You already know that there’s a ton of buzz around financial wellness.
But what you might not know is that there are three key concepts that are completely missing from financial wellness programs. By not including these key behavioral economics concepts, advisors, providers and employers are losing out on their opportunity to have a big impact.
Don’t just take my word for it. These key concepts are the result of 10 months of product development between Moneymap and Duke University’s Common Cents Labs, headed by the renowned behavioral economist, NY Times bestselling author and WSJ columnist, Dan Ariely.
I want to talk briefly about three missing concepts and how they’ll shape the future of financial wellness. They’re not what you expect.
MISSING CONCEPT #1: Start with goal-setting
If we focus on explaining more of the fundamentals of personal finance, will employees change their under-saving behavior? No way. People care about themselves, their goals, their future. Start every engagement with a detailed discussion about which financial goals they want to accomplish, in order to motivate behavior change.
MISSING CONCEPT #2: Focus on pre-commitment
How can we ever get employees to change their behavior if we don’t ask for a specific commitment? We need to engage them around their goals and then get them to commit (multiple times, in different ways) to follow through. The use of positive social proof (i.e. 78% of people aged 34-45 selected this option) is also key.
MISSING CONCEPT #3: Accountability drives behavior change
We all know how easy it is to ignore an email from a personal finance app. But if that email, SMS or in-app message comes from someone that we’ve been matched with and we have committed to work with them on our goals, it’s a very different story. The trick is how to scale that accountability (more on that in another email).
Last week, we were discussing with our research partners at Duke how we could get the word out on these concepts so that your current and future financial wellness programs will achieve better results. We decided to put together a cheat sheet to show you what you need to know. Introducing, the first ever cheat sheet on the 3 Key Concepts Missing from Financial Wellness Programs:
The financial wellness cheat sheet contains all new material that:
- Highlights each concept’s “Superpower”
- Examples of the “Superpower In Action,” so that you can apply it to your programs