How to use financial education to help your employees build good saving and spending habits

For many people money is a taboo subject that can cause anxiety, worry, stress and relationship conflict. Helping employees to make wise financial choices and decisions through measured, non-judgemental, consistent and engaging financial educational content can help improve employees’ overall wellbeing.

How to use financial education to help your employees build good saving and spending habits

Content needs to be accessible and relevant

There is no one solution or approach that will work for all employees all of the time. People have different preferences for how they learn, understand and apply knowledge.

With more than 90 per cent of the UK population under 55 now owning a smartphone, it makes a lot of sense to ensure that educational content can be viewed easily on a mobile device. This will make the content more accessible and also increase availability to employees that do not have access to a work computer or phone.

Focusing on mobile also helps bring financial education content into the home so that, where applicable, all members of the household involved in spending and saving decisions, can develop better habits and decisions.

A recent article suggests that all age ranges prefer brief written content over longer pieces. Therefore, the bulk of any written material should be short, topical articles, ideally linked to key life events, to make them more relevant and practical.

The rapid rise of on demand video and vlogs means that video-based educational content is increasingly becoming the preferred medium for many people. Even if bandwidth is low or the employee can’t listen while watching, providing downloadable transcripts and video captions ensures you are catering for all employees.

Simple, sustainable daily habits beat big behaviour changes

By building educational content on behavioural science you can help employees understand how their attitudes and emotions can affect their daily financial habits, choices and decisions. This self-awareness is the first step in helping employees to get control of their day-to-day finances and to develop more positive daily money behaviours.

It can be less intimidating and much easier for most people to make small, easy changes to their money routines and habits, than major changes to their financial planning. These suggested changes need to be tailored to the individual (eg no point in telling them to cut down on ‘expensive’ Starbucks if they don’t drink coffee). Daily incremental changes can culminate and have a positive long-term impact. The key is making sure any financial education enables employees to start their financial wellbeing improvement journey at the level they are at today, and then progress at their own pace.

Everyone needs to start with the basics though and to be most effective the basics of good money habits should be taught in a very specific order:

  • Getting control of spending
  • Lowering the cost of expensive debt
  • How to build a ‘starter’ emergency fund
  • Getting rid of debt
  • Growing the emergency fund
  • Maximising free employer financial contributions
  • The benefits of SAYE (if offered), Help to Save or cash ISA/LISA/HISA
  • The role and need for life and disability insurance.

The order of these steps is really important in building a solid foundation of positive spending and savings habits, to help bring more security around the immediate financial day-to-day. You can then move to show employees how to secure their mid-term from a debt and savings perspective and only when a solid savings foundation has been created can higher risk/return options be considered.

The timing and environment matters

Bringing people together to deliver content face-to-face can help inspire employees to engage more with other support, such as financial wellbeing digital platforms, pension clinics and other money educational content.

You could also consider recruiting and training some of your employees to become money mentors or ambassadors, to champion the general financial wellbeing message and encourage other employees to engage with the financial education resources and support. Creating these kinds of peer communities helps mitigate taboos.

Also, don’t forget that there is a wealth of free government-funded debt and money advice support available which employees can access. Timing financial education communications around the Budget, new tax year or changes to benefits and entitlements can be a great way to keep the guidance relevant and the message of the importance of financial wellbeing visible throughout the year.

The author is Jason Butler, head of financial education at Salary Finance.

This article was provided by Salary Finance.

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