What does Financial Wellness look like?

From
Australians

WSSA has developed a ‘Financial Wellness’ index for Australians.

Australians are on a huge spectrum of Workplace Financial Wellness with only 6% classified as ‘superstars’, and 12% as ‘financially unwell’ meaning they are in desperate need of financial help.

According to the Workplace Super Specialists Australia (WSSA) who developed its Financial Wellness index in conjunction with CoreData, financial wellness is:

  • A state of being healthy, happy and free from any financial worries and stressors;
  • Being able to live your desired lifestyle for the rest of your life without financial anxiety or fear;
  • Having a clear understanding of your financial situation and having the ability to live within your financial means.

Australians who were ranked as ‘financially unwell’ typically struggle with the first building blocks to wellness, that is budgeting and debt management.

They are also stressed and overwhelmed, with almost all indicating they are not financially secure for the future (96%). The vast majority indicated their finances are out of control (91%).

In addition, females are overrepresented in this group, and most have poor financial literacy. Many feel they cannot live within their means, and need help with the most basic financial planning skills.

In comparison, ‘Superstars’ have little to no anxiety when it comes to their finances, short and long-term financial goals are adequately defined, and risk management, estate, and retirement savings plans are in place.

This group has good financial habits they regularly implement, including research, monitoring investments and spending, as well as regularly reviewing arrangements such as estate plans. The majority of the Superstars also have a dedicated financial adviser (56.6%).

WSSA President Terry Rhodes says the survey demonstrates the clear iinks between employee financial literacy and perceived levels of financial wellness, and financial stress and productivity.

“We know employees who lack financial wellness tend to be more stressed, as observed by more than three in five employers (63.3%),” he says.

“Further, a significant number of employers also noted presenteeism (43.3%), low morale (30%), and absenteeism (16.7%) as other consequences of poor financial wellness.

The high correlation between financial literacy and financial wellness means there is an extremely powerful and potent solution that can be used to ‘even out’ the wellness spectrum.

“Financial wellness programs have a clear benefit for all involved, employees and employers alike, and if we play that out even further, a national benefit,” says Rhodes.

The survey showed despite the costs of poor financial wellness, only 15.2% of the businesses surveyed had implemented a financial wellness program.

Yet three in five of those that had have seen an increase in the overall financial wellness of their employees over the last six months.

“Employers need to take a look at the data on wellness, as it is both powerful and empowering and is one of the most effective ways of positively impacting the behaviours of employees and how they feel.”

Other findings include:

  • Financial literacy underpins financial wellness, with 95% of the superstars having strong or very strong financial literacy compared to less than 4% of the financially unwell.
  • Males are typically more financially well than Females, possibly due to factors such as workplace discrimination, wage ceilings and financial abuse within relationships.
  • Age has little effect on the wellness of each individual, indicating that financial wellness is not an absolute measure, but rather is relative to each individual’s situation.

For a full copy of the findings from the research, click HERE.

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