Saving is hard work for a lot of us (In fact, 16 million people in the UK have less than £100 in savings!) – it’s much easier to spend money than it is to save it! This is partly down to education, partly down to mindset, and unfortunately, partly down to circumstance in certain cases.
When you haven’t ever saved before, and spend loads more than you earn, you have the even more difficult task of paying off debt AND trying to save AND living your life all at the same time.
It isn’t easy and requires some very tough choices, but it is do-able.
Money Stress In The Work Place
When we have problems with money, it follows us everywhere. It’s on our minds 24/7. If things are really concerning, it can even start to affect our work, and this can lead to even more stress and worry. So considering the fact that we spend half our lives working, should our employer be doing more to help?
This week’s post is all about how employers can be doing more for their staff financially other than just give them an income. 46% of employees WORRY about their finances and 20% of employees say that their financial situation AFFECTS their work. So whether you agree or not, I think if employers want happy employees, then helping them is essential!
Whether you’re an employee or an employer – there will be some ideas her that you could take forward to YOUR place of work and start helping with the paycheck to paycheck cycle that is leaving thousands of people stressed and broke. Less stress means more engaged employees who are happy and focused on their work rather than on their money worries.
Use Credit Unions
A credit union is a not-for-profit organisation that helps people to save money, and they also provide loans that anyone can tap into in their local community. They are owned by members who join as borrowers and savers. The members can then make decisions on how the union distributes dividends on savings etc.
The money saving expert has a wealth of knowledge in this article for you. There are over 300 credit unions in the UK all offering slightly different options and are open to different people. Employers can also access credit unions to help their employees pay off their debts and save a rainy day fund.
An example of this would be the company FairQuid. The way that FairQuid assesses you for lending money is by looking at your salary, how long you have been working at your company, your performance working there, and what your affordability overall is. Many other credit unions would simply use your credit score, and because this is based on PAST mistakes, they saw this as quite an unfair process because it put barriers up for accessing affordable credit. The only alternative then is to turn to “payday” lenders which is in nobody’s interest except the payday lender.
To pay the money back, it is deducted from your monthly wage, so there’s no risk of missing a payment.
The best bit I think, is that the amount you borrow includes an attached savings amount that doesn’t go towards paying off the debt, and at the end when you’ve paid off the loan, you’ve also got some savings! This improves your chances of staying out of debt once and for all (providing you change your mindset and don’t splurge the money at the end)!
What you choose to do next depends on your future plans, but if you haven’t missed the money, why not just continue saving it?
Another fab thing about credit unions is that by being part of the club, you are helping others access the credit they need to get out of debt and save with a purpose!
I had a lovely guest post earlier in the year about how employers can help their staff with financial education in addition to their salary to try and help reduce their stress around money. I wanted to take a deeper dive into that concept.
Research shows that people want more education from their employer:
“The workplace is the ideal environment for many people to access financial advice and guidance and so ideally, going forwards, more employers will offer this as part of their overall benefits package.”
But how would it work?
Well according to employee benefits, the financial education advice that should be provided, should be tailored to what their employees want, and include specifics on the work place pension and other benefits included in their packages.
I wholeheartedly agree with this, and certainly think that the work place pension is a massive source of confusion and anxiety for people – and when there is lack of understanding, there is lack of interest, and the temptation to opt out is high.
We’ve all been opted in to work place pensions now since 2017 (many were way before this). The amount of money that employees are expected to contribute varies, but the absolute minimum is 2.4% currently, rising to 4% in April 2019. Your employer and the government then tops this up to make it 5% overall, rising to 8% in April 2019. This is the minimum (and is still quite low in terms of how much people should ideally be saving for retirement).
As the government increases the minimum amount that people need to pay towards their pension, my worry is that more people will opt out due to the pressure it puts on their already stretched finances. By opting out, a person will be putting themselves at long term financial risk for short term gain. This is the kind of information that needs to be shared by employers so that people are making informed choices about their finances.
I don’t have children yet, but childcare problems are a concern for so many of my friends – especially those employed in the medical field. Many women are being forced into doing jobs that are more “child friendly” even if it isn’t their original passion. I remember at medical school being told by a fellow student that I would be better off becoming a GP, because obstetrics and gynaecology wasn’t suitable for a woman wanting a family.
The fact that I chose to become a GP later in life has nothing to do with childcare, but everything to do with the way I wish to live my life in the future. If children come along, great! If they don’t, it’s ok, because I haven’t been forced to choose a career because I might want children “one day”.
And this is where I think employers can do so much more to help.
Employers for childcare released a report that states that:
“91% of respondents commented that it is difficult to combine work commitments with family responsibilities, while 77% agreed that it was more difficult to progress or develop a career after having children.”
With stats like that, employers should be sitting up and taking note – ESPECIALLY in light of the gender payment gap that has been heavily highlighted recently. In their report, 40% of people surveyed said that parenthood was incompatible with senior roles of responsibility.
Childcare vouchers are a way that employers for childcare suggest that employers can help their staff to return to work and reduce the stress of funding expensive childcare costs. Not every employer subscribes to the scheme though, and unfortunately, this scheme is closing to new applicants from October 2018 (so if you want in, convince your employer now!). Instead, the government is moving over to tax-free childcare. You might want to have a read if this applies to you. As always, the money saving expert has a great guide.
This is the sort of information employers need to inform their staff of!
I certainly think there is scope to be joining forces with local nursery schools, or even creating a nursery on site! For companies that insist they cannot afford onsite nursery school placements, then perhaps a policy of “bring your baby to work” would be popular.
So there you have it, three ideas for how employers can help their employees out more at work to reduce their stress around money. I certainly think that our working lives would be much better off if we had more perks and benefits like this. Perhaps it’s time for more pressure on employers to provide more than simply a salary and a mediocre pension plan?
I’d love to know your thoughts. Come on over to my free and private Facebook group or comment below!
Until next time,
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