What financial rules-of-thumb stick in employees’ minds?
We released a Wellbeing Briefing recently, focused on financial rules-of-thumb and why they may be paradoxically the best way to change financial behaviours. Rules-of-thumb are generalised, short, memorable guidelines that are easy to apply to your individual circumstances.
In order to understand what types of rules-of-thumb stick in peoples’ minds, we asked 2000 UK adults what piece of financial advice was the best they ever received.
In order of popularity, these were the top financial rules-of-thumb identified in the research:
- Pay your bills and stay out of debt
- Save for a rainy day
- Start saving at a young age
- Spend less than you earn
- Avoid credit cards if you can help it
- Stick to a budget
- Pay off debts rather than spending money on luxury items
- Pay off your mortgage as early as you can
- Teach your children the value of money
- Don’t do food shopping on an empty stomach
- Save first, spend later
- Don’t spend it all after payday
- Teach your own children how to budget from an early age
- Plan for retirement rather than burying your head in the sand
- Sleep on a big financial decision
- It’s okay to ask for help
- Never lend money to friends or family
- Be open with your partner about spending habits
- Set a savings goal
- Invest in property
Best source of financial advice?
We also asked respondents who they would go to for financial advice as we wanted to understand where most people go if they need help with money.
It’s clear that people go to those they trust, with just under 40% of respondents agreeing that the best advice they ever got was from parents and grandparents.
Of those that would not currently go to anyone for financial advice, a fifth say it’s because they don’t trust anyone else.
But that’s not to say that these people don’t want financial advice.
A financial education gap that needs plugging?
Of those we polled, 60% say there is a support gap for adult financial guidance – with two fifths stuck with the unfortunate belief that financial advice was ‘mainly for wealthy people.’
Over eight in 10 (83%) of workers would have liked to receive more financial education after leaving school.
Perhaps most pertinently, half want their employer to step in and provide information.
There’s a void, therefore, for good-quality financial education and insight – and it’s an area that organisations are increasingly stepping into.
The link between poor financial wellbeing and mental health
Why are employers filling the financial education gap?
There’s a strong link between poor financial wellbeing and worsening mental health, which can lead to issues like reduced productivity and focus at work.
Not to mention poorer interpersonal relationships.
Employers also increasingly realise they are in the best place to plug the gap (and benefit from the outcomes): it’s in their interests to improve employee financial wellbeing and they aren’t seeking to profit from selling additional services.
Finally, there are now innovative ways for employers to help that genuinely improve financial wellbeing through personalised insight – such as in-app financial coaching – which means efforts to improve financial wellbeing are likely to bear fruit.