The financial literacy of employees is directly connected to their wealth and wellbeing. Right now, more and more company leaders understand that by empowering their workers they are boosting their businesses and increasing the productivity of their companies. Financial literacy also promotes a better understanding of money in general, which raises the overall level of life of the company’s employees. This includes making informed decisions around money while reducing the pressure connected to having enough finances, savings, and the stress that builds up eventually.
All these issues can end up distracting the workers from their jobs, lowering their productivity levels, and causing anxiety. Things like inflation, high cost of living, and pandemic lockdowns in the past caused many employees to experience financial troubles and money loss. Now it’s up to employers to improve their financial literacy by providing necessary educational material, workshops, webinars, and instruments that will help them manage their finances better. Let’s dive deeper into the reasons why you should take care of the employee’s financial literacy and the various ways you can do it.
Why You Should Educate Your Employees About Money
Most financial issues arise because people aren’t educated about money-saving strategies and financial management. Some of them also take on loans that later become harder to pay out as the economic situation changes. With issues like that coming up all the time, it’s important to shed some light on them by providing the employees with information on various financial topics that can improve their overall wellbeing. Here are a few more reasons you should be aware of.
1. Employees Become Financially Savvy
Financially literate employees make more informed decisions. Not only can they manage their budget better, but they also become more knowledgeable about debt and loans. For example, when applying for a loan, they can choose to do it over the Internet. If they apply for LendUp loans online they will have better interest rates and a much shorter application review period. Employees need to be educated about things like these so they don’t end up losing money.
2. They Learn About the Benefits They Have
Sometimes people change their jobs simply to cover their expenses. With the prices rising all the time, workers may end up looking for higher income without even knowing about the benefits they already have. We’re talking about retirement savings and different types of health coverage. Many people don’t even realise what’s available to them, that’s why it’s important to provide them with all the necessary information.
3. They Know How to Handle Their Finances
We’re talking about both managing the budget and things like investments and basic knowledge about passive income. It’s not uncommon to have inequality gaps between two employees with the same level of income just because one of them is better educated about how to use finances, save money, and manage their budget. Finance-savvy employees are wealthier and happier, and that leads to creating a healthy work environment.
5 Ways You Can Improve the Financial Literacy of Your Employees
Financial literacy starts with understanding your relationship with money first. After that, it’s much easier to understand how money is used on a bigger scale. Business leaders can offer their employees a variety of ways to up their money game. Let’s look into some of them.
1. Financial Literacy Workshops
Hire finance professionals to give workshops on various money-related topics. It’s good to start with the basics of budget planning and then dive deeper into more complex topics like investment and how to grow passive income. This will help the employees make better-informed decisions related to finances. You should also provide them with handy financial planning instruments and e-books on the topic.
2. Try Gamified Learning and Simulations
There’s a reason games like Monopoly are so popular and often lead to heated debates. Real-world simulations and gamified learning can help employees develop critical thinking when it comes to finances, and get a better grasp on how money is used in the modern world. These could be games like Cashflow or economic debate clubs that will urge the workers to look for innovative financial solutions, fostering a better understanding of how money can be used to grow businesses and improve one’s wellbeing.
3. Offer Podcasts and Training Courses
There are various ways you can help your employees delve into the financial topic. In-depth financial courses will help the workers understand their money better, improving their spending and saving habits. It’s also important to learn more about debt, loans, and the inner workings of interest rates. Employees can also listen to podcasts covering various crucial financial topics.
4. Make Financial Literacy Accessible
it’s important to demystify the topic of financial management so that even kids can understand it. Most people are afraid to even come close to diving deeper into their finances afraid that it’s too hard to understand. You can offer free digital tools that will help employees build their personal budgets and manage their savings accounts. An AI-driven financial coach can also offer a stress-free way to help workers overcome their financial issues whenever they have the time.
5. Talk About Company Numbers
Not all organisations like to be transparent about their business issues, but if you choose to discuss the numbers with your employees openly, it will give them a much better insight into the inner workings of the company’s finances. Talk about the consequences of certain financial decisions (both good and bad) to demonstrate how various financial strategies work. This will help the employees grasp finance fundamentals better, boosting their curiosity and, as a result, making them more efficient at what they do.
Conclusion
There is a direct link between the employees’ wellbeing and their financial literacy. Not only does it help reduce stress and anxiety related to money, it also boosts their productivity levels and overall efficiency. Business leaders should implement educational programs and offer other ways to help workers make better-informed decisions concerning money, budget planning, investment, and savings. Everyone’s relationship with money starts on a personal level, that’s why educational courses, webinars, and workshops should introduce the basics of financial education and then slowly add more complex subjects that can be related to the business they are working for.
Employers should also try unconventional ways to up the money game of their employees by offering real-time simulations and games like Monopoly and Cashflow that can help them better grasp how to deal with money in various situations. Transparently talking about actual company numbers will further boost the employees’ understanding of different financial strategies and the real consequences of the decisions made by the company.
Author: Denys Zakharchenko – Head of Outreach, wmlinks.net
Photo credit: iStock
