The new financial year is here and with it comes tax time. For many Australians this is a stressful time. According to recent research by H&R Block and Officeworks, nearly half of Australians report they find the tax preparation process stressful, with around a third saying they resent tax time, leaving preparations until the last minute. Usually, that stress is exacerbated by lack of knowledge, planning and time constraints which can linger long into the new financial year.
Australians continue to rate financial issues as the top cause of stress according to Australian Psychological Society’s Stress and Wellbeing survey. With so much uncertainty across a number of industries and the cost of living rapidly rising, it is no wonder financial related stress is so prominent.
Resilience is the ability to recover and bounce back from adversity and life’s challenges. When applied to finances it is the ability to withstand external pressures during times of financial stress. Employees must understand that these external pressures are often outside their control and in order to be resilient it means taking responsibility and having a plan in place to feel confident about their financial standing.
Employers can play a role in helping their employees cope with financial related stress by recognising the impact it can have on different groups in the workplace. It is important to recognise that there are many varied reasons for financial stress. For example, our aging workforce is facing many challenges, including their fear of entering retirement, paying for their children’s higher education and moving their parents into nursing homes. On the other hand, millennials are facing economic instability, crushing student debt, stagnant wages and looming uncertainty about the future.
How individual employees handle financial stress varies greatly. Employers should aim to reduce the impact that this type of stress can have at work in the form of presenteeism. Breaking down and understanding the underlying issues can be the key to helping employees become more resilient.
Understanding financial concepts can be confusing, but to improve knowledge and resilience, it often means taking the first steps.
Here are some basic tips on reducing finance related stress:
1. Create a budget, it’s a must if your finances are causing you stress. Recording all income and expenses, and cutting back on the unnecessary items will build margin into your budget. This can provide the relief you need when times get tough.
2. Pay off debt. The weight and burden of debt can affect a person’s mental wellbeing. Be sure to pay off your credit card charges each month and make the right decisions when it comes to financing purchases.
3. Save, save, save. Set up an automatic payment to your savings account so with each pay you accumulate a cash reserve for any unexpected expenses. Remember, big or small, every bit counts. Once you’re confident your savings are on track, start adding to growth investments for longer term financial freedom and wealth.
4. Adequate income protection and life insurance could mean the difference between keeping or selling your property if an unplanned setback occurs. Make sure you have it.
Coaching can help employees understand and manage their money by teaching them the financial skills that can be applied to everyday living. Our financial coaches can create a personalised action plan to manage debt and provide practical information on options and rights. Contact your dedicated Relationship Manager directly or AccessEAP on 1800 818 728, to discuss how to develop financial resilience in your workplace.