Financial stress is widespread among Americans and has various root causes. Indeed, part of the issue in many households is that there isn’t enough income. While the American Psychological Association has reported that a startling sixty-four percent of adults cite money as a stressor, that figure increases to seventy-three percent for households with less than $50,000 of income. An additional concern is that almost twenty percent of Americans spend more than they earn no matter the amount of income, and many are woefully unprepared for unexpected financial outlays.
Interestingly, while required financial literacy courses are still uncommon, young adults who took the courses in high school are less likely to use high-interest loans than those who did not have to take such classes, according to FINRA (the Financial Industry Regulatory Authority.) FINRA also reports that older adults who are overconfident in their financial savvy take more risks than those with a more realistic view of their financial savvy. Finally, current research shows that most millennials do not understand basic financial concepts.
One reason why employers care about their employees’ financial stress is productivity. If workers are worried about their bills, they aren’t focused on their work. In fact, PricewaterhouseCoopers completed a study in 2020 which determined that half of the employees worried about money are less productive, spending as many as three hours a week handling personal financial problems. In addition, lower stress can reduce absenteeism and even lower health care costs. Also, financially literate workers have an easier time analyzing the costs and benefits of their insurance options, including the intricacies of a high-deductible plan.
Surprisingly, it’s not as challenging as it might appear. Even offering a partnership with a sound local credit union or community bank can go a long way toward helping your workforce improve their understanding of financial issues. Significantly, many credit unions (nonprofit financial institutions that operate much like banks but are often community-based) offer seminars to their members on topics ranging from trusts and wills to long-term care insurance, investments, and retirement planning. Your company may also be able to identify resources at a nearby college that provides adult education.
In addition to free resources, various providers have low-cost online training options available. You can give your workforce access to a library of topics, including some of these:
Helping your employees improve their understanding of financial topics can help them cope with potential economic crises, develop smarter budgets, increase their likelihood of planning for the future, and help them avoid scams and other financial traps. They will appreciate the help, and the company will benefit from their success. Talk to your Taylor Benefits consultant for more ideas.
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