Financial Stress – Is it Contagious?

By guest contributor: Darren Smith, Managing Director, Financial Advice Matters

Just like the common flu, financial stress and poor habits can be caught by those that we are connected to. If left unchecked, it can have a significant impact on our mental health and productivity at work.

Progressive leaders are increasing financial literacy support. The conundrum that exists is where we know that wellbeing professionals are increasingly aware of the widespread impact, but there still appears to be a lack of action.

The window of opportunity is now, whilst in the middle of a cost-of-living crisis.

Most organisations have good intent, and lead with value statements like:

• Our people are our greatest asset
• We are focused on our team’s holistic wellbeing
• We want to support a diverse and inclusive culture
• We want to support our teams with the cost of living

Despite these words being loosely used and proclaimed to be important by organisations, many safety, wellbeing, and HR leaders are not being resourced to deliver real support on financial wellbeing.

Financial literacy was, for many years, seen as a nice thing to have and something that the employee needed to sort themselves.

However, organisational leaders can no longer ignore the research showing a strong link between those that suffer financial stress and poor mental health. Those who have mental health issues are twice as likely to suffer from financial stress, and vice versa (Beyond Blue.,2022).

Also released in the Australian State of Financial Wellbeing report from 2022, it highlights the reality for many and the potential impact on retention:

• Almost 30% of employees run short of money for food and regular expenses
• 1 in 2 employees would “think more favourably of my employer” and “be more likely to stay with my employer” if they were offered financial wellbeing tools

There is also research around productivity. AMP’S 2020 Financial Wellness research suggests that those financially stressed are ineffective at work for approximately 7.7 hours a week and absent for a further 1.2 hours a week through sick days.

So, why are more organisations not further advanced? Prioritisation, politics, and budget are common responses.

Solutions offered need to provide choice, access, and mindfulness of some of the common reservations surrounding talking about money.

The reservations that most often come up are:

• Fear of embarrassment, or being compared
• Fear of judgement
• Shame
• Concerns over been sold to

Lifting the veil on talking about money does get to the central role it plays in our lives. We acknowledge that several organisations have taken positive steps. We have seen through our engagements a combination of broader support blended with tailored programs targeted at specific employee segments like those new to the workforce and those who are closer to retirement. Solutions have included static data and resource sharing, interactive workshops and video content, and peer group discussions.

It takes time and effort to create that safe environment.

The reward will be more team members feeling more connected with the organisation.

Sources: AMP’S Financial Wellness research, 2020 Australian State of Financial Wellbeing report, 2022 Beyond Blue, 2022

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication. Whilst all care has been taken in the preparation of this material, it is based on our understanding of current regulatory requirements and laws at the publication date. As these laws are subject to change you should talk to an authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly neither Alliance Wealth Pty Ltd not its related entities, employees or representatives accepts responsibility for any loss suffered by any person arisingfrom reliance on this information. Corporate Authorised Representative No 1234989 of Alliance Wealth Pty Ltd AFSL 449221 ABN 93 161 647 007

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For a sneak peek at our Q&A Blockbuster with Darren please watch this short video where he discusses the benefits of organisations supporting their employees wellbeing in times of financial stress:

For more insights into financial wellness work, don’t miss our recent chat with Darren Smith and Cara Williams, Head of Safety and Wellbeing at Bolton Clark as part of our exclusive The Hub Q&A Blockbuster here.

Darren Smith, Managing Director of Financial Advice Matters

Darren has 30+ years’ experience in the financial services industry working both domestically and overseas (UK). He has a background in finance and strategy roles at senior levels as well as sales development leadership roles. Darren holds a Masters of Business Administration, A Graduate Diploma in Insurance and a Bachelor of Business in Accounting. He is also a Fellow Certified Practicing Accountant (FCPA) and A Fellow of the Australian and New Zealand Insurance Institute. Darren also led the creation of their Financial Wellness Program for organisations and their employees.

LinkedIn: Darren Smith

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