Christmas is not just about decking the halls with boughs of holly, it can also be a time of financial worry. When it comes to buying presents, copious amounts of food and of course, a new outfit for the work party, the pressure to splash the cash at Christmas has never been greater. But increased spending in the festive period can leave many Britons living beyond their means, resulting in greater financial worries at Christmas. In fact, a recent UK survey found that 16% of people (that’s 7.9 million of us) will fall behind with their finances in January after spending too much at Christmas.[1]
If you’re looking to help your employees with their year-round finances to ease the pressure of the festive season, look no further! Here are the areas you need to think about.
Budgeting for the present(s)
When it comes to helping employees adopt better financial behaviour, budgeting is key. Encouraging your employees to set money goals and budget for them across the year gives them better control over their finances and keeps them focused.
Investigate what budgeting solutions your incumbent providers already offer. Many product providers have online financial hubs which your employees can use. With calculators and monthly spending plans, employees can see how much money they need to put aside for all their expenses.
To further support your employees; run a bespoke communications campaign focused on the benefits of budgeting, highlighting the difference between necessary and discretionary spend. For necessary spending such as gas and electricity bills, prompt employees to shop around for the best deals. When it comes to discretionary seasonal spending, ask ‘does your child really need the latest big-brand gadget for Christmas or is there a cheaper alternative?’ Christmas should never be about feeling obliged to buy presents. Instead, encourage your employees to make a pact with friends, run a Secret Santa arrangement or look at a charity donation.
Saving for a snowy day
It’s important that your employees save up a buffer so that they are more financially resilient and better protected against financial shocks. Concerningly, many UK employees are not doing this. A recent UK survey revealed that in 2017, over 50% of respondents did not start saving for Christmas before the 1st December.1
Diagnose what the savings problems are in your workforce. If you’d like support with this, our Litmus research proposition* helps identify the financial pain points your people are feeling, and suggests methods of intervention to reduce these problems.
Debt the halls
Our recent research found that 29% of respondents would fund an unexpected expense of £1,000 using a credit card, getting deeper into debt.[2] This is especially prevalent during the festive period, with 37% of Britons admitting to putting their Christmas presents on credit.1
Post-Christmas, your employees are likely to need your help to clear all this debt. There are many ways you can promote better financial behaviour amongst your workforce via workplace lending and financial education.
By supporting your employees with their year-round finances, including saving and budgeting, you can help them to adopt better financial behaviour. Employees will be more engaged with, and in control of their finances, leading to better spending habits during the festive period and reduced debt afterwards. Don’t forget, ‘tis the season to help your employees!
[1] Debt advice charity, National Debtline: https://www.independent.co.uk/news/business/news/christmas-spending-debts-credit-card-payments-loan-british-people-britons-household-incomes-a8138251.html
[2] For more on helping your employees with their financial wellbeing, read our infographic, ‘Why employers should lend a helping hand’: https://www.thomsons.com/resources/infographics/why-uk-employers-should-lend-a-helping-hand/?utm_source=employeebenefits&utm_medium=thirdpartyarticle&utm_campaign=EBW201718
*To find out more about our Litmus research proposition, please get in touch.