The Benefit Nobody Can Reach

It happens every December. Somebody, somewhere in your organization is buying sunglasses they don’t need. They’ve just realized there’s money left in their flexible spending account (FSA), the spending deadline is approaching, and the only other option is losing the money (their own money!). And so, it’s a pair of sunglasses, a jumbo box of Batman Band-Aids, and another spare thermometer.

That money was set aside for them. It sat unspent for eleven months, not because they didn't want it, but because accessing it involved saving receipts, checking eligibility rules, realizing their receipt wasn’t detailed enough, getting frustrated, and using their own non-FSA money. The benefit existed. It was just out of reach.

This is worth taking seriously now, because the evidence on financial strain keeps getting harder to wave away. A study published last month in Innovation in Aging revealed that those with persistent low income showed poorer brain health, including greater shrinkage, on scans in their late sixties. The associations held after accounting for childhood cognition, education and childhood disadvantage. Financial strain is not a mood that passes, it accumulates.

And before you can say “brown bag lunch session!” it’s worth pointing out that although well intentioned, such budgeting webinars, apps, or portals rarely work. The largest meta-analysis on this question, covering 168 papers, found that financial education interventions explained around 0.1% of the variance in actual financial behavior, with weaker effects in low-income groups and decay over time.

People under financial pressure aren’t short on information, they’re short on bandwidth. Scarcity research shows attention tunneling toward the immediate shortfall, time horizons contracting, and executive function taxed by the load of making the month work. Someone in that state doesn’t need a seminar on compound interest. They need the thing you already bought them to take four minutes instead of forty.

Which makes financial wellbeing an experience design problem, which is important, because you already know how to solve that problem.

Audit what you fund the way you would audit a checkout flow.

• Where do people hesitate?

• Where do they abandon?

• Where do they default to doing nothing at all?

One recent survey of health savings account holders found employees leaving an average of more than $4,500 a year unreimbursed. The organizations closing that gap treat it as a design failure rather than an awareness failure.

Three places to look.

First: defaults. Every election you ask someone to make in a hurry, on a form, once a year, is a place where inaction is the likeliest outcome.

Second: timing. Support offered in January is not support when the bill lands in September.

Third: the friction tax on money people have already earned. If an expense claim takes eleven weeks to reimburse, you have quietly made your employees your lenders, and the ones least able to absorb that are the ones who notice.

None of this requires knowing anything about any individual's finances. That is the part leaders miss when they conclude the only honest lever is pay, and then conclude they have no lever at all. You can’t ask someone about their debts, but you can find the point in a process where people give up, and remove it.

It is the rare intervention that needs no intrusion, and no new budget. The money is already committed. The only question is whether anyone can get to it.

Well, that, and whether the whole thing is a hoax perpetuated by Big Sunglasses…