The Importance of Financial Literacy in the Workplace

Importance of Financial Literacy?

With the recent global pandemic, rampant inflation, and increasing financial responsibilities, financial literacy has become more important than ever. Learning how to effectively manage your money is an invaluable skill that will pay dividends throughout your life.?However, many are not comfortable or confident in their financial knowledge. All too often, key financial skills such as personal financial management, managing debt, budgeting, saving, or investing?have not been taught in the classroom. As a result, many Americans may be?introduced to these concepts with little to no background upon transitioning into the workforce. ?

?It is no surprise then that?financial stressors?represent a?significant challenge facing employees of all income levels?today. Research from the Global Financial Literacy Excellence Center (GFLEC) found that “many working-age Americans (age 25-60)?struggle?with their finances:” ?

·??????36% are financially fragile, i.e., unable to handle an unexpected shock.?

·??????57% have not tried to figure out how much they need to save for retirement. ?

·??????48% feel they have too much debt. ?

·??????46% are not satisfied with their financial situation. (GFLEC, 2019)?

?Additionally, in a 2022 survey from the American Psychology Association (APA), 87% of American adults indicated that money was a top stressor. Moreover, 7 in 10 Americans live paycheck to paycheck, further highlighting the growing need to address financial education. ?

?Financial Literacy in the Workplace?

?Financial health?is directly tied to an employee’s overall well-being. Poor financial health causes stress which can impact physical and mental health. Employers should also be concerned.?Stressed employees are more likely to take sick days, be distracted at work (presenteeism), experience a dip in job performance, and?are less likely to be?engaged. Furthermore, employees?are gradually looking toward their employers for assistance with their diverse financial needs.?

?Closing?

Luckily, employers are in a unique position to provide support. Work is where employees receive their pay and oftentimes make important decisions regarding taxes, tuition assistance, health insurance, and retirement. By investing in their employee's financial health, employers can?reduce employee stress,?boost productivity & performance, increase job satisfaction, reduce absenteeism, improve retention, and lower healthcare costs.?Studies show that?workplace financial education can promote “specific financial behaviors” such as budgeting, saving, and increasing retirement contributions. Providing financial education opportunities that address a variety of needs in the workplace?will help employees make sound decisions, allowing them to?take full advantage of their benefits packages. ?

What are you waiting for?! Contact?LifeWork Strategies?for assistance in building a financially fit?workforce today!?