For many of us, our journey into financial education starts when we leave home.
It often feels like we’ve been thrown in the deep end - with a salary to manage, tax to understand and rent to pay - because we did not learn these vital lessons at school.
Claro Wellbeing research shows that around 15% of UK adults do not have the skills or confidence to effectively manage their money day to day, or to save, invest and deal with debt. This rises to 35% of those aged 16 to 24.
Poor financial literacy not only has an impact on our overall wellbeing but can also make money management and planning for the future challenging.
We’re all trying to work through the cost of living crisis and manage rising interest rates, but financial education goes beyond the current economic challenges. People will always worry about money if they do not know the best ways to manage it.
It’s never too late to learn and workplace financial education could help staff improve their financial literacy, prevent money-related stress and improve productivity. A good programme will also support them through their life-stages be it buying a first home, starting a family or preparing for retirement.
Below are four ways a good financial wellbeing programme could boost your staff's financial wellbeing and support them beyond the cost of living crisis:
1. Practical money-management skills
Even the most financially sophisticated of us could do with going back to basics and putting in place a solid framework for managing our finances.
For example, Claro Wellbeing’s Mental Health Project report revealed that 39% of adults do not have a budget. This is the foundation of good financial planning, helping you to develop a proactive plan - whether that’s to build a protective financial cushion or save /invest with a longer term goal in mind.
Workplace financial wellbeing programmes, such as those that include one-on-one financial coaching and interactive workshops on a range of topics (such as budgeting, building an emergency fund or clearing debts) can help staff at any stage of their career with developing good financial habits that can help them take control of their money, build wealth and plan for the future.
2. Builds financial resilience
As the cost of living soars, workers across all income brackets are being put under significant financial pressure.
Our research shows over a third (37%) of workers say they struggle, fall behind or cannot keep up with bills, with almost one in three (30%) earning more than £150,000 a year. We also found that almost half (49%) of workers have less than a month’s outgoings saved, while 15% would run out of money within two weeks if they lost their job.
Financial resilience is the ability to cope with unexpected expenses, such as redundancy, the boiler breaking down or the rising cost of living. It’s having the peace of mind you can support yourself no matter what happens.
Understanding how to weather unexpected financial storms is a key part of financial wellbeing that is crucial at every stage of your life - and most of us could do with some guidance.
3. Goal-setting and future planning
Setting financial goals not only helps us plan for the future but also keeps us motivated and moving forward.
They can be short-term, like saving for a holiday, or long-term such as wanting to have enough money to retire comfortably. Regardless of the time frame, financial goals force us to consider what we want and how we plan on getting there.
A good financial education strategy could include discussions around effective goal setting, for example, by offering courses or interactive sessions with financial experts.
4. Boosts financial confidence
What we understand about money growing up can often hold us back as adults. For example, if we hear our parents arguing about money, we may see it as negative. As a result we may end up feeling uncomfortable managing money day-to-day because of a lack of confidence or ignoring our finances altogether.
Creating a space at work where open conversation is welcome could help alleviate negative feelings about money and improve our confidence. For example, introducing regular Finance Friday sessions where groups of staff can work on their own financial tasks over a 25-minute video call and share their wins at the end.
In addition, having access to a financial coach who supports staff on their financial journey will not only help improve their confidence but also empower them to make smart financial decisions.
Amelia Murray
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