Five steps for future financial independence

Zeldeen Müller

Step 1: Change their attitude

A society in which employees productively focus on their work without constant financial worries can only be created if we can change people's attitudes towards money and finances. This is the first step for creating new habits. The only way to change an attitude is to educate employees on the why. Hit this point hard, again and again. Then educate on the how and make the goal truly desirable. Then reinforce the why some more.

Step 2: Be the change

Financial security only becomes desirable when the leaders of organisation and team managers lead by example. Being financially savvy should be a status symbol, not who drives the biggest car or lives on the most 'posh' golf estate.

Step 3: Help them make money available to save

Basic financial literacy programmes will go a long way in assisting employees to free up some money, which can be saved. Provide budgeting tools on the intranet, easy-to-use calculators, information on buying your first house, what to consider when buying a car, guidance on how much debt is reasonable, information on where to get debt counselling, and tips for settling debt. And constantly reaffirm your message: that cash in a savings account or investment vehicle is more admirable than a fancy lifestyle filled unseen but very present with financial worries.

Step 4: Let them experience the sacrifice... and then the reward

The easiest way to change a habit is to experience the reward that the change brings. But saving for retirement is a very far-off goal. Having financial peace of mind is more tangible, but still subtle. It is important for adults to experience the rewards of forgoing instant gratification, but with shorter, more easily reached goals.

If companies can create a programme (such as a company savings programme), where employees are encouraged to save for small short-term goals, such as saving for three months in order to take their family for a weekend away, then employees will start to experience the action-reward feedback loop that is required in order to form the savings habit. If they can form the short-term savings habit, it will be much easier to transition to long-term savings.

Step 5: Let them see the results of their new financial habits in a safe environment

Educational games and simulations provide non-threatening environments in which anyone can experiment with different financial scenarios and implement what they learn. The edutainment element ensures that the topic, which is usually very boring and often intimidating, becomes interesting and fun, and is appropriately simplified.

A society with healthy financial habits can be a reality. Let's help them get there.