Better Being Series: Improving Your Financial Wellbeing

Better Being Series: Improving Your Financial Wellbeing
Aon's Better Being Podcast

04 of 12

This insight is part 04 of 12 in this Collection.

September 23, 2024 20 mins

Better Being Series: Improving Your Financial Wellbeing

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Our Aon expert and guest steps and strategies for employers and colleagues to improve financial wellbeing.

Key Takeaways
  1. Discusses the role of the workplace in cultivating healthy financial wellbeing.
  2. The episode shares strategies for supporting better employee financial wellbeing.
  3. They define financial wellbeing as it relates to happiness.

Intro:
Hi everyone, and welcome to the award-winning “On Aon” podcast, where we dive into some of the most pressing topics that businesses and organizations around the world are facing. This week in a special series on resilience called Better Being, we hear from Rachel Fellowes, Aon’s Chief Wellbeing Officer with her guest, Bobbi Rebell, on financial wellbeing.

Rachel Fellowes:
Hello, and welcome to Better Being With me, Rachel Fellowes. I'm the Chief Wellbeing Officer here at Aon, and unsurprisingly, I'm passionate about wellbeing and human sustainability in the workplace. Globally, an estimated 12 billion working days are lost every year to depression and anxiety out of a cost of about $1 trillion per year. Curiously, only around 30 percent of us around the world identify as resilient, and burnout is also on the rise everywhere. So as a result, wellbeing has quickly moved to the top of the company's priority lists, with 83 percent of companies now saying they have a wellbeing strategy in place. How companies prioritize and integrate wellbeing can have a profound impact on employee engagement, talent recruitment and retention, as well as overall business results. So, it's more important than ever that we get this right. And wellbeing strategies? we're learning includes typically physical, emotional, social, financial and career elements, and also a growing movement towards team and organizational wellbeing.

So, in this series, I take a look at what makes for better being at work with thought leaders and subject matter experts. In today's episode, we're talking about something which I don't feel is talked about enough in the context of wellbeing, and that is financial wellbeing. When most of us talk about this topic, it's easy to focus on physical and mental elements, and we often forget the key role that financial wellbeing plays. So, hear me out on this one because it's a bit chicken and egg, isn't it? Because financial difficulties often cause stress and anxiety, and vice versa. And the stigma around debt can mean that people struggle to ask for help and may feel incredibly isolated as they do so.

And financial difficulty can also drastically reduce the recovery rates of common mental health conditions such as depression and anxiety. And there are some really strong statistics coming out of the UK whereby people with depression actually are 4.2 times more likely to have problems with debt and still suffer from depression 18 months on as a result of that interconnection. So, I'm absolutely delighted that with me today to discuss financial wellbeing is Bobbi Rebell. Bobbi is a financial wellbeing expert, educator, and advocate. She asked me not to say influencer, but I think she is one of those two. And she's also an author and journalist and founder of Financial Wellness Strategies. So, Bobbi, thank you so much for joining us today, and welcome to the show.

Bobbi Rebell:
Thank you so much for having me. And I want to commend that introduction because what you've done is really make a very specific connection between different kinds of wellness and how they all intersect each other. And that is essential because people tend to put money in a box as a very separate thing, but in fact the connection is very real. And we're going to talk more about that, so I'm looking forward to our conversation.

Rachel Fellowes:
Well, I absolutely love that you're going there already. You're making my life easy, because I know we're going to touch on three specific points. So firstly, just making sure we understand what financial wellbeing is because you and I, in particular, are probably experts in throwing terms around. But if people aren't resonating with it, let's dig into that a little bit more to start with. And then I'd also love to understand almost that transition to the reality is, Bobbi, most of our people listening today are probably working. They're in the workplace. So how does it actually translate into something meaningful for colleagues, people that work in whatever format that looks like nowadays? And then lastly, I know we're going to get an even more granular to say, what can we do as individuals? And if we happen to have a hat of responsibility around financial wellbeing in our organizations, what can we do under that hat too? So, what exactly do we mean by financial wellbeing, and how did you personally become interested in this?

Bobbi Rebell:
Well, what we mean can vary by each person, and I think you outline that very well because we all can have different definitions of financial wellness at different times of our lives. So financial wellness, in my opinion, for me, and this may relate to other people, is about feeling in control of your money and your financial situation. And to some degree, it almost doesn't matter what the actual reality is at the moment. Now why do I say that? Well, because someone can be financially healthy and have very little money because they are in a state of balance. They're able to pay their bills, they're able to have some discretionary spending, they have an income level that they are at peace with. So that might be someone who is financially healthy, that feels they're in a state of financial wellness, words we know of many very unhappy people that have all the money in the world.

Money cannot ultimately make an unhappy person happy. That said, and this gets interesting, and we can't go into too much detail in this podcast, but there have been studies that have said this. It seems like an arbitrary benchmark. When this study I'm going to reference came out, it was $75,000. And I apologize, I'm in the US, so I have this in dollars. It's now 108,000 if you adjust for time. After that, there are very diminishing returns for happiness. That was actually found to be very faulty because the study was made in a very linear way. The truth is more money, in most cases, for most people, does make you happier because money equates to choices. It equates to freedom, it means autonomy. And back to my original definition, it goes to control, and lack of money goes to anxiety and a fear of scarcity. So, we need to be honest about the fact that money does, in fact, buy happiness.

And once we come to grips with that and acknowledge that, even though it might not always be a popular thing to say, then we can finally focus on how wherever they are financially we get to a place where we feel financially healthy, where we do have financial It's a complicated thing. I've been asked recently to speak about something called money dysmorphia. You joked about me not wanting to be an influencer. Well, one of the things hopping around on social media these days is a term called money dysmorphia. So, it targets the disconnect between your financial situation and reality. So, we want to help people feel at peace for wherever they are financially, but also acknowledge that it is better for most of us to have more money. And to your point originally, more money can buy you better. Healthcare can buy you time, which is priceless and not infinite. It is something finite. You can always get more money; you can't always get more time. But with money, you can often create more time to build better relationships.

You asked me how I came to this. I came to this in my career as a financial journalist because I heard so many financial stories, in my coverage, of people that made decisions based on relationships to the detriment of their money. I remember one story where during a housing crisis, I interviewed somebody who was unapologetic that she was losing her house because what she had done was taken out a second mortgage, which led to money to pay for healthcare for her mother that saved her mother's life. She would make that "bad financial decision" many times over. So, it's a little bit complicated, but I'm fascinated by the topic. I'm fascinated by, candidly, my own failures with money and how that affects my relationships and the decisions that I make. And so, I wanted to explore it further, and I am hopeful that I'm helping other people as well as I go through my own journey.

Rachel Fellowes:
I love everything you've said. You've actually triggered two new thoughts for me, Bobbi, that I'd never actually connected the dots on. So, when you started to talk about freedom, choices, and almost the sense of empowerment that money gives you, if you then look at that generationally, the younger generations are really striving for new meaning and purpose. So that kind of connection there I found fascinating, we could dig into more. The second, you then also talked about this concept of control, my mind went to almost in an era of incredible uncertainty. And if you think about almost, how do we mitigate against climate change, and I know you've just moved state where there's increased climate change risks yourselves, think about almost our own, the longevity of our life and how do we sustain ourselves, not burn ourselves up.

So that might include self-funded sabbaticals and things like that. And also, how do we ride out phases like economic volatility like we're going through at the moment in particular in the UK. So, I really appreciate how connected and holistic your thinking is. It's really, really helpful to hear. I just move on to another thought around this then. So, in a sense, when we're thinking about the workplace, how important do you think the workplace is when we're trying to make progress happen, and in particular, having great conversations around this in the office itself, or virtual office in many cases.

Bobbi Rebell:
I think the workplace presents both a challenge and a huge opportunity, because at the end of the day, this is where we spend so much of our time and detention. And this is where, to some degree, we can be, and I cringe using the word authentic because I think it is overused so much these days, Rachel, but to be our authentic selves. Because for example, as a parent, you sort of have to, in many ways, because you want your children to feel safe, put on a brave face, even when you're worried about money. You have to do the workplace as well, but among coworkers and in a group setting, you might be able to be more candid. And so, I think it does present an opportunity and a place. It also is important for employers to understand that to get the best out of their workforce, which also includes retaining the people that you want to keep at the company long-term, it is something that makes a lot of business sense, which is why I'm so happy that you're drawing attention to this.

For example, I'm going to give you some stats that I wrote down just for you. A study from the Harvard Business Review shows that $150 billion in productivity was lost in a single year when employees came to work stressed, far greater than cost associated with even just missing work. And then we have another study from TIA Institute found that employees spend an average of eight hours a week dealing with financial issues, but four of those hours are occurring at work. Think about the cost of that. If you have, here in the US, a 40 hour work week, 10 percent of the time that you're paying an employee is spent dealing with financial issues. And according to PWC, 57 percent, so more than half of respondents identified finances as their top stressor. So, when you look at the Harvard study about stress, it's about money. That's what people stress about.

And here you go. To your point, most succinctly, even though 77 percent of workers view financial wellness programs as an important benefit, only 28 percent of employers are offering them. That's according to Transamerica Institute. So that's a lot of data, but I think it shows that the workplace is where we can really make an impact not only for the benefit of employees, but also companies benefit from this as well.

Rachel Fellowes:
I'm really interested in that stat around 77 percent into 28 percent because I'm also really curious, if I was just being candid, how many of us on this call, or are being prepared for that call that maybe work in a more traditional corporate environment, actually know what financial wellbeing benefits we've bought into? It'd be really, really interesting to understand.

Bobbi Rebell:
Yeah, so it is interesting. And so, I have my most recent book is called Launching Financial Grownups, and I've spent the last year speaking to groups about this. And it's interesting because the most common thing that people say to me when I'm done speaking is, "Thank you so much for this." Well, I'll tell you two things. They say, "Number one, I'm really bad with money, so I can't teach my kids about money, so I was hoping they would learn it in school." So that's a big pass the buck because they're not. And the school remembers only four years. In theory, a career at a company could, if the person's good, it could be a lifetime. So, where should this financial wellness come from? The best answer, and it's one of these both can be true, is everywhere, parents, school, and employer.

The reality is the parents don't feel qualified. The schools are very short term. They're not really stakeholders. So, it can fall to the employer, and that can be truly of benefit. The other thing that happens with the parents that I speak to is that they say, "Thank you so much. I love the idea of your book. I can't wait to hand it to my children." Now, why is this wrong? Because the book is written for the parents, or the grandparents, or the older generation, the aunts, whoever it may be that's in the child, the young adult's life. It is not for the kids. I wrote another one that's called How to Be a Financial Grownup. That's for the kids. And by kids, I mean young 20 somethings and older teenagers. So, a lot of it is pass the buck, they should learn it somewhere else. And so, by the time they get to a job to an employer, this is the time.

And the stakes are very high because what good is a 401k plan, for example, if they sign up, we now, 401k plan, I should say for those of you in the UK, that's a retirement plan that is contribution based. So, it's up to the employee to put money in. And very often, the employer puts in a match up to a certain percentage. And so now we have something whereby default, if you don't say anything, the employer will automatically, in many cases, start putting in, let's say 3 percent of the employee's salary when they sign on. Okay, great, but nobody is telling the employee, who's maybe 22, 23 years old, that they have to actually put it into an investment, or it won't grow. So, you run the risk of having these employees thinking that they are doing everything right and yet they are not because they're just putting it in basically a savings account. And the market here is up, I think about 12 percent the last year, or something like that.

So, this is so much money. And these are... I'm referencing young employees who have a long-term investing. So, it's really tragic when the HR people, whoever is deemed responsible, doesn't get in there with real financial wellness programs. The great challenge is that they're often offered "for free," and I'm putting up little quote marks because there's no video here, for free through the companies that offer these retirement plans, but they are really salespeople. They're not primarily educators. And that's basically... I don't mean to go into my own sales pitch, but that's essentially why I started my company, because I am only about education, versus these other companies, it's something that's an additional offering that comes with a price, and they're really selling their own offerings. And the employees don't react well to that because they know it's kind of a sales pitch from the company that runs their retirement plan.

So, it's important, I think. All this to say that employers really focus on being intentional with their financial programming, that it not be part of the retirement plan administrator, that it be something purely focused on education, ideally as an event driven thing so that employees pay attention, that it not be another to do task. Because if you send them to a video, you've given them homework, you've added to their job responsibilities. If you tell them, "We're giving you two hours off to do a workshop," you've given them a fun thing to do with their coworkers. Very different.

Rachel Fellowes:
So, can we get a little bit practical then and drill into all the magnificent thoughts in your brain? What top things should we be thinking about as individuals to support our wellbeing or financial wellbeing?

Bobbi Rebell:
Well, I think structured programs with accountability can be very effective. So, for example, having those conversations with employees, making sure that it is something that they will look forward to and that it is not a task, so anything that takes place in a group setting, especially if it's a repeated structured event. Because what happens with a one-off event is they get this great motivation and inspiration, and then they go back to work. But if they know that every month or every quarter, they're going to have something like that, that's going to be creating accountability with their coworkers. I also like the idea of having it live and having it be a place where they can have these conversations and be a little bit vulnerable. Because when you hear, I'll go speak to a group, and when you get the first brave person that raises their hand and says, "I don't know whether to pay off my debt or my student loan, my credit card debt or my student loan, but I want to save to buy a home. And I know I should be doing retirement. And where do I begin?" everyone goes, "Right."
"And then I'm being asked to donate to my friend's whatever, something charity." And you want to donate to the charity, and you want to do this, and oh my goodness. And that peer support is everything. It goes back to your idea about relationships, having those relationships and accountability and support. And we can get that through our coworkers, and it only helps bond people, especially when we still have so much work from home. And so even doing regular, I call them office hours, whatever people want to call them, virtual meetings where you answer specific questions, maybe the questions come in anonymously, so you take that shame out, right? And you publicize in advance, we're going to focus on these three common dilemmas that we know you are asking us about. How do I balance retirement, let's say, versus paying off student loans? Well, one thing the employer can then say, if that's one of the questions is, "Hey, we will do..."

One program here in the US, is that now if a young employee or early career employee says, "I need to spend $2,000 a month paying down, or $1,000 a month paying down my student debt, so I can't contribute that $1,000 to my retirement fund," many companies will say, "But we'll make your match for your retirement fund. So, while you pay down your student loan, we're going to work on your retirement fund." Many employees don't have that information. Talking about basic financial habits is also important. And this can come, like I said, in sessions, ideally live. If it works for some employees, you can do recorded ones. But having a budget, sticking to a budget, putting a little bit aside for retirement, for emergency savings, even 50 bucks a week. And also having wellness resources online available, like financial calculators, I'm a big fan of these - most retirement plans already offer them where you can kind of track where you are relative to where you want to be. Make sure your employees know about those. They're amazing. The numbers tell a story, and that can be hugely, hugely helpful.

And then just educating, seminars and whatever kind of discussions you can have, financial skills and habits, including, as I said, managing a budget and other basics. I do also, when it comes to mindset, want to go back to the idea of this new buzzword, money dysmorphia. Money dysmorphia is basically having your financial reality not in sync with your perception of your financial situation. Why does this matter? What you might do, if you don't have a clear connection, is you might make rash decisions. You might be in a panic and make decisions that you regret. You might make stock market investments that you might regret. And so, we really have to be very careful with money dysmorphia and really being clear on our own financial situation and our economy of one, and where we are financially ourselves, relative to our needs, relative to our wants, and relative to our goals.

Rachel Fellowes:
Wonderful, Bobbi. And that's it for our show for today. Thank you all for listening. In the next few months, you'll be hearing more from us than the Better Being episodes on some really exciting topics that compliment everything Bobbi's touched on. These include burnout, nutrition, and also, we are getting to meet the Blue Zones team. You may have heard of them from Netflix. So, until next time, thank you.

Outro:
Thanks for tuning in to the latest episode of “On Aon” with our episode host, Rachel Fellowes, and today’s guest, Bobbi Rebell. If you enjoyed this episode, you can get more insights on wellbeing in the workplace and information on future podcasts by following Rachel Fellowes on LinkedIn. In the meantime, be sure to check out our show notes and visit our website at Aon dot com to learn more about Aon.

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Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

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