Employers Provide Financial Benefits to Help Millennials Avoid Payday Loans
By Lindsay Frankel
Younger adults in the workforce have unique financial stresses, such as student loan debt, and employers are increasingly providing financial benefits that will help ease the financial burden.
According to a survey conducted by the American Institute of Certified Public Accountants, millennials still value health insurance and paid time off more than other benefits, but student loan forgiveness came in third. Almost two-thirds of recent graduates have student loan debt, and they’re carrying an average balance of more than $33,000. Among graduates with student loan debt, forgiveness programs were seen as the most important benefit. The opportunity for remote work and paid parental leave were also top benefit choices among millennials.
Young adults who are saddled with student loan debt and a lower starting income also have difficulty when facing a financial emergency. 78 percent of Americans are living paycheck to paycheck, leading many to borrow money when unexpected costs arise. Those with bad credit may turn to payday loans, which are short-term, high-interest loans intended to be paid back out of the borrower’s next paycheck. But this costly method of borrowing only exacerbates financial hardship. As an alternative, many employers are beginning to offer low-interest loans or advance access to wages to help millennials cope.
Due to a lack of robust financial education in the school system, employers are also offering young people financially literacy programs to improve their money management skills. These efforts help millennials establish and stick to a budget, understand interest rates and debt, and learn how to put money away for emergencies, among other important skills.
As employers attempt to attract and retain young workers, non-traditional financial benefits are becoming increasingly important. These benefits provide millennials with the resources to manage debt, save for retirement, and deal with unexpected expenses, which positively impacts their productivity in the workplace.