How to improve your employees' financial wellbeing

Empower your team to better understand their relationship with money

Around 40% of employees say that their financial situation affects their ability to be productive at work. That’s a huge proportion, and as the cost of living goes up (and up), that figure is likely to rise. Even the most self-aware employers have historically underestimated their responsibilities when it comes to looking after their team’s financial wellbeing. Frankly, money makes for an awkward conversation. But it’s an important one all the same. 

Feeling financially ‘well’

Employees with a sense of financial security and freedom tend to be less stressed about the possibility of short-term upheavals, like a job loss or a broken fridge. This has an overwhelmingly positive impact on their overall health, as well as their relationships both at home and at work. 

According to an employee survey by CIPD, the most important aspects of financial wellbeing are:

  • Earning a wage that’s enough to support a reasonable lifestyle for me and my loved ones
  • Being able to save for the future
  • Being rewarded fairly and consistently for my efforts
  • Being able to comfortably pay off debts

The cost to business

It’s no surprise that feeling financially insecure can lead to a lack of motivation and concentration at work. As well as having a negative impact on your team’s mental health, financial instability results in a huge loss of productivity too. In fact, one in five UK employees say they spend at least six hours each week thinking about or dealing with personal financial issues while at work. 

How to talk to your team about personal finances

There are plenty of practical things your workplace can do to support the financial wellbeing of your team – from payroll savings schemes to a fair expenses system, clear contract terms and a decent sick leave policy – but equipping managers to have open conversations with their team about personal finances is a great first step. 

We asked our favourite Spill therapists to share some starting points to help you and your team explore your personal relationship with money. Here’s what they said:

1. Think about where you learned your habits

We learn a lot of our behaviour from our childhood role models. So take a moment to ask yourself how people in your formative years dealt with their finances. What do you think you might have unconsciously learned from them? 

  • Do you tend to cut corners on daily purchases and then splash out on something showy? 
  • Do you see holidays as a time to let loose financially? 
  • Do you feel the need to constantly be 'careful' with your money? 

Understanding who your role models were will help you spot which financial habits you picked up automatically from mum and dad, and which ones you'd like to consciously nurture going forward.

2. Know your values

What we choose to spend our money on says a lot about who we are. Whether it’s organic kombucha or the supermarket’s own brand of shampoo, our day-to-day spending can offer clues into our unconscious values.

For example, we might say we value the gym, but then spend more money each month on Netflix. Being aware of the difference between what we say and what we do can help us feel more in harmony and become more conscious of our spending. Greater self-knowledge helps reduce the effects of cognitive dissonance, which is that uneasy feeling we get when we do things that aren't consistent with what we really think.

The bottom line is there's nothing wrong with Netflix. And owning our values explicitly helps us not to feel guilty when that subscription money leaves our account every month. 

3. Spot your cues

Over 90% of what we do each day, we do without thinking. By understanding what our spending cues are – whether that’s walking past our favourite cafe or browsing Etsy on our commute – we can catch ourselves before the cue triggers the behaviour. A small change, like taking a route to work that avoids that particular cafe, might just save us hundreds of pounds a year.

Impulsive spending can also have an emotional cue. When we feel stressed, or frustrated, or sad, it's hard for us to just sit with the feeling and let it pass. Instead, we look for outlets, like shopping. Next time this happens, try and think about what reward you’re getting from your impulse buy. Does spending this way feel like you’re letting off steam? Or does it feel more like an achievement? Try experimenting with other activities that offer a similar emotional reward: boxing a punch bag, baking a cake, writing a haiku. See what works. Recognising your cues can help you to replace them with new habits which you’ll internalise over time.

4. Understand what money can offer you (and what it can't)

We often think that our next big purchase will make our lives infinitely better. But that's not the case according to science. A 2010 study by Nobel prize winner Daniel Kahneman and Angus Deaton of Princeton University shows that the relationship between money and happiness isn't linear: it's logarithmic. That means that more money does bring more happiness, but only up to a certain point. Once your day-to-day needs are met and you're not actively worrying about your financial security, the amount of happiness gained by each additional pound earned diminishes drastically and begins to approach zero. Once you've reached a certain level of income, your happiness will be better served by non-monetary pursuits: more meaningful work, for instance, or taking up fishing.

5. Learn your rights

Did you know that you can ask to be excluded from having an overdraft if you have a gambling addiction or struggle with any kind of mental health problem such as bipolar disorder or ADHD which could affect your finances? By law, financial institutions in the UK have a duty of care. That means there are policies in place that can protect you. So ask your bank to help you make use of them.

5. Do what you do best

When we think we're bad at something, we tend to do it less. And financial planning is a skill like any other. In order to get better at it, you need to practice. 

You could try managing your finances by pairing it with something you know you're good at. If you're an extrovert, then make it a social thing, and involve your friends in your savings goals. Or if you love crafting, then make a scrapbook to keep track of your spending. The more glitter, the better. 

6. Focus on what you can control

Our minds often focus on things outside of our direct control. Dwelling on the economy, global news or stocks and shares just fans the flames of feeling powerless, which fuels symptoms of anxiety.

If we bring our attention down to the micro level, it's possible to see there's a lot we can control in terms of our cash. What we do when we see our friends, how many nights a week we eat out or even how often we look at our banking app. 

The closer you look, the more you see the things we have decision-making power over. And the more we focus closely on these small things we can control, the better we can defend ourselves against those things we can't control. Good habits compound over time.

Spill offers therapy sessions and mental health training for your whole team. Learn more about how Spill can supercharge your employees' wellbeing.

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