Broker Check
Financial Literacy in the Workplace

Financial Literacy in the Workplace

| March 06, 2024

Did you know that 85% of employees prioritize financial literacy? Statistics published in 2018 by MetLife show that 46% of employees feel overwhelmed by financial decisions. Additionally, over half (53%) are concerned about their future due to their current financial situation.

You might already be aware that employees are turning to their employers for assistance. In fact, 50% of employees believe their employers are responsible for their financial well-being.

Financial Literacy in Schools

Financial education is notably absent from standard school settings for several reasons.

  • Competing curriculum priorities take precedence over financial education.
  • Many teachers are not properly trained in financial topics
  • Standardized tests prioritize other subjects, leaving little room for financial education electives in the curriculum.

As a result, students graduate without the financial literacy skills needed to navigate real-world financial challenges.

Financial Literacy in the Home

Juggling the demands of a career and family life can leave employees feeling overwhelmed and stretched thin. Simply put, life gets in the way. It happens to all of us. People get wrapped up in their lives and they can’t find the time to focus on their personal finance needs. They often overlook opportunities to improve their financial literacy or implement strategies for their financial well-being.

Why Financial Literacy Workplace is Crucial

Financial stress significantly impacts an employee's productivity, motivation, and loyalty. Worrying about extra income, piling debt, and operating in survival mode can affect overall performance. Statistics indicate that 40% of employees live paycheck to paycheck. Additionally, within this demographic, 30% have already tapped into their retirement plans due to financial emergencies.

A financial literacy program equips employees with a comprehensive understanding of key financial concepts, empowering them to make well-informed decisions regarding saving, investing, budgeting, debt management, and retirement planning. The incentive enhances their financial stability, reduces stress, improves peace of mind, and fosters overall well-being.

Budgeting

Effective budgeting enables your employees to allocate funds towards significant goals such as saving for a home, retirement, or starting a business. It also fosters positive spending habits, prevents overspending and impulse purchases, and cultivates responsible financial behavior.

Debt Management

Obviously, managing uncontrolled debt is crucial for improving an employee’s financial standing. By addressing debt effectively, your workforce mitigates the impact of escalating interest rates and declining credit scores, thus enhancing their overall financial health.

Retirement Planning

Financial literacy also prepares employees for retirement by equipping them with essential knowledge and skills based on their age, current financial situation, and long-term goals. Through financial literacy programs, employees learn key aspects of retirement planning, such as determining an appropriate retirement age, selecting the right retirement savings account, and implementing strategies to minimize tax burdens legally. Employees also gain insights into establishing wills and engaging in estate planning to ensure their assets get managed according to their wishes in case of death or incapacity.

Insurance Planning

Through financial literacy programs, employees improve their understanding of the function and advantages of Health Savings Accounts (HSAs). They can make informed decisions between HSAs and other insurance plan alternatives based on their needs.

Employees also gain insights into identifying ideal accounts for college education planning and making informed decisions about life insurance and Disability Insurance (DI). This comprehensive understanding ensures that even if the employee transitions from a company, their family remains financially protected indefinitely.

Benefits to the Employer

An employee obtaining financial security can positively impact their focus, performance, and engagement at work. For employers, this translates into reduced absenteeism, improved employee retention rates, increased participation in company initiatives, and an enhanced brand value. Which, in turn, positively effects a company’s ability to attract and retain top talent.

Work With the SKG Team

We provide win-win solutions for employers and employees. As certified financial professionals, our expertise lies in providing individuals with practical financial skills essential for achieving long-lasting financial stability.

Numerous Fortune 500 and 100 companies rely on our specialized services to bolster their employees' financial knowledge and empower them to make informed financial decisions. Watch employee productivity and loyalty improve by leveraging our services today.

CRN202507-6071467