Monthly Review: Look out for interest rates!

The biggest news this month is that interest rates are increasing for the first time in nine years. You heard right, nine.

Here’s what happened

Over the past 9 years, the interest rate has been held at pretty much zero to promote economic recovery in the wake of the recession. On Wednesday, December 16, the Fed declared that it is finally raising its key interest rate by 0.25%—marking the first of what’s predicted to be a serious of gradual increases.

What it means for you

The interest rate being zero meant that the cost of borrowing money was also effectively zero. The interest rate rising is a sign of economic recovery, but has a lot of implications for Americans across the country.

  • Things are about to get more expensive—buying a car (if you’re taking out an auto loan), house (if you’re taking out a home loan), private student loans, and your credit card debt. However, these changes will not be immediate, so you don’t have to act right now. It’s a good thing to keep in mind though as you plan out big purchases for the year, though.
  • If you’re a good saver, you’re finally about to be rewarded. Over the past 9 years, there has been effectively no return from parking your money in a savings account, with the very low interest rates offered by banks. As banks charge more in interest to borrowers (as the big banks have already begun to do!), they will eventually pass some of those savings to savers (not yet, but stay tuned!)
  • This may also affect your investments (stocks, bonds, and even what’s in your 401k). It’s predicted that this may trigger volatility in the stock market. When the interest rates were essentially zero, more people put money in the stock market, because that was the only place they could see a measurable return (since returns on savings were practically negligible). Now, that’s about to change.
  • If you’re planning on traveling, you may get more bang for your buck. The dollar is expected to get stronger, which is great for that vacation to the south of Spain you may have planned. Unfortunately, not so great for large American companies like Apple or Nike, which sell their products abroad.

What can you do about it

  • Don’t fret. Though rates are set to increase, the increase will be gradual. Experts estimate that there will be relatively little impact on consumers for 2016. So breathe. You have time to figure it all out.
  • That being said… if you’re looking to refinance, now might be a good time—a typical 30 year fixed rate mortgage is 3.9% right now, but historically, they’ve been twice as high. It might be a good idea to lock into a lower fixed rate now.
  • Start trying to pay off high interest rate debt (always a good idea) or transfer your balances to a 0% credit card. On the saving side of things, you could start shopping around for higher rates on interest-bearing accounts to try to reap the rewards of being a good saver.

Interested in reading more about the interest rate hike?

Check out these articles for more information

Questions? Let me know in the comments or tweet at @getgreenshield.

What are employers doing to help their employees with financial wellness?

In our last post, we asked people what financial wellness meant to them—this time, we asked what they saw employers currently doing to help employees with their finances and what they thought employers could improve on—here’s what they said:

1) “Companies could improve on the matching of 401(k) plans. I’d also like to see companies give unlimited paid time off– employees could handle some of their financial obligations in that time. Companies could also train employees in how to handle their finances/provide direction to a service.” —Carl at NextSpace

2) “I don’t know what employers are doing to support their employees’ financial wellness.”— Trevor at GearFrontier

3) “Most companies that I deal with are really early stage, and not worried about helping their employees with financial wellness. I would say that just educating employees on all available options and making sure they’re optimizing is the most important part. Employers should make sure they’re putting their employees into the best 401ks possible with the lowest fees and educate their employees on the difference between things like mutual and index funds.” —Kris at Amplify

4) “I think employers help employees by setting up automatic payroll (direct deposit), retirement accounts (401ks, IRAs), and making sure their employees are taken care of in terms of insurance and liability. It would be nicer if employers could walk employees through on a personal level that teaches you what to be looking for when setting up retirement accounts—if you’re doing it for the first time, you have no clue what to do.” —Eric at Amplify

5) “Companies should put more emphasis on educating their employees via in-house workshops/seminars focusing on Financial Health/Well Being tackling topics such as money market accounts, IRA, 401K, etc.  Most people are in the “dark” regarding this subject matter.” —Mani at Machinima

7) “Companies provide retirement plans, match and sponsor 401ks and offer health insurance to their employees. I think companies could bring on expertise, and provide basic training for employees informing them of better options. Employees often do things that don’t necessarily mean that they’re going to get a return financially and are just unaware of it.” — Jacobo at Yoi
8) “Work should be a place of family and sense of belonging – it is in our human nature. The best companies are those that have achieved a culture of belonging and sense of caring from management that supports employees on every level—including financial.”—Patrick at Cogostar

What does financial wellness mean to you?

In our last post, we promised to share the responses of the people we surveyed about financial wellness—here’s what they said about what financial wellness means to them:

1) “Not having to be concerned with the most basic needs of living” — Pat at Clutter

2) “Being able to do the things I want to do comfortably and having an understanding of my finances. It’s not only being able to do well, but understanding where I stand with my finances.” – Matt at AlphaDraft

3) “Having control over one’s finances.”— Carl at NextSpace

4) “Job security maybe, comfort, being able to raise your family, being able to buy a house, stuff like being able to send your kids to college and go on vacations with them. Life where you can do the things that you’d want to do with less stress would probably be the best definition of financial wellness.” — Uzi at GearFrontier

5) “Being mindful of your finances and feeling comfortable with the decisions you make regarding spending money.” — Trevor at Gear Frontier

6) “Having all of my finances in order—it means I have a well diversified investment portfolio, no credit card debt, and I have enough cash in the bank to cover all of my expenses.” — Kris at Amplify

7) “Being financially secure, so I’m not worried that I can’t pay my debt obligations (mortgage, rent, etc.). It also means having good credit.”—Eric at Amplify

8) “Having your ducks in a row—having a road map. A budget of what you can spend, and a little more padding on top of that just in case. It’s being aware of your options and having a plan. “—Chris at Little Labs

9) “Making enough money to support my day to day needs (and desires if possible) while also saving for retirement.” —Cindy at Clarity Campaign Labs

10) “Having a considerable amount of money in reserve to sustain you for a ‘rainy day’ and understanding the opportunity cost associated with allocation of dollars. It means being in tune with your financial advisor to ensure your money accounts are placed most effectively to help achieve your financial goals.” — Mani at Machinima: Machinima

11) “Not having to worry about money.” — Jacobo at Yoi

12) “The ability to achieve certain key social metrics while indefinitely sustaining economic priorities and goals.” — Patrick at Cogostar

So what IS “financial wellness,” anyway?

When I tell people I work for a financial wellness company, I often get met with blank stares. Although I get the sense that people are becoming more familiar with “financial wellness” as a concept, I know that it’s still far from a household term.

I was curious how people would react if I asked them directly what financial wellness meant to them—so I set out to find out.

I went around and asked a dozen friends for their take on financial wellness.

Here are the top takeaways:

1) Security, comfort and understanding.

For the most part, it came down to being able to fulfill their desires and goals without having to worry about money being an issue.

“Financial wellness is not having to be concerned with the most basic needs of living” – Pat at Clutter

2) A desire to understand their financial situation and options

In addition to not worrying, some people also indicated that they wanted to have an understanding of their financial situation and options. Though many people I talked to spoke very generally, others noted specifics—such as having a good credit score, being able to pay down debt, having diversified investments, and setting goals such as paying for their kids’ education. Some people focused more on the immediate needs, while others also took a more long-term view and discussed being able to save for retirement.

“Understanding where I stand with my finances.” —Matt at AlphaDraft

“Stuff like being able to send your kids to college and go on vacations with them”—Uzi at GearFrontier

3) What employers are doing to help

In regards to what employers do to support their employees’ financial wellness, the most common thing that people talked about was providing 401ks/other retirement plans (plus matching). Others also noted giving unlimited PTO, incentives/bonuses, sufficient compensation, health insurance, and direct deposit. The non-401k responses went back to this idea of not having to worry/having peace of mind— basically making finances as easy and painless as possible.

“Companies provide retirement plans, match and sponsor 401ks and offer health insurance to their employees.”—Jacobo at Yoi Corp

““I think employers help employees by setting up automatic payroll (direct deposit), retirement accounts (401ks, IRAs), and making sure their employees are taken care of in terms of insurance and liability. “ —Eric at Amplify

4) What employers can improve on

A central theme here was financial education—helping employees understand not just how to manage their finances, but also understanding their options fully and making sure they are empowered to select the best option for them. The prevailing belief was that there is a severe lack of available resources for this and that most employees are “in the dark” about managing their finances.

“Employers should make sure they’re putting their employees into the best 401ks possible with the lowest fees and educate their employees on the difference between things like mutual and index funds.”—Kris at Amplify

“Companies should put more emphasis on educating their employees via in-house workshops/seminars focusing on financial health/well being tackling topics such as money market accounts, IRA, 401K, etc.” —Mani at Machinima

We at GreenShield would like to extend a big thank you to those who participated in our informal study!  In our next posts, we’ll share their full responses.

GreenShield: Creating A Better Financial Future

Announcing GreenShield


In the past several years, there has been a ton of innovation surrounding consumer finance. Now, more than ever, there are resources that make it easier for us all to connect with others in the pursuit of mutually beneficial financial goals. What’s missing, however, is the ability to include our largest stakeholder – our employers.

GreenShield is here to change that. Our mission is to make it easy for employers to help employees pay off their existing debt and begin saving for the future.

We fill the gap between health insurance and a retirement plan—these address your immediate health needs and long-term financial needs, but don’t provide for your short-term financial needs. We make it easy for employers to help their employees repay existing debt, save for an emergency and achieve their pre-retirement financial goals (like buying a house). We call this financial wellness.

Why financial wellness?

Employees are struggling with their finances.  70% are living paycheck to paycheck.  30 to 50% have a revolving credit card balance of almost $10k.  47% of millennials spend more than half their paycheck servicing debt.  All of this creates a lot of stress—and that stress impacts their work.  When employees are distracted and stressed, their productivity decreases—an average of $400/employee/year.

When this challenge is addressed, both employers and employees win – employees that are less stressed are happier and more productive, which translates to gains in the workplace. As a company, we at GreenShield are committed to helping our peers succeed in reaching their goals by tackling this very issue.

What can we do?

Providing financial assistance to employees has always been done in some capacity by forward-thinking employers – it just hasn’t always been easy and it certainly hasn’t always been anonymous or simple. Some examples that readily come to mind: payroll advances, 401(k) loans, educational assistance programs.

GreenShield is focused on making it easier for employers to expand their existing programs while changing employee behavior. Education isn’t enough. Most people know they should spend less and save more—that’s a no brainer. Rather than simply repackaging a consumer facing product to become enterprise-facing, our platform instead allows employers to support employees in changing their behaviors and taking charge of their futures.

What about the economics?

There are many direct-to-consumer financial businesses doing great things. There are also many direct-to-consumer financial businesses that only give employees half the truth. It’s not that they’re doing bad things; it’s just that their business model necessitates pointing consumers to certain partners that have the ability to compensate them. The challenge for consumers – and in our case, the employees – is knowing which companies are trustworthy.

GreenShield’s model is different. Instead, we partner with employers. In doing so, we’re able to offer employees access to unbiased financial advice, always steering them to the best resources available to them. For example, this might include an employee’s local credit union, rather than a higher cost alternative lender. It’s been found that employers save $3 for every $1 invested in a financial wellness program. The takeaway: everyone wins.

Why now?

In recent years, we’ve seen the growth of health and wellness programs by leading employers. We’ve seen companies invest in healthcare transparency programs. And we’ve seen the continued success of Employee Assistance Programs. Now that employees are eating healthier, exercising more often and visiting the right medical professionals, it’s become clear that reducing employees’ financial stress is the next frontier in employee benefits.

More than 90% of large employers say they want to introduce or expand their financial wellness programs this year.  GreenShield is here to help.

Are you interested? Get started here.