Imagine leaving money on the table – frustrating thought, isn’t it? Even more so when it comes your finances. Let’s talk about a growing trend that’s catching the attention of corporate giants like Amazon, Delta Airlines, and Levi Strauss: employer-matching emergency savings accounts (ESAs) with automatic enrollment. Yes, it appears these accounts are proving beneficial for both the employers and the employees.
Wait, Are Employees Really Getting “Addicted” to Saving?
Indeed, they are! At least that’s what Suze Orman, financial advisor-turned founder of Suze Orman Worldwide Enterprises, and Devin Miller, CEO at SecureSave, believe. In fact, SecureSave, the leading workplace emergency savings account program, is creating habitual savers. “Contributing to an ESA is ‘changing [their] psychological and financial habits,'” says Orman.
Suze Orman is not only the co-founder of SecureSave but she also readily promotes the importance of ESAs to employers. She conducts webinars for firms, guiding them to understand the efficacy of ESAs in enhancing employee retention and productivity. Orman’s mission is rooted in her belief: “smart people don’t pass up free money.”
- Humana, a health insurance company, can affirm Orman’s belief. Being SecureSave’s biggest client, Humana reports that a whopping 71% of their employees are enrolled in the program.
- Impressively, HSA Bank, a part of Webster Bank, has plans to incorporate SecureSave’s program to offer ESA solutions to its clients.
The bottom line here is simple: well-off employees benefit from ESAs just as much as their less affluent counterparts. Let me explain why.
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Why Employer-Matching ESAs Should Be a No-Brainer
Suze Orman encapsulates the idea with her powerful argument: “Even if they don’t need the money, smart people don’t pass up free money.” Here’s some food for thought: why are these same people diligent about contributing to their retirement accounts, mostly to avail of the matching sums offered by their employers?
To put it simply, they understand the magic of compound interest and they’re taking advantage of it. Remember, as Warren Buffett once said, “Do not save what is left after spending. But, spend what is left after saving.” This is a powerful investment strategy that will take you on the path to wealth accumulation.
Moreover, also consider this alarming fact: one out of every 12 financial advisors have been involved in legal disputes or have had client complaints. Now, armed with this knowledge, wouldn’t you want to take charge of your financial decisions?
Luckily, you can indeed call the shots while staying informed. Websites like FINRA BrokerCheck share details about every financial advisor, including their certifications, disciplinary actions, and complaints.
The Curious Case of Inflation: A Perspective
SecureSave has found that inflation is now the chief reason for withdrawals from ESAs, despite decreasing inflation rates. However, the interesting part? Devin Miller notes that 99% of the time when people withdraw money, “they keep the connection with payroll going,” thereby continuing to fund their ESAs and cultivate an assured safety net.
Suze Orman accentuates this behavioral pattern, stating, “They continue to contribute monthly to their account, knowing that it will be there if they need it.”
I firmly believe that ESAs, especially those offering an employer-match and enabling automatic enrolment, are a stellar step towards attaining financial security. Let’s aim to be amongst those “getting addicted to saving” and place ourselves on the surefire path to robust financial health.
