How to support your employees with budgeting and financial planning skills
Helping employees improve their money skills doesn’t mean being paternalistic, dictatorial or judgemental. It means breaking the taboo of talking about money by sharing stories and improving individuals’ money choices and actions through effective strategies and practical tools. Controlling daily spending is the foundation upon which high financial wellbeing is based.
How to help people get started
The simplest way to help employees to budget is to give them access to tools that help them take action to control their outgoings. Generally, if someone has debt, they know they need to pay it off. Additionally, the majority of people recognise that saving is a good idea, it’s just way down on their list of priorities. Anything that makes it easier for people to take action has a high likelihood of being done. This is one of the reasons why salary deducted savings and loan products are becoming increasingly popular and are effective in helping people consolidate debt and get into a savings habit.
Another approach is to promote educational content that explains ‘why to’ and ‘how to’ control spending to help embed good financial habits. Providing high-level frameworks on how to approach spending, so that they spend less than they earn and direct surpluses to building financial resilience and lifestyle choices.
It also makes sense for employers to promote and provide easy access to a downloadable budget summary and online budgeting tool, to help those employees who have the motivation, inclination, and discipline to work out where their money goes and, more importantly, where it should go in the future.
Life event guides can also be well received and feel more relevant to an individual’s personal situation.
Promoting tools and apps
There are now a range of smartphone apps, both from banks and third-party providers, that enable people to track and review their spending. Using banking transaction data to help people to improve daily spending behaviour and habits have been held out as the holy grail of financial wellbeing.
But all the money education, tools or apps in the world won’t, on their own, be enough to help many employees who find the issue of managing their money scary, overwhelming or boring. Employees need to be engaged on an emotional level through relatable human stories and practical examples, based on real-life experiences.
Delivered in this way, the topic of finance becomes more relatable and enables employers to help their employees to better understand the role of money in their lives, without being sanctimonious or preachy. We can talk about budgeting without talking about budgeting. Done well, live financial wellbeing events can motivate employees to be more intentional and confident about their day to day money decisions and actions and to regularly take time to take necessary actions.
Few people are taught the basics of being good with money when they are young. Money basics include being able to control day to day spending such that short term needs and desires can be balanced with what is in one’s longer-term best interests.
In a society awash with messages encouraging people to spend their money on daily consumption, employers that provide effective financial wellbeing communications and support will be doing their bit to make a real difference to the lives of their staff and their families.
This article was provided by Salary Finance.
References
1. The Employer’s Guide to Financial Wellbeing, Salary Finance, October 2018
https://www.salaryfinance.com/financial-wellbeing-guide/
In partnership with Salary Finance Inc
We understand the impact finances have on our health, our happiness, our home life & our work life.
