A lot of awareness surrounds mental and physical health, but what about financial health? Positive financial health promotes confidence, relaxation, and ease of mind, whereas negative financial health can have the reverse effects, including low self-esteem, stress, anxiety, and depression. These negative feelings are made all the more overwhelming when your employees struggle to pay bills while incurring more and more debt. Consequently, this can lead to distraction in the workplace and diminished productivity. Fortunately, you can help your employees improve their financial health by sharing these helpful tips.
Budgeting for emotions
The catch is, we often find ourselves trying to regulate our mood by spending. Whether you treat yourself to a lavish latte before a tough work day, splurge on supper after that same long day, or enjoy a well-deserved weekend away to put your work week behind you, it’s easy to turn to retail therapy for relief. Unfortunately, after you take that last sip, bite, or return from vacation, you might regret spending money on luxuries, especially when your credit card statement or chequing account balance gives you an unwelcomed reminder.
So, before you begin your journey to positive financial health by following the steps below, first try to understand why and when you make purchases to better understand your spending habits. If you notice that you tend to go on a shopping spree when sad, frustrated, or downright bored, encourage yourself to replace that activity with one that’s free and healthy, such as going for a walk or talking to a friend. You will soon realize that your financial health is within your control and that your positive emotions don’t have to come at the expense of your wallet.
Take a step (or seven) toward positive financial health
If you are trying to keep your head above water to make minimum credit card payments or pay bills, it might be a good idea to take these seven proactive steps in the direction of financial stability.
Step 1: Download and begin filling out our 2025 budgeting worksheet
Step 2: List all net (after-tax) income.
Tip: If you get paid bi-weekly, simply multiply your paycheck by 2. Then, you will have an extra two paychecks per year in case of financial emergencies.
Step 3: List all monthly and annual expenses. Don’t forget to account for infrequent yet large purchases, such as vacations, school supplies, and seasonal activities like skiing or your child’s sports team enrollment. Also, if you have a general recreation fund, make sure it accurately reflects your spending habits, e.g. if you set aside $100 per month to spend at restaurants, review past receipts or charges to see if your estimate is correct. Inaccurate mental accounting leads us to believe we have more discretionary income than we really do.
Tip: If you have recurring debt, remember to list the average interest charges as an expense.
Step 4: Once you have an accurate understanding of how much you have coming in and going out, you can start to see where you can cut back. If an expense strikes you as unnecessary, or just unnecessarily high, think if it’s reasonable to remove it completely or just reduce it slightly. After all, you deserve to treat yourself now and then!
Step 5: Look at the bottom line of your budget.
If you see a positive number, congratulations! That indicates you live within your means and can allocate that surplus to savings, a long-awaited purchase, or pay down debt to reduce interest charges.
If you see a negative number, don’t worry, you have the power to turn it into a positive number – with just a little planning.
Step 6: Acknowledge your feelings when you’re reviewing your budget – positive and negative. Perhaps you feel overwhelmed or embarrassed about your current financial health. Focus on the word current, which means that it’s not necessarily permanent.
Some events and expenses can be unexpected and out of your control, like a costly car repair, so it’s important to remember that although you have the power to improve your financial health, sometimes it’s easier said than done. Never think that your finances reflect you as a person, but rather a necessary (albeit tedious) part of life.
Step 7: Make a change (if you see fit). Remember that no two lives or budgets are the same, so what works for one person, might not necessarily work for you. Knowing that you can decide what aspects of your budget you’re willing to adjust and what expenses you can’t live without. Either way, having a complete, accurate, and regularly updated budget on hand will give you the clarity you need to make financially healthy decisions going forward.
By encouraging your employees to follow these steps and reflect upon their current and desired financial states, 2025 can be the year you embrace positive financial health while relieving unhealthy financial stress.
Learn more about financial coaching services through Homewood Pathfinder’s employee assistance program: https://homewoodpathfinder.com/employee-assistance-program/