Employees Proactive, but Still Concerned: Financial Finesse

“No longer are employees relying on the market to give them strong returns,” Liz Davidson, CEO of Financial Finesse, said in a statement. “In a sense, they were burned by this way of thinking before—the market crashed and they lost huge portions of their savings.”

The European debt crisis, continued high levels of unemployment and rising health care costs are also weighing on employees’ minds, Davidson said, adding that even though some in the industry say we’re in a recovery, employees don’t feel it. “They’re still waiting for the other shoe to drop,” she said.

“I think it will take a while for employees to increase their confidence about retirement and investing. We’ll need to see a much stronger recovery, along with sustained market gains. Maybe most importantly, they’ll need to see their older coworkers being able to retire en masse, at a reasonable age.”

Financial Finesse found that while employees’ financial wellness is still higher than it was during the recession—honestly, how could it not be?—it has slipped recently in a few key areas. In the first quarter, two-thirds of employees said they had a handle on their cash flow so they spent less than they make every month, down from 73% last year. Fewer employees are paying off their credit card balances in full, and fewer have an emergency fund to turn to if they lose their jobs. Last year, 88% of employees said they pay their bills on time every month. That fell to 85% in the first quarter of 2012.