With a new year comes new pressures, and one that affects millions of us is us is all is financial worry. Last year in the UK, saving money was the second most popular resolution, and 48% of people in the US set resolutions to save more, spend less and pay off debts in 2019.
Last week I took over the Thomsons Twitter account for my latest #AskNeil Q&A and answered some popular questions about saving throughout 2019 and helping your employees stay financially fit. Take a look at some of the best questions below:
Why is January a good time to talk about financial wellness?
We all love a New Year’s resolution but 80% of us fail by February. Why not encourage your people to undertake one-off activities that yield long-term benefits. For example, set up a monthly savings habit, consolidate debts or shop around for better deals on utilities.
Are there any tricks to saving money?
Try offsetting. If you’re doing dry January for health reasons why not crystallise what you’re saving by putting it away into a 'rainy day' fund. Physical and financial wellness are two sides of the same coin.
What’s special about January when it comes to financial wellness?
With typically 40 days between December and January payday, over the most expensive time of the year, personal finances can really take a hit. Increased spending around Christmas is compounded by going rogue in the January sales – so it’s a great time to bring focus back onto financial wellness and the many ways to save!
Can we link benefits selection windows to a New Year theme?
Many will run their annual benefit windows in December for the following year but those who don’t, will likely run them in March to align to the financial year. Also, many benefits operate a monthly window, such as pensions, so they will still be able to make informed benefits selections to improve their financial health. January is still a great time to communicate your financial wellness benefits to your people, so linking them to a New Year’s theme is a great way to grab their attention.
How can I keep a lid on monthly spending?
First, find out what your fixed costs are - typically, gas, electricity, TV, etc. - and review spending on these. Then look at your variable costs such as coffees, eating out, shopping and find small ways to cut back, for example ‘No coffee Mondays’ or confining eating out to the weekend. You'll find most people can save a chunk of money every month, even just by cutting out one variable cost.
How can I measure the ROI of financial wellness?
I’m a big fan of before and after primary research to measure employee sentiment. This is the acid test which sits alongside more quantitative data sources such as reporting on benefit updates and Darwin engagement levels.
How can employers help their people?
We’re seeing more and more clients interested in helping their clients with saving, borrowing and budgeting in a bid to help their people engage with their own financial health. We often like to position financial wellness as helping people achieve their life goals to try and resonate more with employees. Life goals often have a financial implication, for example buying a house or getting married, but the vision of the end goal is easier for people to engage with and work towards rather than thinking about saving in the now.
I know financial wellness is important but how do I start the journey for my employees?
This is a great question and one that is individual for each organisation. If you’re lucky enough to be a Thomsons client speak to your account manager or pension consultant, DM my Twitter account, @Neil_Thomsons, or listen to our latest podcast with client OVO as they discuss how they support their employees’ financial wellness.