Financial Well-being is All About Balance

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Financial Well-being is All About Balance

More and more employers are now incorporating financial well-being seminars as a core part of their Employee Assistance Programmes. Why? The reason is both simple and complex.

On the face of it, employees ask for financial well-being talks. In a 2016 survey undertaken and published by MoneyWhizz, over 90% of responders, all of which were in PAYE employment said they would benefit from the inclusion of financial well-being seminars as part of their employee assistance programmes.

Employers have also come to understand the benefits of including aspects of financial well-being in the workplace. Especially popular are seminars that are designed to inform employees.

But what is financial well-being?

In a nutshell and at its simplest, financial well-being is where a person can be aware of and be prepared for a range of life events, including:

Loss of income – the vast majority of people are vulnerable to a loss of income at some point in their lives. This happens on retirement from work. However, it can also happen on the arrival of a new child, where a parent may decide to take time out of work. Or, it can happen where employment ends, or where a parent becomes ill and needs constant care. The reasons are many but the outcome is almost always the same; reduction of income that can have a significant income on household income.

Loss of health – aside from the potential loss of income an individual may suffer (unless they have generous protection in place), the loss of health is often the main driver of severe financial difficulty.

Life events – the big life event is marriage / relationship breakdown. It can have a catastrophic, negative impact on the financial well-being on those affected.

In the case of the first two influencers; income and health, people can plan and have some buffers in place to protect their financial well-being. In the case of the third, information is key.

Enjoying life with an eye on the future. In many of the talks that I deliver on financial well-being, some people may feel that it just a budgeting exercise. How to save for a rainy day. This is not entirely accurate. Yes, personal budgeting, setting-goals, learning how to have incremental successes are important ingredients, so too is examining one’s relationship with money and marrying this with their future financial needs (and expectations).

In a recent talk at a large employer, when approached by one of the attendees, a career worker earning little over the average industrial wage, I felt a little like a teacher about to grade a homework assignment. The employee, nudged on by a caring co-worker asked my advice on what they should do with their life.

“I want to start to learn how to save” she whispered.

“O.K, why do you want to save” I asked.

“Well, I just came back from a three-week trip and spent €8,000. I love my trips but I have no money left and I want to be able to travel when I retire from here” was her reply.

And this is precisely what financial well-being is. It is about preparing the ground today, to enjoy life today but to set the scene to have enough income saved to enjoy life in the future also. And to achieve this, a whole-of-life approach needs to be put in motion.

Financial well-being talks are free to select employers through our various partners.

Frank Conway is a Qualified Financial Adviser and Founder of MoneyWhizz.org. He is author of Ireland’s Essential Guide to Personal Finance.

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