Invest in your financial well-being
November 1, 2018
By Jane Rooney, Canada’s Financial Literacy Leader
It’s the start of Financial Literacy Month! This year’s overarching theme is: Invest in your financial well-being.
Greater financial literacy at all stages of life can improve your financial well-being, and also your mental and physical health.
But what exactly do we mean when we talk about financial well-being?
Financial well-being is reaching a state where you:
- Have control over your day-to-day, week-to-week and month-to-month finances
- Are able to absorb a financial shock
- Are on track to meet your financial goals and
- Have the financial freedom to make the choices that allow you to enjoy life
Research shows that achieving financial well-being often leads to reduced stress, and greater mental and physical health.
Research also shows it’s best to deliver financial literacy to people where they are, and most adults spend most of their time at work. So the workplace is an ideal place to learn about money and improve your financial well-being.
The need for financial literacy and achieving financial well-being has never been greater. I say this for several reasons.
First, Canadians are carrying high debt levels – which can cause financial stress, especially as interest rates rise. At the same time, we live in a rapidly changing digital marketplace, where we make fast decisions about our money, and where financial products and services are increasingly complex.
In addition, study after study shows that money is the greatest source of stress in our lives, consistently ranking higher than health, work or family obligations. A survey released this fall by the Canadian Payroll Association bears this out. It shows:
- 40 percent of Canadians feel overwhelmed by their level of debt, up from 35 percent last year
- 44 percent admit they would find it difficult to meet their financial obligations if their pay was delayed by even a single week and
- 35 percent spend all of – or more than – their net pay
In fact, employees with higher financial stress tend to be absent more often and tend to be less engaged when they’re at work. They often spend part of their working day dealing with financial problems, which can affect their health and wellness, as well as their productivity.
Workers with high levels of financial stress are twice as likely to report poor overall health.
And the fallout of financial stress not only affects productivity and health. It can also impact an organization’s bottom line.
A 2016 study by the International Foundation of Employee Benefit Plans found financial stress can affect everything from attendance to turnover and morale.
The good news is that employers are in a unique position to help their employees improve their financial well-being, and the results benefit everyone.
So how can you start investing in your financial well-being?
I always suggest people start with a budget. A budget is the foundation of financial well-being. It’s a simple but highly effective way to make sure you live within your means, and it allows you to have control over your finances.
Having a budget that lays out sources of income and monthly expenses can help you commit to a spending plan, determine your needs versus wants, and set priorities for making purchases.
FCAC’s online Budget Calculator is a great tool to help you manage your finances. It will help you identify where your money comes from and where it goes. This can help you figure out your priorities, where to cut expenses, and how to increase your savings.
FCAC’s Canadian Financial Literacy Database is a great way to find resources, events, tools and information on budgeting, money management, insurance, saving, investing, and taxes from various Canadian organizations.
You can also encourage your employer to check out our free, unbiased tools and resources, including our educational programs. Our Workplace Financial Literacy Page is specifically designed to help employers who want to offer their employees a financial well-being program, or improve on their current program.
Some employers are already helping millions of adults understand their company benefit programs, compensation and other benefit saving vehicles. Financial literacy can be integrated into the workplace with pension and benefit information, delivered through human resources and employee assistance programs, or offered as training.
It pays to invest in your financial well-being. Visit our Financial Literacy Month website and follow us on social media to learn more.
And stay tuned for next week’s blog!
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