With deep apologies to Jane Austen, but it is a truth universally acknowledged, that the majority of us folks are just useless when it comes to sorting out our own finances.
Recent ad campaigns hit the nail on the head showcasing embarrassed family members fidgeting nervously and mortifyingly silent when faced with having to discuss money. It’s 2019: we’re finally talking openly about (and challenging the status quo on) inequality on all levels, sexuality, gender, climate change and mental health, but our personal financial worries still remain taboo and deeply closeted. Why?!
Strange too, given that the correlation between mental stress and financial worries is undeniably linked and widely documented. But here we are, not in Austen’s Regency England, but in the modern-day UK, recovering from a truly global financial crisis that hit everyone hard – with all the information at our fingertips – and we’re still not talking about personal financial stress. We’re painfully aware that control of our finances is now in our hands – we can access our bank account online 24/7, we’re bombarded with information and comparison sites for everything from insurance to supermarkets, and some of us even understand what quantitative easing means when the Bank Governor speaks on the news.
But bizarrely very few of us know exactly how much we’re spending every month. We freely admit over a cuppa in the office kitchen our Brexit views or how great our therapist is, but would never mention that we’re worried about not making the mortgage payment this month. The stigma remains. Expensive debt has become a painful solution: the scourge of the Pay Day loan is attractively prevalent, credit cards mount up, saving for a rainy day (or any day for that matter) no longer matters and a downward debt spiral begins.
But there is genuine hope: financial wellbeing is definitely joining mental health and physical fitness as a key pillar of the definition of “wellness”. Basically, it’s good to talk. The cult of celebrity oversharing helps in this instance. The increasing normality (at last) of openness to discuss mental and physical health is paving a way for reducing the shame of admitting financial worries. “Spend less than you earn” should in reality become an Instagrammable life hack as easy to post as “Eat healthy, exercise more”. Fingers crossed the powers that be will realise we need financial lessons as early as school. It seems to me that a quick 101 on how tax works, what on earth a mortgage is, instilling an ethos of saving and financial security and other horrid, grown-up evils is better preparation for life than algebra?
Educate to Empower
What do we really mean by “financial wellbeing”? It’s about controlling your day to day finances and making ends meet, paying off debt and but also the ability to absorb an unforeseen cash shock. Financial security takes into account short, long and lifetime goals, from saving for a property deposit to retirement planning, as well as the freedom to choose some of the fun things in life along the way and not be financially constrained at every turn.
Employers are getting there. Financial resilience of their staff is increasingly high on their agenda – it affects recruitment, retention, engagement and productivity. The old days of only offering the workplace pension are behind us. The way we work now has of course changed significantly: non-traditional, flexi-time/part-time/self-employed incomes are more unpredictable than before. This has also exposed a major generational divide as the cost of living rises, the property markets spiral out of reach and unrelenting social pressure to lead a certain lifestyle weigh down on the beleaguered millennial.
I’m convinced that a huge part of the answer lies, as with many of today’s problems, in education. Many aren’t sure who to turn to for financial advice and improving accessibility to that counsel is key for this change.
The advice is out there.
Start with your employer. Be open and honest with yourself as much as with them. You may be unaware of the financial advisory services you’re eligible to receive as an employee benefit – confidential, face to face advice by specialists or external consultants is increasingly offered to staff. According to Close Brothers Asset Management, 52 per cent of employers offer a financial wellbeing strategy, and 27 per cent plan to implement one within the next three years. Many offer salary sacrifice schemes, budgeting or debt consolidation advice along with pension planning. Take advantage of free workshops, webinars and external, unbiased financial coaching if offered on your benefits platform – might not seem as instantly appealing as 50% off a facial or free yoga class, but it will do more for your wellbeing in the long run to be informed, interested, and in control of your finances.
Equip yourself with the tools to learn about the financial subjects relevant to you: guidance on saving, budgeting, homebuying, investment, forecasting your financial future, pensions and many more. And not an excel spreadsheet in sight: many will revel in the sheer numbers of budgeting / financial planning /savings apps out there. Download away as they help you stay on track and help you plan goals and assess your ability to achieve them. Budget calculator apps, bank account alerts etc. all help with that all-important self-discipline.
Educate yourself! Genuine advice from trusted sources is readily available online, as surprisingly, the internet is not just for shopping. Find out about savings vehicles and your tax saving allowances, learn how to budget.
Be proactive, investigate, and take decisive action to enhance your financial wellbeing. It will win over Mr or Mrs Darcy when they come along!
Lucy is Co-Founder of StepLadder and Head of the Membership Team. She is also a professional coach who loves helping people achieve their goals.