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5 top tips to help employees understand the basics of personal finance

‘Money talks… but all mine ever seems to say is good-bye!’

I love this one-liner, but would love it even more if it was to be re-written as follows:

‘Money talks… I have so much, it sounds like a football crowd chanting!’

One of the key aspects of financial education is helping employees to understand their own personal financial journey. There is a general consensus that there are three pillars of wellbeing in the workplace: physical, mental and financial. Many employers have grabbed hold of the first two and are seriously addressing the third, with interest in the latter rising rapidly. All three pillars are, of course, intrinsically linked – financial issues can lead to stress and emotional problems, which in turn can lead to physical problems.

Employers who are actively addressing employee financial wellbeing have discovered that their people respond extremely positively to the idea of gaining control of their finances. This was evident recently when running two very different ‘lunch and learn’ sessions during an employer’s wellbeing week. The first: the 5 As of financial fitness, the second: pre-retirement options. The audience could not have been more diverse in age, profile and gender; all were hugely enthusiastic and eager to learn.

So, here are five tips on how to help employees understand the basics of personal finance:

1.  Start at the beginning

Any journey needs to involve getting from A to B. Help your staff assess where they are now. Are they ‘financially fit’, and what exactly does that look like? Do they understand how to get debt under control?

2. Keep the tone and pace busy

A basic personal finance session audience is normally quite young, so ponderous technical sessions will go down like a cup of cold sick! Although this doesn’t necessarily mean that the presenter has to be young. My greying temples have yet to kill a session, according to the feedback!

3. Make it memorable

For example, we use ‘The 5 As of financial fitness’:

  • Accounts – teaching how to budget, balancing income versus outgoings, wants versus needs.
  • Ambitions – identifying financial goals, recording them and planning how to meet them.
  • Action – there’s no point targeting some ambitions and then doing nothing about it; how to make a plan a reality.
  • Advice – seek ways to self-serve first, but also know how to get qualified experts when you need them.
  • Attitude (to investment risk and volatility) – know what your own tolerance levels are for each savings ambition, as they may have different priorities and timelines.

4. Keep it short

These sessions should be kept to a maximum of 45 minutes. Attention spans tend to wane around 30 minutes, so make it punchy at the start, hold the audience for 30 minutes or so, and then close with a big finish.

5. Make it relaxed and funny

I often ask attendees what they would do with a £1,000. The answers have ranged from buying a shark, girlfriend or kebab van, to building a deposit on a flat or paying off debt. Some of these answers were given by school and college students. However, the themes are generally consistent all the way up to age 30. The exercise was to identify and agree want vs need as part of budgeting and planning. It’s always good fun and relaxes the room early on.

Finally, it is crucial to get participant feedback. This helps inform on the mood of the recipients, to gather freehand commentary (good and bad) and to assess the effectiveness of the session(s). Future improvements and tweaks can then be made, to ensure your financial wellbeing programme gets better and better.

Helping your employees improve their financial knowledge and understanding can deliver significant business benefits. Ultimately, if people feel in control of their finances, they bring less money-related stress to work, and are happier, healthier and more productive. It’s a no brainer!

This article was originally published on the REBA website – 9 October 2017

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