How do you answer these financial questions?
- Do you know how to save for retirement?
- Do you have a 401(k) or other type of retirement account? Are you taking full advantage of it?
- Do you have a savings account?
- Do you have a cushion of money saved for an emergency?
- How do you plan for a home, a baby or other life events?
These may seem like obvious questions with all-too-easy answers for some. But others don't even know how to start answering them. They believe retirement is too far away to plan for, or feel that setting aside "extra" money is impossible. Many people are unaware of the financial tools that are available to them -- tools that can help them save and plan for a secure retirement.
Possessing the know-how of smart financial practices, even at a basic level, can help individuals in their everyday lives. If we don't feel financially secure and instead worry constantly that our next pay check won't cover the mortgage, next week's groceries or gas for the car, we're more likely to be frustrated and distracted both at work and at home.
But if you haven't learned these basic financial skills, who can you turn to for help with your financial education?
Your employer -- according to "Financial Education for Today's Workforce: 2014 Survey Results," a new survey from the International Foundation of Employee Benefit Plans, which asked 397 organizations about their financial education initiatives. Nearly two in five employers believe it's their responsibility to educate their employees on financial issues, including pension and benefit options to help their staff manage financial challenges. Overall, a majority of employers rated the financial savviness of their workforce as medium to poor, which has had a negative impact on job performance -- specifically focus, morale and absenteeism.
This has been a growing trend over the last five years, and at the International Foundation, we have seen a variety of educational programs offered to staff by employers. In fact, more than two-thirds of organizations have taken it upon themselves to provide at least one type of financial education to their employees.
While traditional programs such as retirement planning benefits, investments and savings are the most common offerings, the findings show that employers are beginning to move beyond these typical offerings to better reach their employees. Employers are finding that successful education depends on customization. Offering education in multiple languages, to spouses, or based on specific criteria such as age, income or life events will increase both interest and the number of employees who benefit.
On average, only one-third of staff takes part in their company's financial education programs. At the International Foundation, we hope to see continued growth in financial education programs as this type of knowledge becomes increasingly more vital to an individual's overall well-being.