Money matters: Solving the puzzle of financial well-being with Jeremy Beament

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Financial well-being has been one of the relatively less acknowledged aspects of well-being. But employers are realising that financial stress and anxiety spill into work performance and productivity. In a recent interaction with us, Jeremy Beament - Co-Founder & Director - nudge Global said, “Over the last 18 months, we’ve experienced first-hand how black-swan events, geo-political and macroeconomic shifts can leave us financially vulnerable. Since money touches every part of our lives, money worries wreak havoc on people’s mental well-being. That, in turn, has a negative impact on people’s engagement and experience at work.”

This realisation has driven the most pronounced change in the employee benefits market over the past decade and has shifted the emphasis from employee choice to employee well-being. “Put simply, if a benefits package doesn’t help an employee bring their best self to work, it’s not doing its job properly,” said Jeremy. Accelerated by COVID-19 outbreak, a comprehensive well-being offer is now a must-have for any leading organisation, with financial well-being a key ingredient to a successful strategy.

Most common financial well-being challenges 

Research by Nudge shows: Globally, ​​46% of people feel anxious about their money, with women (50%) bearing the brunt of the worries, in comparison to men (42%). 53% of people feel that access to wealth is often unfair. Once again, it’s women (55%) who experience this more than men (51%), and generally, the younger generations are more subject to this inequality. 

It’s clear that some communities are being left behind by the financial ecosystem, and it’s up to organisations across the globe to break the cycle of exclusion by enabling equal access to financial education.

Jeremy shared, “We have uncovered that a significant amount of people live financially from month to month, pay-check to pay-check, with little retirement plans, and this cycle is wearing on them, particularly those struggling with debt.”

This is seen by 55% of the world saying their number one financial aspiration is just having enough money to pay their bills. This makes achieving other milestones in life more difficult, like buying a home, seeing the world and life after work. Jeremy believes, perhaps this is why 35% of people, globally, feel depressed about their current financial situation.

Women, middle-aged generations & some ethnic groups: More excluded from the financial ecosystem

Some of us experience bigger hurdles than others when it comes to financial well-being. Within each country Nudge surveyed, it’s women, middle-aged generations, and some ethnic groups who are more excluded from the financial ecosystem. 

Countries like Chile (73% said they felt excluded by the financial system), India (67%), Brazil (66%), Nigeria (64%), South Africa (63%) and Argentina (63%) are where experiences of exclusion are greater, and more so for women and people aged 34-54 years old. 

There are also specific communities within countries that are more likely to have felt excluded by the financial system. For example, in the United States, Asian Americans (51%), Native Americans (50%) and African Americans (46%) have felt more excluded than white respondents.

Employers role in enhancing employees’ financial well-being

To help bring more equity and financial well-being to the world, some businesses are levelling the playing field with employee benefits and support. 

Unfortunately, globally, employer support is in the minority with only 41% of people saying their employer offers personal finance education. But some countries are more advanced in this area than others. India (75%), China (74%), Nigeria (59%) have the strongest belief that their employers care about their financial goals. 

“It’s also clear that poor financial well-being is a global problem, needing a global solution,” added Jeremy. 

He shared that currently, organisations are mostly providing a piecemeal, inconsistent experience for their people. Then what does an effective financial well-being strategy look like?

Jeremy suggested, “A leading program should be personalised to the individual need, versatile to a country or region-specific nuances, and with a holistic range of topics that an individual will need to understand to make the very most of their financial situation.”

Employers should be empowering their employees to make the most of their money through robust financial education that considers local nuances and cultural differences. “Financial education platforms that are regulated, transparent, unbiased and underpinned by expertise can be trusted,” he added. 

You must know the financial aspirations of your people 

All over the world, financial exclusion remains a curse for many, particularly women and some ethnic groups. “For organisations that are serious about the diversity and inclusion agenda, financial well-being offers an excellent channel for organisations to celebrate differences and transform everyone’s future financial prospects,” said Jeremy. 

In order for this to happen, it’s essential that businesses understand the differing needs and attitudes of their people. 

But Jeremy shares that many employers aren’t even aware of the basics, like how many people their employees are supporting on their salary. 

Globally, 75% of employees are supporting others on their salary, yet 35% of employers are unaware of who their people are supporting. This does vary by country, with some much stronger than others. For example, Indian employers (78%) are very likely to know their people’s family financial circumstances. But overall, employers across the world aren’t taking external factors into consideration when developing their global wellbeing strategies. 

Employers also need to gain insight into differing priorities around the world. Every employee has unique personal financial goals. 

Globally, many say homeownership (50%), retirement (49%), and supporting their children’s futures (43%) are their personal financial goals. 

By region, in EMEA, the biggest aspiration is owning a home (59%), as well as in APAC (52%) and LATAM (60%), whereas in North America it’s having enough money to pay the bills (58%) followed by saving for retirement (52%). 

“There is a need for wider financial education powered by inclusive technology that shares targeted, unbiased information through cues informed by behavioral psychology,” concluded Jeremy. With specific programs designed for geographic locations, women, and diverse communities, businesses can create financially inclusive environments that break down barriers and increase the likelihood of positive financial outcomes.