Tell us about yourself and how you got to where you are.
I became a single mom during the financial crisis of 2008. The impending divorce left me with two babies in diapers, a house $100,000 under water, $80,000 in high-interest credit card debt, $50,000 in student loan debt, $15,000 in high-interest personal loans to pay my lawyer, a broken refrigerator, a busted furnace, and a completely drained 401(k).
I was buying gift cards on my 26% department store credit cards and returning them for cash so I could buy groceries for my kids, or pay for school field trips. No one knew I was broke—especially not my employer.
Despite what the above balance sheet looked like, I was not financially irresponsible; I was desperate. I was in a temporary financial crisis I never could have foreseen, which most people do find themselves in at some point in their careers. My employer certainly considered me a “well-compensated employee.” My colleagues were buying expensive watches and second homes on the same income. Meanwhile, I was walking into grocery stores a few towns away so I wouldn’t be recognized, with $12.59 in change I had scrounged from under my couch cushions and trying to figure out how I was going to feed my toddlers until my next payday.
Getting out of this financial situation was not a matter of simply “tightening my belt.” The market tanked, so I couldn’t sell my house. I didn’t understand foreclosure laws. I had no access to credit because my score had tanked, and my cards were all maxed out. I had half the income and all the bills; I could either pay my mortgage or my daycare, but not both. My cell phone or my internet. It was single mother math stuff they do not teach you in college.
I had so much shame about my financial situation that I waited until my heat was turned off in February 2008 to go ask my parents for the money. It took me three days to get up the guts to tell them I was broke and needed $300. I was mortified and weeping as my mom handed me the check. “Why didn’t you ask us this before?” they asked.
Today I have paid my parents back every dime I borrowed from them, along with every bill I owed. I am saving more than 40% of everything I earn. I calculate my net worth, to the penny, every day. (Weird, I know, but it makes me feel safe.) And you best believe those babies, who are now teenagers, are financially literate.
My greatest lesson from that experience was things are not what they seem. You never know what someone’s actual financial situation is, and the shame attached to it leads most people into a worse situation. If my employer had been in a position to help me while maintaining my privacy and dignity, that would have made a huge impact on the lives of my little family. That’s why I do what I do. I do it for Shannon Lane 2008.
Tell us what Salary Finance does.
We take people who are in the deep end of the pool, who are financially drowning, bring them to the shallow end and teach them how to swim. We do this by providing holistic financial well-being as a voluntary benefit at no charge to the employer. The platform offers financial well-being education and tools, along with incentivized savings accounts and personal loans with interest rates as low as 7.9%.
Tell us how your service addresses the pain points of your customers.
Forty-two percent of people don’t have a savings buffer of at least $1,000. This leaves them vulnerable to income disruptions and unexpected expenses. This issue is even more pronounced among already underserved and vulnerable populations. When employees are able to start a savings habit straight from their paycheck, they’re more likely to continue to build that savings buffer over time.
Most people would be surprised to know that my company ...
provides our financial well-being solutions to employers at no cost to them. We’re a business driven by a social purpose and as such, we believe in keeping the barrier to entry as low as possible when it comes to helping employers offer these solutions to employees.
What are the most exciting things happening in your segment of the industry right now?
The personalization of benefits: Prior to 2022, progressive People and Benefits leaders and their brokers or consultants were starting to expand voluntary benefit strategies to include benefits like pet insurance, fertility assistance, and mental health apps. These benefits were affinity-based, allowing employees to protect or support different facets of their identities and their lives outside of work, beyond the basic health insurance plan or 401(k). And from the employer’s perspective, offering access to these benefits (and potentially even contributing employer dollars toward them) signaled a reverence toward holistic employee well-being.
What the pandemic laid bare for these same leaders and brokers/consultants is that the same lens can (and should be) applied to financial wellness as a benefits category. Cash flow management, access to affordable capital, and the ability to easily build a savings cushion are all key parts of an employee’s ability to achieve long-term financial resilience. Pre-COVID, raising wages once a year and offering a 401(k) match were seen as “enough” in this area, but if the last two-plus years have proven anything, it’s how close to the financial edge far too many working Americans are living when it comes to their money. Benefits that help bridge financial gaps when financial shocks occur or help build a savings habit are just as integral to holistic employee well-being as benefits more focused on physical or mental health.
We believe that holistic financial well-being programs that support emergency savings and inclusive access to affordable loans, as well as wrap-around financial resilience programs including coaching and education, will lead the efforts to close the benefits gap. There’s also an increasing awareness of and openness to newer categories of financial well-being benefits, like salary-linked loans and earned wage access. Employers are becoming more open to benefits that directly address financial issues like high-cost debt, variable cash flow, and lack of emergency savings.
In Employee Benefits Research Institute’s 2020 survey, only 36% of respondents were offering or planning to offer loans repaid through payroll deduction, and 34% were offering or planning to offer payroll advance or earned wage access solutions. In last year’s survey (one year later), those numbers had gone up to 55% and 51%, respectively.
A focus on building emergency savings: Following the financial shocks that rocked many American families over 2020-21, and the burden of record inflation this year, building (or rebuilding) emergency savings is a top priority. Our latest research has shown that almost three in four working Americans have less savings this year compared to a year ago, with almost a third of people having completely drained their savings. Having emergency funds is the largest predictor of financial well-being, and elevating employer programs focused on building short-term savings is a critical priority. Emergency savings solutions are increasing in popularity, with 42% of employers likely to offer one in the next one to two years, according to EBRI. This aligns with what employees want: Forty percent of employees in our latest research express interest in an emergency savings benefit, prioritizing it over others, including financial education and one-on-one coaching.
Your favorite thing to do on weekends?
I’ve been an avid sailboat racer since I was 5 years old. I won our club’s season championship with my dad and brother this year, which was truly the highlight of my sailing career (despite the fact that I am also a national champion—a fact I will never let my big brothers forget).
How does offering a financial well-being benefit like Salary Finance help employers?
Since we work with employers, this part is key! A Harvard Kennedy School case study found that employers who offered Salary Finance saw a 28% improvement in employee retention. One of our employer clients, Dawn Foods, has seen decreases of 40% in the volume of 401(k) loans after launching Salary Finance, and we were even named a finalist for Plan Sponsor of the Year in 2022. We also routinely survey our members and are able to report that employees with access to Salary Finance are happier and more loyal to their employer as a result.
