Guest Contributor

How and Why to Educate Your Employees About Finances

By | Elaine Bennett

From student and home loans to credit card debt and limited savings, financial issues are at an all-time high, while financial literacy has never been lower. And even though it’s easy to think that these are just personal issues affecting your employees, the truth is that financial illiteracy can easily impact your business as well, causing disruptions in the workplace and ultimately hurting your bottom line. For that reason, you should aim to enhance your finances by educating your employees about money, and here is exactly how and why you should do that:

Understand it’s a net positive

Being more knowledgeable and skilled regarding their finances can significantly impact the future of your employees. While any new knowledge could potentially increase their critical thinking and organizational skills, developing financial literacy could teach them how to live a better, more comfortable life at the moment, and even invest in a more secure future. This could help to reduce work-related stress and create happier and more satisfied employees, improving their performance and boosting overall efficiency as a result. The need for side hustles might also be reduced, thus making it simpler for HR teams to minimize staff vulnerabilities.

Know the health benefits

Stress related to money is a common issue, one that comes with an increase in sick days, lower productivity, and a higher turnover rate. Financially illiterate workers might be more likely to create additional stress in the work environment as well, often by asking their colleagues for loans, requesting an advance, and speaking to everyone in the workplace about their financial troubles. But when employees are more educated regarding money matters, they tend to be more focused at work, more productive and efficient, more satisfied with their job, and happier overall, thus having quite a positive effect on your business’s bottom line.

Teach through examples

When it comes to educating your employees about finances, teaching through tangible examples can be quite an effective method. For instance, you can explain what is junk insurance and show real examples of this add-on insurance that’s been sold along with credit cards and loans. As this type of insurance is often sold to consumers using unethical practices, this can allow your employees to learn more about the deceptive insurance industry, and teach them the importance of carefully reading each contract before signing it. As a result, the financial literacy of your workers will improve, and they might even find they’ve unknowingly been paying for unnecessary insurance as well.

Hold a financial workshop

Workshops are another efficient way you could promote financial education, either by holding them yourself or by asking your financial service providers to offer some additional help. If a workshop is constructed carefully and in great detail, your employees will learn more about financial management from the facilitator, and they might even gather some additional information and helpful tips from other workers who attend. If you want to take this a step further, you could also look for relevant courses at local universities or online learning providers that can offer a more in-depth approach to financial literacy.

Utilize helpful digital tools

Thanks to the advancement of technology, there are a number of digital financial tools that can aid your employees in managing their finances more efficiently. Find programs and applications that are free, impartial, and easy to use, which you can then recommend to your workers and encourage their usage. It might be best to focus on financial planning tools that include saving, budgeting, expense tracking, income projections, debt pay-offs, investments, protection against identity theft, and any other aspect that your employees might find useful.

Invest in consulting services

If you’d rather leave this responsibility to the professionals, hiring a financial consultant can also be a great way to encourage financial literacy within the workplace. These experts have plenty of knowledge and experience in the industry, and can easily provide the necessary information to your employees in a way that is easy to understand and simple to implement. They are often more unbiased than financial providers as well, and can offer a great service without trying to sell a financial product in the process. In case your company needs help with finances, a consultant can also help you streamline this aspect of your business.

Create a necessary checklist

No matter which teaching approach you select, financial education always needs to have certain key elements implemented in its strategy. This means creating a detailed plan of how and when you will focus on financial health, communicating clearly with your employees and notifying them of educational opportunities, asking workers for feedback on relevant financial topics and potential areas of improvement, as well as reviewing your methods based on evolving financial needs. When financial education is provided in such an honest and transparent way, chances are higher that your employees will actually learn, retain, and implement the necessary information.

Above all, aim to be cautious and selective about any recommendations you make. You are simply providing financial tools, resources, and education; make it abundantly clear that your employees are ultimately responsible for their decisions and actions.

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