When you speak to most people, a major area of frustration is their finances and making long-term decisions about their wealth. Most people are unsure of the benefits of various investment areas and a staggering number of people do not even have a retirement annuity or a plan. Let alone going to more complex topics of taxes, and off-shore investments… most replies are – it is difficult, and I hate doing it.
Why? Financial understanding is extremely low and the implication of action or inaction, is not always understood. It is also about the long-term game. Being financially savvy is not always about the now, but rather planning for a rainy day, creating a position where you have multiple revenue streams in the future, creating a university fund for your children, planning for retirement, and the list goes on and on. Lack of education, living outside of your means, and current needs all play a role in financial stresses.
The truth about financial health
So, what is financial well-being? It is a financial plan for saving, investing, and planning for your financial future. It is making choices that allow you to lead a comfortable life knowing your expenses and retirement needs are taken care of. Key aspects of financial well-being are making informed decisions, learning financial acumen, and actively investing in the future. It may take some sacrifice now to get the long-term gain and create a financially worry-free life. Worry-free meaning – you have control over current obligations, feel secure that if they should arise, you can still handle them, and still know you’re investing in your future.
How do we do this? From an employer and employee, we need to embrace technology to ensure and help in the decision-making process.
From an employee perspective, tips around embracing technology are:
1 – Improve your financial education and understanding
You do not need a degree to know how to run your finances. There are a number of courses online and training apps that can improve your knowledge. Online learning sites such as Udemy, have several cost-effective courses and also reading financial articles online on news apps. It all helps gain an understanding and improve your knowledge of finances and how to handle your own finances.
2 – Make use of financial portals
People make financial decisions in isolation, which leads to problems. Make use of financial portals that give you a holistic view of your finances. From banking apps to insurance apps – more information is collected and collated to help with building awareness of financial wellbeing, helping to improve financial habits, and expanding your knowledge around finances.
3 – Budget apps
People always underestimate how much they spend until they write it down and see the number. A budget is an effective way to manage costs and spending. With all the budget apps available out there, it is easy to manage and maintain your finances each month. It is also an effective way to pick up wasteful expenditure and reduce it and convert from wastage to extra savings.
4 – Understanding online apps and savings
Embracing technology can lead to massive savings. Converting accounts to online accounts can save you massive amounts in interest, spending and even earn you reward points.
From an employer’s perspective, items that can be put into place to assist employees are:
1 – Employee portal site and advisory access
By allowing employees access to financial advisors, it helps create and promote financial education and a great financial understanding of their current situations. Portals are also always there to improve the employee financial education processes.
2 – Employee assistance
Financial and work stress has always been a fact of life but through COVID, stress levels have elevated, and it is important for employee aid to be in place. This could be in the form of an employee assistance program or counselling service, which often includes online access to mental health professionals through mediums such as video calling.
Financial wellbeing will differ between people and no plan will be the same. But the aim should be:
- Lower stress levels due to expenses, debt, and financial position
- Lower debt and put a savings plan in place
- Have funds available for an unexpected expense without going into debt
- Establish a plan for retirement and long-term savings
Improvement plans can start with setting financial goals with small milestones to start the process. Be mindful of spending and expenses and aim to spend less than you earn. Improve your understanding of finances and how to handle them. Most importantly – know where you stand monthly with your finances. Make sure that you budget and change your spending habits accordingly.
Embracing technology can empower financial wellbeing, help reduce stress and ensure you have a sound financial plan for the future.