Improving financial wellness: Seven steps to getting ahead

New statistics reveal financial stress has cost an annual $31 billion in lost productivity – and women are among those hardest hit.

The research by AMP found 1.8 million Australian workers felt severe and moderate levels of stress over their finances.

As well as an increase in sick days, financially stressed employees waste around 7.7 hours a week because of their money worries.

The statistics paint a harsher picture for women who are more prone to financial hardship.

One in five female workers reported severe or moderate levels of financial stress in 2020, compared to almost double that figure for men (11%).

So how can HR initiatives combat this growing problem?

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AMP director of workplace super Ilaine Anderson said developing targeted education programs is one way to address the gender imbalance.

One example is the important role financial education plays for pregnant women.

“Women are more stressed about their finances in the months leading up to having a baby, than they are a year after the child is born,” she told HRD.

“Many expectant mothers are confused about parental leave policies and what they are entitled to claim.

“This makes budgeting and planning-ahead difficult – causing significant financial stress. Programs designed around cashflow management and budgeting for expectant mothers are highly beneficial for women.”

Women are also more likely to retire with less super than men, another factor that causes increased financial stress.

Education programs around how to boost super are therefore another key resource for women.

Financial education is one of the most used employee benefits when workplaces offer a designated program to their staff.

But only 10% of surveyed workers had access to employer driven initiatives to help them become financially stable.

Read more: 70% of employees worry about money at work

Seven tips for improving financial wellness

1. Take action: Utilise online resources and education programs provided by your employer to improve your understanding of key financial drivers, including superannuation, debt and cashflow management, insurance and investment principles.
2. Set goals and put a plan in place to achieve them: Connecting finances with goals helps us engage with our finances, and then having a plan to achieve these goals can significantly ease stress.
3. Create a budget that works for you: Writing up a budget may take an afternoon out of your diary, but it will help you to more easily identify where there’s room for improvement. Then use one of the many budgeting apps freely available to track progress.
4. Consider rolling your debts into one: Combining multiple debts into a single loan can reduce fees and interest. It also provides greater visibility and control over your finances.
5. Set aside some emergency cash: An emergency resource of funds could give you peace of mind and reduce the need to apply for high-interest borrowing options should you be faced with an unexpected expense or new circumstances. 
6. See if you can get a better deal with your providers: You more than likely have several product and service providers, and savings can be made by switching providers, which over time can amount to considerable benefits. 
7. Don’t be afraid to seek financial assistance: If you are struggling to make repayments, you may be able to seek assistance from your providers by claiming financial hardship. All providers must consider reasonable requests to change their terms in instances where you may be suffering genuine financial difficulties. In addition, you can talk to a financial counsellor (free of charge) at the National Debt Helpline by calling 1800 007 007