Your office spouse and your finances: Hand-in-hand for good or bad
Friday, 1 February 2019
Most full-time workers spend at least 40 hours a week in the office. Some spend their lunch hours, coffee breaks and happy hours with coworkers too. A majority of employees report they spend more time with their coworkers than with their family members, according to a recent CNBC article about “work families."
All that time spent together means that coworkers tend to share details with each other and influence each other's behavior, even when it comes to money. That can be good — such as encouraging each other to participate in the company 401(k) — and bad, if that influence means overspending on coffee breaks, lunches or office gifts.
Discussing personal finances
While good relationships are built on sharing personal information, talking about your finances is one of the 10 things to never discuss with your coworkers, according to Liz Ryan, a former human resources senior vice president and author of “Reinvention Roadmap: Break the Rules to Get the Job You Want and Career You Deserve."
While it's fine to talk about a vacation or a home improvement project, it's best not to discuss how much you paid or where the money came from to avoid coworker jealousy or gossip. General conversation about money can be valuable, though, such as sharing tips about how to save money on travel or home repairs.
Talking about financial problems at work can lead to gossip and possibly concern about your focus on your job.
Sharing salary information
While some career experts recommend discussing your salary with coworkers, others warn against it. It's legal for private sector employees to discuss their salary and some advocate doing so to improve transparency and avoid pay inequity.
Other financial experts say it's best to avoid talking about a raise or your salary because it can cause jealousy and because coworkers are not always truthful about their income. Comparing salaries can be difficult when employees have different skills and job histories.
The trend today is for more openness about salaries, which helps employees negotiate for raises with more information. It's up to you to evaluate the trustworthiness of your coworkers before discussing salaries.
Financial decision-making influence
Revealing the exact balance in your savings and retirement accounts breaks the code that polite people don't talk about money, politics or religion. But a discussion about investment options, particularly in employer-sponsored retirement accounts, can be helpful.
Employees are more likely to participate in an employee stock purchase plan if their colleagues participate, according to a study by the University of North Carolina. In addition, employees are more likely to sell shares of the company stock when their colleagues, especially those who appear knowledgeable about finances, make trading decisions.
Similarly, discussing employee benefit options for insurance and health savings accounts can be a positive aspect of talking about money with coworkers.
Socializing and spending with your coworkers
Your coworkers' financial habits, just like the spending patterns of your friends, can have a big impact on yours. If your coworkers tend to be thrifty, bringing lunch to work and brewing coffee in the office, you're likely to save more money than if they enjoy frequent pricey meals and happy hours.
To protect your finances, it's wise to establish your own limits and to make it clear how everyone will split the bill when you go out to lunch or for drinks. Similarly, personal finance guru Dave Ramsey recommends deciding for yourself how much you can comfortably commit to office gifts or holiday celebrations. Honesty about being on a budget is the best policy when your coworkers spend more than you want to on social occasions, Ramsey says. He also suggests setting aside a little money each month in a special envelope to use for work obligations, so you're not caught off guard by the next baby shower or group outing.
Impact of financial stress on work
For many workers, financial problems go beyond sticking to a tight budget. One-fourth of employees in the PwC 2018 Employee Financial Wellness Survey reported being distracted at work by personal finance issues, and 43 percent of those who were distracted said they spend three or more hours at work each week thinking about or dealing with personal finance issues. In addition, 26 percent of those who are stressed about their finances said their productivity at work has been impacted by their financial concerns.
Concern about debt, lack of savings, paying for college and retirement are among the top issues that worry employees. If your coworkers are experiencing this stress, you can help by suggesting they consult a financial consultant.
Being a positive financial influence on your coworkers is a balancing act between modeling good behavior and maintaining privacy.
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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