“Not again!…Another unexpected bill” said Charlie, a hard-working professional millennial who is now stressed once again trying to figure out how to pay his latest unexpected expense. Charlie went from being the top in the graduating class to now earning well over 6 figures, yet still he somehow lives paycheck to paycheck. Charlie’s story is unfortunately not an anomaly, but instead is the story of so many employees who are not able to focus fully on their workplace assignments because they are instead stressed financially. Employees who are well-equipped to manage their finances can better focus on their tasks while at work, not to mention pay less attention to personal stressors from their home life. Not convinced? Then here’s a comprehensive list of reasons why financial literacy is imperative in the workplace.
Financial Literacy Promotes Personal Finance Education
Let’s face it – people work to make money. Having a sustainable income helps to create a better lifestyle or maintain a desired lifestyle for someone and their family. Another reason people work is to have a lasting and positive impact in the world, which is actually my favorite reason. However, in America and practically all around the world, we need money to survive. In order to have a successful financial future that we work so hard to attain, it’s important for employees to be aware of their personal finances and how best to manage them. Financial literacy helps employees understand their spending patterns, investments, and borrowing techniques. It can also help them create a plan for retirement and protect themselves from the stress of unexpected financial challenges that will arise. By employers offering financially literacy outlets, employees are better equipped to make informed decisions about their money and their lives; thusly decreasing financial stress and increasing workplace productivity.
Financial Literacy Improves Career Opportunities
Workplaces that offer financial literacy outlets to their employees directly show that they care about their employees making responsible decisions about their money and their overall financial health. Let’s revisit Charlie, who received the unexpected bill earlier. If Charlie had a well funded emergency savings account thanks to his knowledge of financial literacy, the unexpected bill would not cause as much financial stress or anxiety. So instead of Charlie being stressed and potentially considering other ways to make more money through means like a new employment opportunity, Charlie would have an emergency savings account available to take care of the unexpected bill. However, without financial literacy being offered as an added benefit and not ever being taught how to manage money, Charlie is more stressed and less productive in the workplace due to his unanticipated expense. When employees are familiar with different types of investments, budgeting techniques, and debt management tips, they can safeguard themselves from unnecessary risk and build a solid financial foundation for the future. Employees who are less stressed about their finances are more likely to make sound career choices instead of simply taking another job offer due to an increase in pay.
The United States Military actually takes the same approach through a term called financial readiness. The meaning behind financial readiness is that when a service member is equipped to manage their finances they are able to focus more on the task at hand, to protect and defend our country, instead of being stressed about their finances or how their family will cover expenses while they are deployed. During the time I was contracted to work at Naval Air Station Jacksonville for the United States Navy, I personally saw first hand the impact of service members who were not financial ready- they were stressed beyond what they ever imagined and were ashamed that they were even placed into the circumstance. One junior enlisted service member was going to leave the military to take a work opportunity back in their home state, a gig that would pay about three times what they were currently making- however, the service member absolutely despised their hometown because of childhood memories, and the new position was well known for its toxic work environment. After I worked with the service member through providing financial counseling for a few months, they decided to stay in the military! But here’s the real success story– fast forward a few years to present day the service member recently shared with me that they were accepted into a promotion program from enlisted to officer and now plans to retire from the military as an officer!! (Translation- This service member went into serving the military at the lowest entry level position and will retire from the military with a senior tenured position that is difficult to obtain- example you start to work at McDonald’s as a crew person and later retiring now owning 5 McDonald’s franchise locations-) That is the impact of financial literacy in the workplace instead of the service member making an unsound career jump where they would not have been happy they became financially ready and is now making strategic career moves.
Financial literacy is essential for everyone in the workplace from the employee to the employer to achieve their goals with enhanced productivity and less stress. By maintaining financial literacy, employees can make better decisions that will improve their lives both now and in the future. By employers offering financial literacy opportunities and outlets your employees will have enhanced focus, feel cared about and improve their career performance within your organization.
Looking to improve your employee’s financial literacy, or even your own? Then why not hire Adrienne Taylor-Wells, an Accredited Financial Counselor that can aid with any and all of your financial needs. Be sure to contact her and check out our services at tailoredwealthsaver.com for more information, and learn just how much of a difference financial literacy can have on your life.