More ways to maximise employee’s financial wellbeing

The author of Stop Worrying About Money discussed why financial wellbeing is so important and how employers can help staff to remain financially stress-free.

“Financial wellbeing support is critical; research demonstrates that financial wellbeing is closely linked to overall wellbeing and happiness. Studies have also found that having a sense of control over one’s finance (like financial security), ability to manage financial stress and a feeling of financial security are all important to financial wellbeing,” said Jacqui Clarke.

“Financial stress negatively impacts people’s ability to work effectively when they are bothered or distracted by financial stress. It’s no surprise that people lose sleep over financial stress. More often, people can make poor decisions in their work (as well as life) due to personal financial stress preoccupying their mind. In addition, financial stress or poor financial wellbeing increases anxiety and can lead to other health problems, including depression.”

According to Commonwealth Bank research referenced by Ms Clarke, 9 per cent of their customer base were “having trouble” with money, 31 per cent were “just coping”, and 48 per cent were “getting by”.

Just 12 per cent said they were “doing great”. These are alarming statistics if only 12 per cent of our population are comfortable with their financial situation.

Ms Clarke continued: “One-quarter of Australians experience negative ‘every day’ financial wellbeing outcomes. One in four people surveyed do not enjoy life because of the way they are managing their money, and say they are struggling with money management (23 per cent) and their lives are often or always controlled by their finances (29 per cent). One-third of Australians face ‘rainy day’ and ‘one day’ financial uncertainty.”

“About one in three respondents have low financial resilience, with 37 per cent saying they couldn’t handle a major unexpected expense and 31 per cent observed with the worst savings balance outcomes. In addition, one-third say they are not on track to secure their financial future (33 per cent) or provide for future needs (32 per cent),” explained Ms Clarke.

“You will also find that people who are unhappy in their jobs, stick with their job or role with deteriorating satisfaction. As an employer, you won’t have people at their best due to financial stress. The financial burden of their lifestyle and/or simply debt and rising living costs add to their distraction at work. A feeling or sense of being trapped, as many are firmly on the financial treadmill (caused my income and expense creep).”

With this in mind, Ms Clarke offered some suggestions that employers can implement to help protect staff against financial stress.

“Providing good financial education to all staff is the best way to support them. Similar to how you would approach mental health (in the same supportive way) or the way you would provide information about burnout, gambling, domestic abuse or anti-bullying policies.”

Ms Clarke said: “It’s important to support the development of financial literacy for all Australians (as we know this is at an all-time low), and depending on your type of business, there are many aspects of finance and accounting in business every day that can be the first step in building financial literacy — everyone knows what a budget is right?”

“Other ways that you can assist is by providing access to qualified professionals for financial coaching or counselling (to provide general advice regarding financial wellbeing). Also, consider providing access to financial services such as bankers, accountants, insurance brokers and financial planners etc. and or recommend my book!! Provide helpful tips on how people can reduce their financial stress.” 

While employers have a responsibility to look after the wellbeing of their workers, individuals should also be looking out for themselves and seek help when needed.

“Don’t dwell on it. Building your personal finance village (PFV) is essential — a select group of people around you to help make sound financial decisions and reduce the emotion that often goes with money decisions. It takes time to create a PFV, but it’s important to have people you trust (who have the necessary skills) to help you make financial decisions and, in turn, build your financial literacy,” Ms Clarke outlined.

“Prepare your own budget, or my personal recommendation is to understand what it costs to ‘open your front door’ at home (rates/rent (or mortgage) subscriptions, insurance, food etc.), recognise where your expenditure is and make the necessary changes to your outgoings where you can to reduce stress.”

Ms Clarke concluded: “Good financial hygiene is essential for all of us.”