Financial wellbeing: Why it’s essential for mental health in the workplace
If one part of your car isn’t working well, it naturally affects the whole car's performance. Similarly, if one aspect of your life isn’t going well, it affects the other parts as well. To live a healthy life, one needs an overall holistic growth that includes physical, mental, social, spiritual and financial aspects.
According to research, 60% of the people are reported to be under money stress which is directly impacting their workplace productivity. So, there isn’t any doubt that the financial wellness of your employees is an essential element for your business.
However, often people confuse financial wellness with just earning more. It isn’t about earning more money, it is about managing and investing it well and according to your future goals.
Let’s discuss in detail the different aspects of financial wellbeing and how it can be managed.
Connection between financial wellbeing and mental health
Mental health and financial wellbeing are two important aspects of our lives that are often viewed in isolation from each other. However, the truth is that these two elements are deeply intertwined.
When mental health suffers, financial decision-making becomes compromised. Stress clouds judgment, making individuals more prone to impulsive purchases and poor financial choices. Conversely, financial anxiety creates a significant mental health burden. The constant worry about money triggers a cascade of physical and psychological responses: elevated blood pressure, persistent headaches, low energy levels, and increased anxiety. These health issues then require medical treatment, creating a never-ending loop.
On the other hand, if you are financially doing well then your emergencies turn into inconveniences. Got a flat tire? Call the mechanic. Kids broke the window while playing? Call the handyman. The out-of-blue expenses become less of money stress and more of part and parcel of life.
Importance of financial support programs at work
Organisations are recognising the crucial role financial support for employees plays in maintaining the overall wellbeing and productivity of their employees. Financial stress can significantly impact an individual’s job performance, leading to decreased productivity, increased absenteeism, and decreased job satisfaction.
Psychological benefit: Increases productivity, focus and overall performance
We’ve all been there – that sinking feeling in the pit of your stomach when the bills pile up and the bank account runs dry. Financial stress can be overwhelming and debilitating, causing distractions that affect job performance. When employees are worried about their finances, their ability to focus and contribute effectively to their work diminishes.
So, by providing financial wellness programs, organizations aren't just offering a benefit; they're essentially purchasing enhanced mental clarity, focus, and organizational performance.
Strategic way of talent retention
In today's competitive work environment, companies are also in competition with each other regarding acquiring the best talent. So, providing them a comprehensive growth becomes essential to attracting top talent.
Companies that demonstrate genuine care about employees' financial health create an emotional bond that transcends traditional compensation packages. Employees are more likely to choose a company where the ecosystem makes them feel supported, deeply understood and valued.
Holistic risk management
Financial wellness programs are essentially sophisticated risk management tools for organizations. By proactively supporting employees' financial health, companies reduce potential downstream risks like:
- Higher turnover rates
- Increased healthcare costs related to financial stress
- Potential workplace performance degradation
- Higher likelihood of unplanned financial emergencies affecting productivity
Changing financial needs of the current generation
While a great retirement plan was attractive for an older generation, this new generation prefers to live in present. They aren’t seeking a benefit that they can enjoy after 60 years of working. They are demanding flexible hours, financial support programs, mental health leaves and many such things that older generation didn’t even think about.
Organisation culture and branding
The culture of an organisation can make or break the branding of it. In today’s time, brand value is an essential element of an organisation as there are multiple brands for the same product or service. So what unique you are bringing to the table is an important differentiator.
Currently, there are some founders, asking to work 70 hrs a week and others are calling work-life balance is good for their competitors, you can stand tall in the sea by offering what your employees are in dire need of and financial wellbeing is one such thing.
Tips for managing financial anxiety and free resources
The best way to manage any stress starts by trying to remove it as much as you can and dealing with the rest. It is especially true in the case of tangible stress like finance which can be reduced by efficient financial planning.
Here are some ways to deal with financial stress:
Talk about your finances with your well-wishers
There is a certain taboo attached to financial talk. People want to hide it, especially from their close relatives. Fathers in Indian households don’t prefer to talk about money to anyone. This traditional way of living is making it suffocating for one person to deal with it all.
Coming out of our shells and breaking these barriers is the first step we should take towards healthier and sustainable financial wellness.
Managing your finances
What gets measured, gets managed. Start with recording your expenses, plan ahead about the near future expenses and go as nuanced as you can. Don’t just categorise it as, “food” and leave it there, make subcategories. Create your monthly and yearly budgets and stick to them. Finally, review your records and make the required adjustments according to them.
Financial wellness program
The financial wellness program goes beyond traditional budgeting. It's a comprehensive strategy that integrates psychological resilience with financial planning. Think of it as developing a personal financial immune system. Just as a healthy body can resist diseases, a well-structured financial approach can mitigate economic uncertainties. This involves not just saving money, but creating multiple layers of financial protection.
Key intervention points include:
- Developing an emergency fund that acts as a financial buffer
- Creating diversified income streams
- Implementing risk mitigation strategies
Stress management techniques from free resources
Financial stress is fundamentally a psychological challenge manifested through financial anxiety. So, ways to deal with it also include similar ways of dealing with any stress. It is recommended to meditate, exercise and eat a healthy diet to reduce stress levels in the body.
You can use YouTube and free meditation or yoga applications to start this journey of a healthier tomorrow.
Free resources for financial planning
In this digital age, there are some great YouTube channels and social media accounts that provide valuable financial information free of cost. Having said that, please be cautious while taking any advice.
You can also take free courses for financial education. It is an ongoing learning process. Keeping yourself updated with new information helps you make the right decisions.
Managing financial stress begins with understanding the intricate relationship between psychological wellbeing and monetary health. The human brain processes financial uncertainty through the same neural pathways that trigger survival responses, which means financial stress can be as physiologically impactful as direct threats to personal safety. Hence, managing it is essential for a healthier future.
FAQs
How Can a Small Company Implement a Financial Wellness Program?
Start by surveying employees to understand their financial needs. Provide free educational resources, offer flexible work options, integrate financial stress management into wellness programs, and create a supportive environment that normalizes financial health discussions.
What Should Be the First Step Towards Financial Wellbeing?
The first step towards financial wellbeing is asking employees what they want. This means breaking down communication barriers and creating an open, non-judgmental environment where employees can honestly share their financial challenges and needs.
