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Financial wellness is something that everyone strives to achieve. Being in a position close to financial freedom can alleviate many stresses that may come tied with financial burdens. With the growing need for everyday living, financial wellness is not as easy as it was before. Student debt is growing and the cost of living is not slowing down. This article will discuss what you need to know about the importance of financial wellness and how to go about achieving it in the times that we live in.
Although people define employee financial wellness differently from each other, there is a universal understanding of what financial wellness should entail. Forbes (2020), defines financial wellness as a construct. Based on this, financial wellness can be defined as (out of 100%):
PWC researched employee financial wellness in 2020 and some of the findings are found below:
(PWC, 2020)
According to the report, “more than one-third of full-time employed Millennials, Gen Xers, and Baby Boomers, have less than $1,000 saved to deal with unexpected expenses” (PWC, 2020). Looking at the current situation that the world has found itself in, the COVID 19 pandemic, this finding becomes more important to look into.
(PWC, 2020)
Financial matters are the top cause of stress in the workplace (PWC, 2020).
(PWC, 2020)
According to research conducted on employees from various sectors in the USA in 2019, some interesting findings were noted. America is among the richest nations in the world. As a result, one would believe that most employees there would be on the road to financial freedom but the contrary is true. Below are some employee wellness statistics from the research conducted:
Employees need to pay attention to financial wellness as the stress that is linked to the financial burdens is taking a toll on the workforce at large. This stress translates into depression, sleepless nights, and even full-blown panic attacks, which in turn increase absenteeism, reduce productivity, and fuel high employee turnover (ej4, 2020).
The way of living as significantly changed from the way it was before. Some points need that employees need to pay attention to before they sink into a crisis is that:
There are some practices that you can do at an individual level to help with the stress that comes with the financial burdens that can cause a threat to well-being. Here are some ways in which employee financial wellness can be achieved personally.
Make a budget - Depending on your monthly income, expenditure, and savings, you can develop a budget that will help you live with available resources. In case you face a shortage of money, you can adjust your budget, but do not opt for credit cards. Any emergency expenses can be covered with your savings but do not overspend or lend money.
Keep your spending in check - Once your budget is prepared, make a list of all the necessary items you would want to purchase and spend accordingly. Also, keep a track of where you are spending money regularly. If you frequently eat at restaurants, you can maybe cut down your visits by one or two times to make sure you are not overspending.
Be yourself as your first payer - When you receive your monthly paychecks, always set aside a fixed amount for yourself. You can set-up automated deposits and consider it as one of your payments.
Never make any major purchase in haste - If you are looking forward to making any major purchase, always plan for it systematically. Adjust your budget and savings accordingly and do not break into your regular savings fund. Even if you do, make sure you replenish it to ensure that your savings don’t get affected.
Avoid going overboard with your credit cards - If you are using a credit card, use it wisely and plan your payments each month. Always stick to a limit and do not overspend. When it comes to financial wellbeing, a credit score is an important aspect. Delayed payments and higher debts can affect your credit score.
Although employers are not usually the source of financial stress on their employees, they are in a position where they can help their employees overcome these burdens. Some ways in which employers can help employees in this area are noted below, as outlined by ej4 (2020):
Financial wellness is an important topic that needs to be in constant discussion. Financial literacy is something that everyone needs to be a part of. This is a part of life that everyone will experience and not many can avoid. Many institutions, employers, employees and schools can help in turning this around.
Thandeka Madziwanyika is a Consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.
Phone +263 (242) 481946-48/481950 or
Cell number +263 78 318 0936 or
Email: thandeka@ipcconsultants.com or
Visit our website at www.ipcconsultants.com.
This article was written by one of the consultants at IPC
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