Addressing the Absence of Community in Personal Finance

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” —Aristotle

According to Charles Duhigg in his book The Power of Habit, a habit consists of three elements: a cue, a routine and a reward. The cue triggers our brains to determine which routine, or habit, to use, and the reward helps us decide if it’s worth remembering. If the reward is strong enough, a craving will emerge. It is this craving that motivates us to pursue a new habit and replace an old one.

Is it the responsibility of an organization to help its employees change their money habits? Maybe, maybe not. But if an organization is in position to do so, why not? We are in a time when many companies are focused on employee wellness, which means the organization is working to create positive behaviors and results for its employees. What’s at stake? More of the same behaviors. According to a Harris Poll, 82 percent of employees working full time have financial stress, 34 percent have trouble meeting monthly expenses, and 37 percent spend two to three hours per week at work thinking about or dealing with their finances.

The actual costs to an organization should be evaluated within every company.

OK, how do we do it? How best to enact change?

An organization that recognizes the value of community in bringing about positive and lasting change is one that will help its employees become more financially successful. Changing habits starts with addressing these three questions:

Do you want to do this?
Do you know how to do it?
Do you have the support you need to do it?

To move forward, we need to agree on the assumption that everyone wants to be successful with money, and answer “yes” to the first question. The second is a broad question, and it’s important to be specific on what money skill we’re talking about. With less than a third of Americans keeping a budget, according to Gallup, let’s start there and offer training on putting together a personal budget.

The last question is the most important one. Does the person have a positive community supporting the new habit? Community becomes the “reward” element of the habit loop; remember, if the reward is strong enough, a craving will emerge motivating us to pursue the new habit. What makes AA (Alcoholics Anonymous) so effective is the power of its positive community in teaching people that change is possible and attainable. Change is easier when it occurs within a community and can happen whenever people come together to help one another.

Many Americans struggle with money and many of those struggles are caused by poor habits. Poor habits need to be replaced with good habits and reinforced through a supportive community. Every organization has the opportunity to foster such a community.

A Financial Wellness Program

A business can enable successful financial habits among its employees by implementing the following steps:

Deciding on a budgeting tool or resource. I recommend the organization teach its employees some variation of the 50/20/30 budget.
Identifying champions within the organization to lead this initiative. I recommend 5 percent of the organization, so if there are 100 people, there would be 5 champions. Each champion, after completing the program and gaining mastery of it, then heads up teams of 20 employees. Within each team, every employee is partnered with another employee.
Rolling out the initiative to the employees as a part of the organization’s overall wellness program.
Incentivizing completion of the program through company-wide recognition as well as rewards such as gift cards to a local coffee shop or movie tickets.
Celebrating stories of success by asking for feedback from employees and champions. Odds are, an organization is already in the habit of celebrating accomplishments or birthdays; the communication of financial successes should be included in those communications.
Adding this program to the organization’s new employee onboarding, immediately pairing the employee with a graduate from the program and announcing their enrollment.
If an organization could help its employees more fully realize the impact they have through their work, it could help the organization more fully align while, at the same time, helping the employee achieve personal alignment — leading to greater fulfillment and contentment in their lives. It would have a dramatic and positive impact on their financial situation because a fulfilled and contented person is less likely to over-consume material things.

George Grombacher is a consultant, podcaster, writer and speaker. He’s a co-founder of the “Figure it Out podcast” and host of the “Money Savage” podcast. His first book, The Farmer’s Rules for Your Financial Harvest, will be released in early 2018. He helps companies design educational strategies for increasing employee participation in retirement plans.