- The importance of financial literacy
- What do financial literacy programs look like
- The cost factor – Financial education doesn’t have to be expensive
- Options in financial literacy for employees
- Benefits for the organization on training the employees on Financial Literacy
- Collaborating with a good academy
- To sum it up
However, if your employees are healthy, happy and eager to work, as a business owner, you will see a positive change in the fortunes of your firm. On the other hand, if they are stressed and anxious, you will see the figures drop.
One of the most important reasons for stress among employees is financial worry. A majority of the people suffer from money-related problems as their financial management skills are not the best. It is, therefore, your duty and responsibility to introduce a financial literacy program in the workplace to ensure your staff understand the basics of financial literacy and manage their money better.
Once your employees are financially literate, they would be able to manage their own money much better and hence their stress levels over financial issues would eventually reduce! This would surely lead to healthier and happier individuals who would contribute immensely to the growth of the organisation.
The importance of financial literacy
As stated, it is very important to introduce the concept of financial literacy among your employees.
Here are a 5 reasons to highlight the importance of financial literacy:
1) Understanding investments –
Very few people can solely rely on their salary to take care of all their financial goals. Wealth creation is extremely important and that mainly happens with the help of investments. Unless you invest a part of your money, you will seldom see it grow and you will struggle to meet your long-term financial goals.
Pro Tip: A good financial literacy program teaches your employees about investments and guides them on how to multiply their wealth with the resources at hand.
2) Managing debt –
Borrowing money has become tremendously commonplace in the modern era. There are very few individuals who do not opt for bank loans. From home loans to personal loans, from education loans to car loans, an average person has many loans against his name. However, managing this debt can become a challenge if a proper debt management system is not implemented.
Pro Tip: A good financial literacy training talks about debt management and ensures people don’t struggle to pay off the loans they have.
3) Effectively clearing bills –
Apart from loans and EMIs, most of us struggle to pay a fat bunch of bills each month. From credit card bills to utility bills, the total bill payment amount is large enough to cause stress and anxiety among many!
Pro Tip: This is why you must insist that your employees undertake a financial literacy program and understand the ways in which the bills can be effectively cleared each month.
4) Planning for retirement –
As a responsible employer, you will pay your employees their monthly salaries. This would help them to take care of their livelihoods. But what happens after they retire? You would not be paying them their monthly salaries any longer so how would they sustain?
Pro Tip: To make sure they have a financially secure retirement, you need to train them about retirement planning. Do this with the help of a financial literacy program at the workplace.
5) Budgeting –
And last but not least, the importance of financial literacy at the workplace lies in teaching the employees budgeting.
Pro Tip: They need to know all about making a budget and sticking to it as that is the only way in which they can cater to their monetary needs and still save money for their future.
A good financial literacy program touches upon all these areas and provides wholesome training to the employees of the company.
What do financial literacy programs look like?
A financial literacy program, as the name suggests, is a comprehensive education program that focuses on teaching the participants the basics of monetary management. Here are some common components of a standard financial literacy program:
1) Step #1: Budgeting and saving –
Unless a part of the money earned is saved, a person will struggle financially. A financial program aggressively trains the participants on how they can budget and save. Making a budget may seem like a simple task, but in reality, it is actually quite complicated.
One needs to know their spending patterns, financial responsibilities, debt system, etc and then make a proper budget. Once a good budget is in place, the payments and savings both can happen. Budgeting and savings thus form an important part of any financial literacy program.
2) Investments –
As mentioned above, investments are the key to financial independence. However, the investments should be proper and effective, sadly, a poor investment can lead to heavy losses and the investor may even end up losing all his hard-earned money.
This is why a person requires extensive training and guidance before he begins investing his money. A financial training program tells the participants about the different investment channels, the risks associated, etc and helps them to choose the correct platform.
3) Taxation –
Taxation is a very important part of any financial plan. Most people who earn incomes pay taxes in some form or the other. Though commonplace, taxation is still a topic that baffles many.
If your employees are a bit confused about their taxes, enrol them in a financial literacy program and help them to understand all about the taxation system.
4) Maintaining good credit –
A financial literacy program teachers employees about maintaining good credit. There really is no alternative to having a good credit score as that allows a person to enjoy sound financial wellbeing.
Your financial journey becomes a lot smoother if you maintain good credit and this is why it is so important to learn about it.
Want to know more about financial wellness and it’s importance, read our blog to know more.
5) Staying away from frauds –
Sadly, frauds and cheats are rampant in the financial world. Many a time, unsuspecting people fall prey to these fraudsters and end up losing all their money. From disguising as bank employees to investment gurus, these fraudsters are there at every corner.
When your employees undergo a financial literacy program, they learn about the ways in which they can identify and subsequently, stay away from these cheats.
As you can see, these are very important financial topics that everyone needs to understand. When you arrange for a financial training program, your employees get wider knowledge about these economic matters and that benefits them to a large extent.
The cost factor – Financial education doesn’t have to be expensive
As a small business owner, you may be apprehensive about the costs involved in arranging a financial training program for your employees. The good news, however, is that such programs are often affordable and never too expensive to worry about. There are some very good and successful financial academies that offer customised training programs to company employees at very economical costs.
Options in financial literacy for employees
These days, employers around the world opt for new and interesting ways to impart financial training to their employees. From financial advisors coming in, to online courses being set up, there are indeed many options for imparting financial education among the employees. Some of the most popular options include:
1) In house financial advisor –
You can start off by employing a financial expert who can offer his or her advice to the other employees whenever needed. Many a time, employees feel tremendous stress and anxiety and fail to cope up with their financial troubles.
Having help at hand at such times can be of immense help. Also, when the advisor is a co-worker, the employees feel more comfortable discussing their issues, in comparison to discussing them with a complete stranger.
2) Option for teleconferencing –
Your next option is to set up a teleconferencing facility. You can tie up with a financial education firm and offer a phone number to your employees.
They can call the number and speak to the financial advisors and get the financial training they need.
3) Arranging physical workshops in the office –
Another option is to arrange for a financial literacy workshop in the office premises during office hours. There are many trainers who would come down to your office and conduct a fixed-duration workshop.
It can be a monthly affair or a bi-yearly one, depending on what your requirements are. The employees can join the workshops and get the training they need to ease out their financial struggles.
4) Signing up for online courses –
Many offices worldwide opt for the very popular option of online financial courses. There are many academies that offer excellent financial literacy for employees through these online courses.
In fact, there are multiple courses on Financial Literacy for your employees on Koppr Academy that can benefit your employees. You can opt for the same. All you need to do is to provide the login details and inform the time and ask all the employees to log in. they can receive the training remotely and stay one step ahead in the economic game.
Opting for Online Financial Literacy Courses on Koppr would not only be cost-efficient but make the most sense in the post-COVID era where everyone can access the same at their ease without having any physical interaction. This would keep their productivity ongoing.
You can opt for any of these options to ensure your employees receive the financial education and training they require. You need to ensure that the training they receive is of superior quality. Unless this is ensured, your employees may not gain completely from the training you arrange.
Benefits for the organization on training the employees on Financial Literacy
If you financially sound employees, your organisation will benefit immensely. Here are some ways in which that can happen:
1) Increase in productivity –
There can never be enough emphasis on how important and beneficial it is for the employees to be mentally fit. If they are constantly bogged down by stress and anxiety, they will remain preoccupied and that will prevent them from delivering their best. Even the most talented employees won’t be productive enough for your business to flourish.
And as we all know, financial stress is one of the main reasons why people lose their mental stability and get into tremendous bouts of anxiety. This causes them to lose their focus. If their finances are sorted, they are more relaxed and can focus more on the job at hand. This would increase the levels of productivity and in case benefit your organisation to a large extent.
Read a blog on How can you improve the mental health of employees in your workplace?
2) Easy to retain employees –
An employee who is financially stressed would be very tempted to change his job and opt for a new position where the salary is just marginally higher. He or she may not even give a lot of thought to the process of changing jobs at such a time. This can be quite damaging to your firm, as losing a capable employee who you trained over the years can be detrimental to the company.
If the employee is financially secured, he or she will be happy to earn the current salary and definitely will not quit the job just for the lure of a few extra bucks.
Here are top 9 employee retention strategies that will help your to retain the best talent in your organization.
3) Good reputation for the company –
When stressing the importance of financial literacy for employees and arranging various training programs for the same, you end up taking good care of your workers. This works in your favour and also increases the reputation of the organisation. People identify you as a good employer who thinks about the employees.
This increases your reputation in the industry and the best candidates want to work for your company. So financial literacy for employees has this added benefit that you can easily amass.
4) Financial gains –
Last but not the least, you get some economic gains of your own when you ensure your employees have proper financial knowledge. To begin with, the employee sick days reduce quite dramatically once the employees know how to cope with the financial stress around them.
Then, there is also a lowered healthcare-related expenditure as the employees stay physically fit and healthy when they are mentally relaxed and stress-free. And finally, employees who aren’t distracted by their personal money matters will definitely perform better and add to the revenue generation of the organisation. All these factors would prove to be financially fruitful for you, the business owner, in the long run.
Any organisation would benefit from having financially competent employees who are happy and perform their best. This is one of the biggest reasons why you should stress on arranging programs that aim to increase the financial literacy for employees.
Collaborating with a good academy
As you can clearly see from the points mentioned above, providing financial training to your employees is of utmost importance and as a business owner, you simply cannot skip doing this. However, you must also remember that providing proper and insightful training is vital. Many employers make the mistake of appointing sub-par financial trainers. This causes a lot of harm and the employees receive poor quality financial education. This leads to more problems and the training proves to be a disaster! You need to steer clear of all such matters. You can start off by hiring or collaborating with a highly competitive and able financial academy such as Koppr Academy.
Koppr Academy is an online financial training platform that offers financial literacy programs with the help of video tutorials prepared by financial experts. The course material is carefully curated and designed in a way to promote financial literacy for employees.
The courses can be accessed online by your employees 24×7. They can learn about various financial aspects such as retirement planning, investments, debt management, budgeting and so on. The courses are very affordable and this makes it easy for you to enrol your employees into these programs.
To sum it up
When it comes to money, most people are still quite conservative and prefer to be discreet. The reluctance to discuss their financial matters and the urge to manage it all by themselves lead to financial stress in many people. This is why you must integrate some methods into the regular work to inculcate the basics of financial literacy among your employees. A good way to do this is to introduce a financial literacy program for your employees.
After going through all the points mentioned above, the importance of financial literacy can not be ignored any longer. So get associated with a good academy like Koppr Academy and provide your employees with all the aid they require and soon you will have a group of financially sound employees who would deliver their best performance at work.
To a step toward spreading financial literacy we have a FREE course on Financial Planning. Enroll Today!