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How to Help Build Your Employees’ Financial Literacy

BrightPlan Team

Many of us aren’t educated on how to make smart financial decisions or to plan, budget and invest for the future. Only 17% of students nationwide have access to financial education in primary or secondary school. This number is significantly smaller (3.9%) at low-income schools. Lack of financial education early on often carries throughout life. According to BrightPlan’s 2022 Wellness Barometer Survey, only 13% of U.S. employees have basic financial literacy.

Financial literacy is about understanding financial concepts, such as budgeting, saving and investing, and knowing how to apply them in your daily life. Those who have invested in their financial literacy are not only wealthier than those who do not―they are also healthier physically and mentally. Building financial literacy as early as possible enables individuals to have a better relationship with their money and creates long-term financial stability for themselves and their families.

 

The importance of financial literacy

Low financial confidence is one of the most pressing concerns among today’s workforce. 72% of employees are stressed about their finances – often compounded by a lack of knowledge related to fundamental personal finance topics, such as managing debt, building emergency savings, and investing for the future. Financial stress can not only lead to lower workplace productivity and engagement but also adverse health effects, increased missed workdays, and higher healthcare costs.

Here are some of the benefits employers can gain by helping their employees improve financial literacy.

  • Increased productivity. Financially stressed employees may not perform to their full capacity. In fact, our survey shows that financially stressed employees lose on average 11.4 hours of productivity each week. Conversely, financial confidence can help promote employee engagement and productivity.

  • Lower healthcare costs. Financial concerns can have serious implications on physical health and overall well-being. This can translate into more sick days and increased healthcare premiums for employers and employees. Financial stress and money concerns can also cause employees to forgo preventative or routine healthcare due to potential costs. However, when employees feel financially secure, their physical and mental well-being improves.

  • Stronger talent acquisition & retention. By prioritizing employees’ financial well-being, companies demonstrate that they care for and support their employees. Financial wellness benefits empower employees to achieve their financial goals and future, boost engagement, and set you apart as an employer of choice. 

 

How to build employees’ financial literacy

Here are some ways you can help build employees’ financial literacy.

  • Establish a baseline. Ask your employees for their feedback on the types of financial tools and resources that they would find most valuable. Consider assessing your employees’ financial literacy to establish a baseline and determine where they need help and the types of financial resources that will be most beneficial to your workforce. This will give you a clear indication of what you should prioritize and how you should roll out these benefits and resources.

  • Meet employees where they are. Financial literacy building tools can come in a variety of forms, including in-person sessions, lunch and learns, articles and videos. It’s important to meet employees where they are and offer tools and resources that support diverse learning needs. Additionally, recognize that financial literacy, and ultimately financial confidence, is not established solely through education. To truly drive financial well-being, education needs to be coupled with access to financial planners and digital tools that help employees apply their financial knowledge to achieve their life goals.

  • Embed financial literacy into your culture. From onboarding to offboarding, financial wellness should be top of mind. Engage employees early on by demonstrating how their benefit selections can drive their financial well-being. Show that you're invested in their financial future by for example, contributing to their 401(k) or HSA accounts and offering an employer match. These actions encourage employees to establish healthy financial behaviors and make smart financial decisions.

 

Employers can help narrow the financial literacy gap by offering comprehensive financial wellness benefits that educate and guide employees to achieve their life goals with confidence. Learn how BrightPlan can help.

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