Bring the Fight Against Financial Illiteracy to the Workplace

I was out recently with a college friend. She confided to me that a collections agency was after her for a medical bill she was having trouble paying. Later into the evening she proudly showed me her new iPhone 8 and a pair of expensive shoes she just treated herself to… Sound familiar? It seems like everyone these days claims to be strapped for cash when a real need presents itself, but t­­­­­hey still manage to find money for things that aren’t quite necessary.

Money is a major source of anxiety and stress for Americans and I’m betting that much of this stems from the fact that people are financially illiterate. The sad truth is 57% of Americans have less than $1,000 in savings. This kind of behavior isn’t sustainable, especially once the realization sets­­­ in that your dream of retiring on a beach somewhere is – poof – gone.

Stop and think for a second. Where do we all learn how to handle our finances? Many parents don’t know enough about money to teach their kids the financial skills they need. Schools don’t seem to be helping either. Think back to the “life skills” taught in Home Economics class (baking muffins and sewing pillows – really?). No doubt this educational vacuum has contributed to the less-than-optimal financial situation that Americans are in today. What we need to do is wake up and smell the financial coffee.

As an employer, you educate your employees on their health benefits. You also help them understand consumer-driven health plans; so why not enlighten them on how to grow a 529 account, sensibly manage student debt, and save for retirement? You don’t need to dig your employees out of their financial holes, but you can at least throw them a rope.

A few ideas to get you started:

  • Communicate. This is the best time of the year to launch a financial wellness campaign as employees ramp up for the holidays (‘tis the season for spending money you don’t have).
  • Bring in your 401(k) provider. Many providers offer to spend a day onsite for one-on-one counseling sessions with employees.
  • Host a webinar or seminar. Frenkel’s wellness and retirement divisions team up to present financial wellness seminars about overcoming debt, college savings plans, and debunking misconceptions about your credit score.

So what’s the bottom line? Financial wellness is defined by health, not necessarily wealth. Helping employees self-manage their overall lifestyle (a large portion of that being personal finances) will lower stress, build a trusting employer-employee relationship and cultivate a less distracted and more productive workforce. Sounds like a win-win to me.

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