If you own your own company, it’s possible that you haven’t considered financial literacy programs in work. Should this be your responsibility?
Well, those with lower levers of financial worry also have higher levels of financial literacy.
So, what does this have to do with you, as an employer?
Financial literacy is, generally, very low amongst the public. Money, therefore, remains a constant source of stress and poor performance at work. It also pushes employees to look elsewhere for other jobs, or feel unhappy in current positions.
In order for a workplace to really thrive, employees have to be healthy, happy, and passionate – things which go hand in hand with monetary security.
I personally, like the majority of the population, believe that financial literacy should be taught in schools as part of the national curriculum. Obviously, these lessons are important and many adults never really learn how to be sensible or smart with their money – leaving them to live from paycheque to paycheque every month.
Helping staff with financial education can help them gain confidence in their career and personal life, and also encourage them to focus more.
The different kind of employee (in financial terms)
When it comes to financial decision making, there are four types. Knowing which each member of your team is, can be important. These are:
- Actives – These are those lucky people who never budget or overspend, mainly because they do monitor their financial situation.
- Budgeters – These people will never overspend but spend their days on a strict budget.
- Spenders – These are the type of overspend every month. This comes from not monitoring their financial situation to just being a little bit reckless.
- Reactives – These normally spend in response to a current situation, and so don’t actively monitor their financial situation, but don’t overspend as often as the spenders.
It’s likely you already know who is what in your team.
How to empower good financial decisions
Financial literacy is, unfortunately, not just as simple as teaching employees how to budget better or save more. It is incredibly more complicated and can take a little bit of time to teach.
However, the lessons learnt will last for a long time. The benefits of which can be reaped for longer.
So, if you believe that your team has poor financial literacy, here are some ideas which can help them tackle the issue, and create a more productive, secure workforce. It’s a win-win situation for all involved.
These don’t have to be in person, they can be online classes or simple training materials. It depends just how involved and serious you want to be with it.
Classes, while they may cost a little bit more and take time, are perhaps the most serious and intense form of education. Otherwise, you can easily find financial planning classes on YouTube, Udemy, and podcast streaming services.
Openly talk to your employees about how much help they need, and learn about their finances. They might have already mentioned it to you.
Once you find out where they struggle, you can find the most helpful course for them.
With online courses and podcasts, there’s really no way of knowing if your employee will take the time to teach themselves. That’s why a little incentive might be necessary.
There is an array of financial planning tools out there. These can be simple apps and budget checkers, all the way to free tools which help with investing and retirement planning.
These are the next best things after financial counsellors – and they’re always available in your pocket, at all times.
Keep your eye out for various apps and tools which you think may be helpful.
It’s hard to know exactly how and why people spend their money. In fact, it’s easy to “judge” from the outside.
Each one of your employees, if it is an interest to them, should identify their priorities, and where they spend money. Sometimes, this can be a little daunting, but knowing exactly where your money goes is important.
Sometimes, analysing this in terms of age, commitments, and (strangely) gender can be interesting.
For instance, household expenditures are a higher priority for women than men. Likewise, saving for retirement is also a bigger priority for men than women. Factors such as children ad lifestyle also change drastically from person to person. That’s why a self-assessment can be so useful.
Why does this benefit the company?
Obviously, with a happier workforce, the more productive it will be. Your staff will be able to appreciate their pay – something which is especially important for startups, who may have a tighter budget.
Employees will be less stressed about external situations, and therefore more focused at work. They also won’t look elsewhere for a better-paid job, as their current one will fund their lifestyle and concerns.
Financial literacy ultimately leads to financial security (with some exceptions), which simply makes employees better workers.
Nobody can deny that financial literacy is absolutely essential for reducing money worries and overspending.
Financial wellbeing, although can be pushed by you, is ultimately in the hands of the individual.
Also, financial literacy is just one piece in a much more complex puzzle. It takes time and planning, after that it comes naturally.
Once your team is into financial literacy, your team will be feeling a lot less stressed.
While nobody is suggesting that your employees cannot work out their financial situation themselves, sometimes it is important to give them that first little push.
The support you give might just allow your employees to save up for a house, get out of debt, or just live a little more comfortably.