How to Approach Financial Wellness With Younger Employees

Do your employees know how to set up a Roth IRA account? Are they on track for retirement? Can they explain the difference between fixed and variable rates on loans?

The Global Financial Literacy Excellence Center (GFLEC) created a Personal Finance Index to assess each generation’s knowledge of finance. GFLEC’s study found that financial literacy is low amongst Generation Z workers, with two-thirds only able to complete less than 50% of the Personal Finance Index.¹

As an employer or benefits manager, it’s important to help your employees consider their long-term financial health. To help your youngest employees achieve holistic and comprehensive financial wellness (and ensure greater financial security), it's critical for your company to offer a comprehensive financial education program.

This article will provide guidance on how employers can cultivate an educational environment that effectively teaches younger generations the basics of financial wellness.

Establish a Baseline

First and foremost, it’s essential to gauge where your employees currently stand with their financial awareness.

To assess levels of financial wellness among your team members, develop quick pre-tests and surveys on topics such as budgeting, credit cards, retirement savings options, and basic investing concepts. Doing so will provide useful insight into any areas that need to be addressed. 

Keep Reading: How to Survey Your Employees for Your Financial Wellness Program

Additionally, some businesses may find value in bringing in a professional (e.g., a CPA or an accredited Financial Advisor) to give talks on finance basics during company meetings or lunch-and-learns.

Having a knowledgeable expert can offer additional opportunities for questions from staff and access to resources for further learning. 

Focus on Relevant Topics

It is important for employers not only to tailor educational materials about finance but also to offer incentive systems/benefits that address certain aspects of personal finance (such as healthcare payments).

When developing a financial wellness program, employers should offer practical advice that is helpful both at work and in raising/managing family finances at home.

Prioritize Long-term and Short-term Needs

One of the areas where younger employees may struggle is managing their money in the long term and short term. Fifteen million millennials are currently in student loan debt – more than any other generation to date.² It can be exceedingly difficult to invest in an IRA account when these employees may be struggling to not default on their loans.

Therefore, offering workshops highlighting strategies for meeting both long-term and short-term needs can be beneficial. Educators could provide information that will teach them how to better take care of day-to-day expenses while also preparing for bigger financial goals, like buying a home or starting an emergency fund. 

Resiliency

The skills acquired from financial wellness programs go beyond just understanding retirement accounts or even making wise purchases. It’s also essential to understand overall wellness and resiliency when talking about personal finance.

When considering a financial wellness program, employers will want to also focus on issues surrounding anxiety due to money stress – like feeling overwhelmed by debt, recovering from poor credit scores, and learning key phrases commonly used in banking language. 

Risk Management

Additionally, it’s important to understand how to manage and anticipate risks when developing financial wellness. During a course covering risk management, the program might cover insurance strategies (such as disability insurance) or how different types of investments may be managed under differing economic climates.

A holistic financial wellness program should also address possible pitfalls to help younger employees think through their decisions more thoroughly and become aware of the consequences of not following good personal finance practices. 

Workplace Financial Wellness Programs

According to the 2019 PwC Employee Financial Wellness Survey, nearly one-third of workers who had access to financial wellness programs didn't use them.³ Younger employees may be unaware of what the program can offer, or they may simply feel overwhelmed and not know where to start.

However, workplace financial wellness programs offer employees help with medical payments, childcare, student loan assistance, and financial coaching – so make sure they know these resources are available.

Keep Reading: Do THIS to Increase Employee Engagement in Financial Wellness Programs

Digital Tools and Resources

It's crucial to connect younger employees with resources they can utilize. In the digital age, there are endless tools and apps that can help simplify money management. Incorporate these digital educational resources into your financial education program to help employees stay ahead of their finances.

One of these tools is Enrich – the financial wellness platform offering helpful, user-friendly ways to manage money. The fully customizable and personalized program quickly assesses users' current financial situation and evaluates what steps they should take next, such as drawing up a budget or obtaining credit reports.

With thoughtful guidance on retirement planning, debt management, and lifestyle considerations for your younger employees, Enrich makes it easy for your employees to stay in control of their finances. 

Secure your team’s financial future today. Contact Enrich for a demo of our financial wellness platform to get started.

Set Your Employees Up for a Successful Future

The young professionals of today are the future managers, CEOs, and entrepreneurs of tomorrow. It is essential for them to be well-equipped with the tools they need to make wise financial decisions.

Helping your employees gain money management skills will ensure that they succeed not only in their careers but also in their personal lives.

Investing time and energy into developing a comprehensive financial education program is an investment worth making. Educating younger generations on managing finances not only makes them a valuable asset to your organization but can help them lead more prosperous lives.

1 - https://gflec.org/initiatives/financial-literacy-and-well-being-in-a-five-generation-america/

2 - https://educationdata.org/student-loan-debt-by-generation

3 - https://www.pwc.com/us/en/industries/private-company-services/images/pwc-8th-annual-employee-financial-wellness-survey-2019-results.pdf