Financial literacy education at work

Money Management
MNCPA

The economy may be showing signs of improvement, but research shows employees are still not confident about their own financial situations.

In fact, according to the Federal Reserve, American workers spend an average of 28 hours a month stressing about finances. It’s a situation that can cost employers $5,000 a year per employee in lost productivity. Help for struggling employees may be right outside their cubicle through workplace financial education.

April is Financial Literacy Month, so it’s a good time for employers to start a program to teach employees healthy financial habits, according to the Minnesota Society of Certified Public Accountants. Workplace programs can be done inexpensively and offer huge rewards to employees and employers alike.

Teaching money smarts
Financial literacy is defined as the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being. Financial literacy can make employees more productive and less vulnerable to major economic uncertainty, however, only about half of employers say they provide even the most basic workplace financial education. By offering employees the opportunity to improve their financial literacy, companies can help them achieve financial well-being.

Using the workplace as a financial education classroom is a tremendous opportunity to increase productivity, engagement and loyalty. Financial literacy topics could include:

Budgeting and spending plans
Retirement planning
Changing family structure( marriage, divorce, new baby)
Setting financial goals
Planning for emergencies
Paying for college
Managing your credit
Getting out of debt
Company 401(k) or other defined benefit options
Insurance
Estate planning
Elder care

Where and when
You don’t have to give everyone a day off work and book an expensive conference facility to offer financial literacy. At the most basic level, financial literacy courses can be offered by an in-house staff member or by an outside expert during a brown bag lunch or after-work session.

Employers may also want to consider offering one-on-one counseling at the office during work hours. According to research from The Principal Financial Group, employees with access to one-on-one counseling become more engaged in their financial affairs and save more.

One note of caution, however: Any time people employed at a company help educate fellow employees, it’s important to provide a clear disclaimer saying the information is being provided by individuals for educational and informational purposes. The “trainers” should make it clear that people should check with qualified professionals before making any important financial decisions. You need to state clearly that the company will not be liable for any action an employee takes based on this kind of peer to peer communication.

A CPA can help

Still on the fence as to whether workplace financial literacy education is right for your organization? Consider research that points to financial literacy as a critical factor in optimizing employee performance, as well as understanding and appreciating their benefits.

Employees’ personal financial difficulties can be all-encompassing. Employers can be a part of providing solutions through education. You can also seek advice from a CPA. Go to www.mncpa.org/referral to find a CPA in your area.

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