It’s not surprising to most EAP workers that out of the five most prevalent health concerns in any workplace, around 80% is related to mental health. Of those, many are related to financial stressors, with over 30% saying they have taken time off work because of – or to sort out – financial issues and over 40% saying they are distracted at work due to financial stress.
Many of us are resilient to most of the stressors we experience during day-to-day life, but financial difficulty is one of those things that not only causes high stress, but can also affect us in other more tangible ways. For instance, some employees may take a sick day off work simply because they can’t afford the cost of fuel to attend their workplace, while others may suffer loss of mental clarity at the end of each shift because they couldn’t afford to eat lunch.
So, what can employers do to help their employees cope with financial stress and build resilience? Firstly, it is vital that in order to help your employees, you need to use empathy to understand what they are going through and recognising what impact it is having. Your employee might be a member of the ageing population and dealing with stress related to retirement funds. They may be millennials facing crushing mortgage or rental costs, student debt (which is now interest-gathering under the Liberal govt) or the low national wages becoming stagnant. Having a caring person who understands them can often be a huge help to somebody dealing with financial stress.
Below, we’ve outlined a number of tips you as an employer can give to your employees to help them regain control of their finances and reduce stress:
Create a Budget
The first thing anyone with financial difficulties should do is create an honest budget. You simply can’t tackle a problem without knowing what the problem is and a budget is the way to do it. List all income and expenditure and for a running budget, continue to add any income and expenses to this. It may seem like a waste of time, but don’t forget to add all the little purchases, like coffees, gum, parking metre payments, bank ATM/Eftpos fees etc. as these all add up to a surprisingly substantial amount.
Start Paying Off Debt
You may think ‘well duh!’, but many people with large sums of debt hide from it, rather than tackle it. Don’t be fooled into taking on Part 9 Agreements (unless you have absolutely no other choice between that or bankruptcy) or high interest consolidation loans and instead, contact each creditor and negotiate to pay off the absolute smallest amount you can get away with, even if it’s only $10 per week.
Let creditors know you are under heavy financial difficulties so they can put you on any hardship plans they may have. Most creditors are happy you are willing to pay, even if it’s not much. When your circumstances change for the better, you’ll be able to pay more. This will minimise the chances of you ruining your credit rating and look more positive if you ever do need to apply for finance in the future, whereas ignoring debt will cripple your ability to apply for credit in the future.
Change Providers or get rid of excess services
Review all the companies you’re paying money or fees to – not just once, but regularly. You might be surprised how many non-essential services you don’t actually want anymore, such as streaming TV services, gym memberships and similar. It’s also important to review your essential services – such as power providers, telecommunications providers and banking products – regularly or as your life circumstances change. You will find that you might be better off switching to a different plan or provider, or negotiating better deals with your current provider.
Save – even if it’s only a tiny amount
Similar to paying off debt, you should force yourself to save, even if it’s only $5 a week. Don’t touch these savings unless you truly need to, such as during an emergency. If you want money for a holiday or other non-emergency, create a separate savings pool.
It’s a good idea to set up an automatic debit, where your bank debits a specific amount into a savings account each payday. That way, you won’t even notice it. There are also savings accounts you can get where you have to go through a bit of effort to withdraw the funds. This can be very effective for impulse buyers, so ask your bank if you aren’t a good saver.
By taking the above simple steps, employees are being proactive about gaining control of their finances.
This alone can significantly reduce stress. They may not see results immediately, but eventually they will – they will also gain a sense of empowerment and learn how to better-control their financial future. Financial coaching is also a great idea and here at Acacia, we can help your employees to gain control of their finances. Call us on 1300 364 273 or click here to contact us and we’ll show you how.