. Most people are ashamed or afraid to open up about their finances in a group setting, so having a one-on-one component would be the most impactful. Some EAPs (Employee Assistance Programs) offer this as a service but not all. Also, having someone that the employees can meet with in person or relate to them on an interpersonal is way more effective than hopping on a phone call with a stranger.

Use Technology

Courses have been extremely popular during the pandemic. People have enjoyed ingesting content at their own pace and implementing what they learned on their terms. Courses are also easily distributable to one or thousands of employees simultaneously.

One downside of courses is that they typically do not have a community-building component. To hedge against that, fun challenges and exclusive community groups are beneficial. A course that incorporates these features is imperative to foster a cohesive team and improve employee engagement. Corporate financial consultants can explain options and help you implement this.

Hire a Speaker

If the other two solutions are too cost-prohibitive for your organization, hiring a speaker is a simple, low-cost step. A speaker can teach financial literacy topics either as a one-time lunch and learn or multi-day seminars.

In my experience as a corporate financial consultant, these speaking engagements get the conversations started at the very least and sparks ideas that could be life-changing.

Frequently Asked Questions

Conclusion

It is essential now more than ever for corporations to start thinking about employees' holistic well-being. Strategies to recruit and retain talent should include a financial wellness component. This is top of mind for many employees, especially in light of the pandemic. Having the annual or bi-annual 401k spiel is no longer enough. Financially savvy employees make an organization more productive and improve the quality of life for everyone involved.

There are solutions out there. As a society, we have to do our part to make sure these solutions are available to everyone. Making it a work benefit is one step in the right direction. If you are unsure how to implement or want to brainstorm other solutions, hiring a corporate financial consultant can benefit your business for all of these reasons and more!