In the iconic 1966 cartoon, How the Grinch Stole Christmas! the Grinch hates everything to do with the holiday season. He hates presents, trees, wreaths, ribbons, bows and even roast beast. He devises an ingenious, and infamous, plot to stop Christmas from coming to Whoville.
Imagine how he would react if he had to return gifts post-holiday. Imagine him standing in line and having to deal with stringent return policies. Imagine the noise, noise, noise if he didn’t have a receipt. You can practically hear Boris Karloff (for those of you too young to remember him think of a more classic Jim Carrey) sighing about the holiday persecution.
The good news – the Grinch isn’t likely to get many gifts (at least prior to his transformation) and can therefore avoid this whole messy process.
Many Americans are not as lucky. Returning gifts has become as much a holiday tradition as receiving them. While some may be duplicate gifts, more often than not they simply missed the mark on color, size or style. This causes unnecessary stress and can have financial implications.
This sentiment came through loud and clear in the fourth quarter 2012 Principal Financial Well-Being IndexSM. Some key findings from the survey:
- 42% of employees are stressed about the economy
- Nearly two-third view the current economy as unhealthy to some degree
- The economy is causing people to rethink their holiday spending
- 36% indicated that they will be spending less per gift
- 35% will be scaling back on the number of people they buy gifts for
- Just over half of respondents (52%) indicated that holiday spending will put a moderate amount of stress on their personal finances
The respondents also offered some insight into what they would be doing in 2013 to help reduce their financial stress. Many of their responses were expected and consistent with prior years including:
- Put a set amount of money into savings each month (29%)
- Pay off credit card debt (27%)
- Reduce spending by a set amount each month (21%)
- Stop using my credit cards (14%)
Unfortunately a couple of other responses were more tepid including to defer more into my defined contribution plan (10%) and work with a financial planner or other financial advisor (6%). Both of these actions can help put an employee on a path toward long term financial success.
This clearly indicates that there is a role for the employer in helping their employees achieve financial success. This role can include education about the importance of deferring into their retirement plan or providing access to a financial professional as part of their benefit program.
Longer-term employers should learn more about Employee Stock Ownership Plans and other benefit programs that can help employees achieve financial success.
You can view the full report at www.principal.com/wellbeing.
In addition to blogging here, I also tweet regularly about topics of interest to ESOPs. Click to follow me on Twitter- @jlripperger.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.