The Journey From Financial Fragility to Financial Security: One Person’s Amazing Transformation

By Lori Lucas, CFA, President and CEO, Employee Benefit Research Institute

In this inaugural blog of the American Savings Education Council (ASEC), I want to highlight the importance of ASEC’s work — and the true potential impact of helping people gain financial stability — by featuring how one workplace savings program changed an individual’s entire life.   

About ASEC
For those who are unfamiliar with ASEC, we grew out of discussions between representatives of the U.S. Department of Labor and the Employee Benefit Research Institute in late 1994, as the agency prepared to launch its unique Retirement Savings Education Campaign with the U.S. Department of the Treasury and 65 public and private organizations. Today, ASEC holds regular convenings to explore the obstacles to Americans’ achieving financial security through saving, as well as successful efforts to help them overcome these obstacles. Last year, we paid particular attention to the challenges that women face in creating retirement saving. One staggering statistic on this — according to the Retirement Confidence Survey — is that more than one-third of divorced women workers have less than $1,000 in savings and investments. That’s double the number of all workers in this precarious financial position. Divorced women workers are also significantly less likely to find workplace educational or financial well-being programs helpful in preparing or saving for retirement. This mission of ASEC is to find ways to make such programs more helpful and to reduce the savings gap of such individuals and all workers in the United States.

“I don’t know if employers realize the true depth and impact that an EAP program [sic] can have on their employees’ lives,” E started out. “I mean, in theory it sounds great. And I’m sure that the numbers reflect some impact. But we are actual people with actual lives. . . . My trajectory of my whole life was forever altered by a free resource from my employer. Not only that, my overall health and overall wellbeing has increased tremendously. . .”

E made it clear that her situation was shocking to her and highly emotional. This was another important aspect of E’s story that the numbers can never reflect: the psychic damage that being in dire financial straits causes, and the challenges associated with just wrapping one’s arms around one’s own situation.

“So I remember starting with the firm and I was literally separating from my husband at the time,” E says. “I did not manage my own finances. My husband managed everything. And when I moved from a three-bedroom duplex to a room in a friend’s home, I had nothing with me except I think a desk and a couple of things in storage. So as you can kind of imagine, I was kind of going through life in a daze. And I couldn’t believe that I was that woman that let her husband manage all of the money, and I was going through a divorce, and I was lost, scared, insecure. . . and the truth is I made good money.  I was educated, I had a great job and career.  But I never really managed my own money. But the kicker was that I actually made more money than he did. But after the divorce that happened in 2017, I incurred some debt.”

It’s important to note that many times throughout her testimonial, E noted how important it was that that her financial help resource was free. “When life is overwhelming or a crisis is in process, I usually tell people, as I’ve navigated some of this, to pick one area and limit that area. . . So I looked at what resources do I have? What do I have? Nothing. I live in a room at a friend’s house. But I have a job. So I chose the area of finances because I had that free resource available to me. .  . I sought out .  . .the free financial services company that my company provided for me.”

It was clear that finding one ray of hope when it came to her situation was a major catalyst for E’s overall transformation: “Now I was excited because I had somebody to navigate this financial world with me. And to this day I remember that first phone call. I remember calling Pete and I straight up said, I’m embarrassed, I’m ashamed, and I’m super behind. My finances are a total mess. And I have no idea what I’m doing. . . And this was challenging.  Walking zombie. All these emotions flying when you go through a crisis. It’s a lot. He was so gracious with me and he helped me deal with my numbers.”

The other aspect of E’s story that really stood out was how important it was for her to be treated with dignity. She was already ashamed of her situation and needed to be assured that she wasn’t being judged. “And he never made my numbers mean anything about who I was as a person. He held my space so I could authentically look at where I was financially. And then he said, that’s okay, we all have to start somewhere. So he never judged me and all of that is great.”

The fact that the service came through her employer not only meant that it was free but that it was trustworthy — another essential part of E’s story. “But I was so blown away that [my financial coach] wasn’t trying to make money off of me. There were all these financial services that were like. . .they sell you insurance and annuities. I don’t even know. It was just like, here I am, raw and vulnerable. . . and he was great. . . Once we kind of got a structure in place and we identified what was so with my number, what my debts were, what my goals were — I didn’t really have goals in the beginning because I was like just trying to survive. It was just nice to have somebody available.”

E was clearly willing to put in the time because she saw a path to success: Being willing to put in the work is highly associated with understanding that there can be a payoff in the end that makes it worth the effort. “[The financial coach] helped me shift my context from being hopelessness to being one of hopeful and optimistic. So through talking with him I knew I had a pathway.  And that it would take time, but at least I had some expert help. So over the years he’s helped me navigate the ups and downs. And he keeps holding space for me through the divorce, through the crisis now — like this pandemic. . . There’s real world concerns out there like, am I going to have a job? I don’t know?  What does this look like?  It’s a lot. . . Not only did he help me feel optimistic again. . .but he helped me with real tactical things, like a debt blaster — like you put your numbers in there — and a retirement calculator — how behind was I? Like, am I going to be able to catch up? What do I need to do?”

Even though E’s journey has been a long one, it’s not only given her confidence in her financial wellbeing but also translated into improving other areas of her life as well. “In November 2018, I started tracking my net worth, and I started off with a negative $65,000, and now I’m at negative $12,000. And this was huge thing. . . I have a ways to go, but I know with my team that I can accomplish anything I set for myself.”

Specifically, E explained that the toll her situation had taken on her overall well-being and how she was able to turn the rest of her life around: “While my divorce compelled me to seek help through the resources from my company, when you are lost, confused, and distraught, let’s just say that your overall wellbeing diminishes. . . This was just way more than just financial help. It extends to all areas of your life. Wellness is so key. And by setting up a foundation in my finances, I was able to then translate it into other areas of my life.”

E then shared a picture of herself before and after her financial transformation in which she’d lost eighty pounds over a two-year period.  “I look at this and it’s sometimes hard to believe just the degree of difference that just one area of well-being is able to translate into all areas of well-being. . . I am clearly a different person.”

Again, numbers — while always useful in quantifying what works and what doesn’t — cannot demonstrate how materially a journey from financial fragility to financial security can impact individuals’ lives.

E concluded: “I wanted to leave you with the real transformation. . . I’m very proud. I think I’ve had some wild success in navigating my finances, and some wild success in navigating my health and well-being. But the real transformation is, I would say, to thine own self be true. I, after dealing with some of those areas, can now find my own voice. As an assistant I always put my bosses first. When I was married, I put my husband first, and it was all about his voice and my boss’s voice. And so now, for the first time, I am starting to live in my own truth, and honoring my own voice. . . There is amazinigness to be [sic] able to have a career you love and to accomplish tremendous goals and to navigate crisis and come out the other end. But there’s another thing to find your power and your voice.”

The purpose of this blog series is to provide a forum for American Savings Education Council partners to highlight their efforts in helping people like E essentially not only transform their financial lives but find their voice as well.