• George Callaghan

Overdrawn and overwhelmed: how money worries impact workers


A recent Forbes article illustrates the powerful impact concerns about money can have on employees. In fact, they write that more than one third of US employees believe money worries have a detrimental impact on their lives.

What about in the UK? A 2017 Global Attitudes Survey describes how a sizeable minority of employees believe money concerns affect their work, feeling highly stressed about money and that money worries cause them to be absent from work and to consider working beyond the age of 70,

.

What might be the be causing this surge in money concerns? It is a mix of large scale social and economic change combined with local labour market conditions. Since Reagan and Thatcher instituted a turn to extreme liberalisation in Western economies in the early 1980's, more and more financial decisions have shifted from large institutions such as government and employers and onto individuals. Examples include students wishing to increase human capital, with reports that UK student loans are in excess of £100bn. Another example is in the areas of pensions. While there is more choice and autonomy in selecting a financial product the risk of getting sufficient income in later life rests with the individual.

At the same time deregulated financial markets and hyper consumerism have combined to place pressures on individuals and households to seek immediate gratification - often leading to a higher use of credit cards and other forms of debt.

In terms of local labour markets, competition and the need for profit (or in the public sector minimise costs) mean wages are not keeping pace with inflation.This has meant a decline in individual and household disposable income and also contributes to the rise in debt and reduction in the capacity to save.

So far, so depressing - but is there sunshine behind the clouds? I believe there is, and that policies, tactics and strategies exist which can shift at least some of workers' money worries.The starting point of change is to empower employees, so they understand more about money and, crucially, increase their knowledge about their attitudes to and behaviour around money. In the US Maria Nemeth has been writing for some years about how individuals can better understand (and therefore influence) their emotions around money. In the UK, Simone Gnessen has led the way in developing money coaching, where individuals are supported in developing their practical money skills and in better understanding the behavioural patterns behind money. What sets these approaches apart from more traditional financial advice is that it seeks not to sell financial products but rather to empower individuals to make better informed financial choices and to shape more sustainable financial habits.

At a government level there have been various attempts at improving financial capability and there are frequent calls to squeeze classes into an already pressurised school curriculum. Employers, both public and private, are also taking steps to address this issue through financial wellness programs and other initiatives to address workers' money concerns.

But more can and should be done, the challenge facing employees and citizens in navigating the complex world of personal finance decisions is immense. Some have a very basic map of the financial terrain - what is needed now is for individuals, employers and governments to come together to flesh out this map in detail and help colleagues understand and navigate through this complex terrain. Financial education through financial coaching can make an important contribution to this mission by helping employees become less stressed. This in turn might create conditions which release creativity and productivity.

#financialeducation #financialcapability #employeeperformance #financialcoaching

 

 callaghanfinancialcoaching@gmail.com 

Telephone: +44 (0) 7814 928757 

  • Twitter
  • YouTube
  • LinkedIn

 

  

© 2020 Callaghan Financial Coaching. All rights reserved.

Callaghan Financial Coaching Limited is a company registered in Scotland with company number SC593933