Money matters

Have you ever considered how much worrying about money is costing you?

Australian businesses lose billions of dollars every year through loss of productivity or absence due to employees living with poor financial wellbeing and stress.

It may not be as easy to see or estimate, but just like the seemingly small purchases on your credit card statement, the costs to your mental health and wellbeing can easily mount up.

So, how financially well are you?

For most of us, the answer is probably ‘not as well as I’d like to be’.

For some, the feeling of financial stress is overwhelming and can take an enormous toll on our sense of wellbeing.

It can lead to relationship difficulties, interrupted sleep, feelings of anger or fear, mood swings, fatigue, and appetite changes.

You need security

We’re not talking about a hi-tech computerised vault to look after your savings - in our modern society, financial security is inextricably linked to our most basic human needs like food, water, accommodation, etc.

Without financial security, we are unable to meet our basic needs which is essentially anything that directly impacts our sense of safety and security.

If these basic needs are not met, we will be unable to meet our higher-level needs(1) like relationships, connections, self-esteem, self-actualisation.

Therefore, if we don’t feel financially secure or well, this is going to have a significant impact on our wellbeing.

Credit cards

Real life investment

If we are honest, most of us could improve our financial wellbeing. Thankfully, there are many programs and advisors available, some free and some paid.

It just takes some investment of time and discipline.

To see how support programs work, we asked our colleague Sarah to invest time in her financial wellbeing.

Sarah, 44, with three children, accessed APM’s partner financial advisory service Map My Plan, as part of the Employee Assistance Program, and agreed to get started with their service and report back.

The program identifies Sarah’s pain points around her finances and her future goals, and aims to provide her with a personalised plan of ongoing advice and recommendations on how to reach those goals.

Sarah spoke with Paul Feeney, founder of Map My Plan, to understand more about the process of improving her financial wellbeing.

“As advisors, we are here to ‘nudge’, not judge. You tell us what is important to you, and we help you map out the path to achieving it. You get to choose whether you sacrifice the coffee or not,” Paul said.

“Everyone should be able to live their best financial life. It is our job to make the complex simple – to give people control over their decisions and, ultimately, their financial future.”

Was it on the money?

“It really only took 10 or 15 minutes to get the basics done. The challenging part came when I realised that we aren’t saving enough to be comfortable in the future, particularly with school fees looming.”

“The part I found most beneficial was the breakdown of our expenses into various categories. It really helped me see where we are overspending (um, food!) and realise that we have developed some expensive habits.”

“If I’m being honest, before I saw the figures in black and white, I knew we were spending too much, but didn’t have the ability to easily understand where, or what to do about it … so I just put my head in the sand,” reflects Sarah.

“It all felt a bit too hard. But the reality of setting up the Plan was actually really simple – nowhere near as daunting as I imagined, and not a single spreadsheet in sight. And the best part is I get to keep my coffee.”

“I was losing sleep and feeling mildly stressed, and it feels like that strain has disappeared overnight – I have a plan and I’m on the right path,” Sarah added.

Woman happy with financial wellbeing

How to check your financial wellbeing

“Empowering people to make good choices is what good financial advice is all about,” said Map My Plan’s Paul.

“You don’t need to be in dire financial straits to set up a financial plan – in fact, we’ve found the average person can uncover savings and wealth of $250,000 by retirement age.”

For those who wish to improve their financial wellbeing, there are some simple steps you can take.

Ask yourself

When I am able to meet expenses and have money left over;

  • Am I comfortably able to pay my bills and expenses on time?
  • Do I have some money to spend on enjoyable things each month?

When I feel in control of my finances;

  • Do I know and understand what my financial commitments and opportunities are?

When I feel financially secure now and in the future;

  • Am I confident of my financial security in the next 5 years? 10 years? 20 years or more?

Most of the major banks offer free financial wellbeing programs, in addition to free financial counselling services offered by Australian Government and not-for-profit organisations.

For additional advice, check what services are provided by your employer, such as Map My Plan. There is a list of these resources at the bottom of this article.

Of course you can also research and find your own private financial advisor.

Couple discuss financial wellbeing by computer

Why you should promote financial wellbeing

According to AMP’s 2020 Financial Wellbeing Index, only 50% of Australian’s feel financially secure.

The impact of employee financial stress to Australian business is over $30 billion per year and is widely reflected in reduced productivity and absence.

There are strategic benefits to supporting employees in accessing financial wellbeing support:

  • Minimise distractions caused by financial stress and improve productivity and presenteeism
  • Positive impact on physical health and minimise factors influencing absenteeism
  • Improves employee engagement and retention
  • Enhances organisational culture and perceived organisational support, builds stronger relationships between management and employees

Resources and additional information:

Support lines

1 Maslow’s hierarchy of needs is an idea in psychology proposed by Abraham Maslow in his 1943 paper 'A Theory of Human Motivation' in the journal Psychological Review.