Avoiding financial stress or indeed combating financial stress must therefore be considered in employee wellbeing initiatives. Financial wellness is, after all, inextricably linked to our overall wellbeing. Holistic employe wellness offerings will therefore recognise the interconnectedness between employee mental health with social, financial, nutritional and physical wellbeing.
In this article I want to examine the 4 primary reasons employees stress over money. Knowing these common problems will help Human Resources professionals to plan their employee financial wellness programmes and help individuals to identify the root of their financial stress.
We have to know the problem before we can fix it!
The 4 primary reasons for financial stress.
In my previous article I discussed 2 causes of financial stress. Sudden financial stress is caused by ad-hoc events, unforeseen circumstances and emergencies. Ongoing financial stress relates to habits and deep rooted concerns.
These typically fall into four categories.
Persistent over-spending
Living beyond one’s means is not a financially sustainable situation. Consistently spending more money than you have is a sure fire way to end up in debt. However, some people see this over-spend as incremental and so the spending problem is ignored. But all of these shortfalls do add up and this creeping effect will land you in the red.
Recognising this problem but feeling unable to break the spending pattern causes individuals to suffer financial stress.
|Living Pay Day to Pay Day
This situation is clearly better than consistent overspending. Nevertheless there is reason for concern. People in this category liv hand to mouth. They aren’t accumulating debt, but neither or they accumulating savings. Any sudden change to their financial circumstances or indeed a financial emergency puts them at risk. Worrying about what could happen, as well as the feeling of guilt over not saving money and planning for the future can be a serious cause of financial stress.
Debt
Debt is easy to get into and hard to get out of. When it comes to the latter it can sometimes be difficult to see the light at the end of the tunnel. Feeling trapped by debt is unsurprisingly a key cause of financial stress, and tacked to this is the feeling of frustration and ineptitude that the debt is not being handled as effectively as possible.
Overwhelming financial management
Managing your individual or family finances is a big responsibility. This alone can cause people to suffer from financial stress related largely to worry that they’re handling financial matters in the best way and not putting themselves or family members at risks. Confusion or lack of understanding on certain topics will escalate this type of financial stress as it is ultimately rooted in the fear of the unknown.
How can we help to combat financial stress in the workplace?
Employee financial wellness initiatives can help individuals to identify, understand and tackle their financial problems. A good place to start is with a financial wellness assessment which could be conducted via a one on one consultation with a financial advisor or perhaps with an online survey. Based on these results HR can determine what financial wellbeing events and resources should be planned.
Group workshops and seminar are a great way to demonstrate financial skills such as budgeting and planning and to give general information about various financial topics. When it comes to financial stress, grip sessions can help employees feel that they are not alone when it comes to anxiety and worry.
That said, stress in any form is a personal matter. Of course, we mud also be aware that people like to keep the details of their financial circumstances to themselves. That’s why I would always recommend one to one clinics with a financial advisor as part of a rounded Employee Financial Wellness Programme. Public education and private advice is a good way to approach financial wellbeing in the workplace.
Thank You!
Thank you for taking the time to read this article. Knowing the 4 primary reasons why employees stress over money helps us think about how best to support employee financial wellbeing at work. If you have any questions on this topic please feel free to leave a comment below. In the meantime sign up to the Employee Financial Wellness Newsletter for more tips, articles and advice.
