financial literacy Archives

Financial Literacy Month: What Makes a Great Financial Literacy Strategy?

by Trevor Duggins | Apr 2, 2024 | Blog

Financial Literacy Month: Fundamentals of Financial Literacy. A quality benefits strategy should include financial literacy tools to better support employees.

April is Financial Literacy Month, which recognizes the role that financial education plays in a person’s long-term success and stability.

Without the right education, your employees are much more susceptible to financial hardship. According to a Forbes Advisor survey, 68% of Americans say financial regrets from 2023 caused them stress in the following year. However, compensation alone isn’t enough to cultivate a worker’s financial well-being.

Successful financial literacy requires a holistic approach, one that recognizes financial stress as a complex issue and offers many solutions to help address employee pain points. Here are the key components of a successful financial literacy strategy, plus how you can use the right benefits to improve the quality of life for your team.

1. Budgeting and saving skills are the foundation of financial literacy.

Unfortunately, 44% of Americans can’t pay $1,000 for an emergency expense from their savings. So when a financial emergency occurs, they may be forced to rely on credit cards, personal loans or other types of consumer debt. Employees need a reliable savings account to face tough financial setbacks, and building savings starts with the right budget.

Employee financial wellness programs are the first line of defense when it comes to teaching employees to budget and save. These helpful, interactive platforms teach foundational financial skills through a mixture of reading materials, interactive tools and customizable financial guidance.

These programs are in high demand among employers and workers alike. In PNC’s Financial Wellness in the Workplace Study, 80% of employees said they would stay longer with an employer that offered more financial wellness benefits.

2. Debt management skills help employees plan for a debt-free future.

Understanding how debt works is one of the most important aspects of employee financial literacy. The average American adult holds around $104,215 in debt across mortgages, auto loans, student loans and credit cards, according to data from the Federal Reserve. The average debt for Millennials alone rose more than 8% in 2023.

Dealing with long-term debt issues can lead employees to postpone other major financial decisions like buying homes, getting married or starting a family. According to a Bankrate survey, nearly 60 percent of U.S. adults with student debt have put off making important financial decisions due to that debt. Delaying major milestones puts employees behind their peers and makes it difficult to build long-term wealth.

To combat debt, employers can use a variety of strategies, including loan contribution plans and tuition reimbursement. Look for tools to help employees visualize and track the repayment process, with an emphasis on understanding interest costs.

3. Don’t overlook retirement and investing skills.

The ability to save for a secure future is one of the most important reasons to teach financial literacy. Retirement plans are core to building a solid foundation, but many Americans are still not saving enough.

According to the St. Louis Federal Reserve, in April of 2023, personal savings only accounted for 4.1% of disposable personal income. This means that Americans are saving only a small percentage of their wages, which won’t be enough to fully support a retirement plan. These numbers also represent a sharp decline from the pandemic when the majority of Americans saved upwards of 30% of their income in April of 2020. Without a proper savings plan, employees may have to work past retirement age.

While employer-sponsored retirement benefits are almost always offered to full-time employees, many workers overlook their existing benefits due to a lack of education. Use your financial literacy strategy to target retirement planning. Doing so can improve the take rate of your existing benefits and help employees feel more confident planning for the future. In a 2023 MetLife study, 62% of employees said understanding how to use their benefits would give them more financial stability.

4. A successful financial literacy strategy knows that accessibility is key.

Although online resources built to improve financial literacy are out there, it doesn’t mean they are all accurate or accessible. Education for all ages, incomes and experience levels is the most important factor for a successful financial wellness program. Even employees earning more than $100,000 a year struggle with debt and issues paying bills.

In fact, financial concerns can be completely different based on the individual’s age group. According to Business Insider, building a savings account is one of the most pressing stressors for Gen Z, while older millennials are generally more concerned about credit card debt. Both of these issues require specific solutions and it can be difficult for employees to find the answers they are looking for.

A financial wellness benefit offers an all-in-one package where employees can ask questions and learn how to avoid common pitfalls.

Best Money Moves is a mobile-first financial wellness solution designed to help dial down employees’ most top-of-mind financial stresses. As an easy-to-use financial well-being solution, Best Money Moves offers comprehensive support toward any money-related goal. With 1:1 money coaching, budgeting tools and other resources, our AI platform is designed to help improve employee financial well-being.

Whether it be retirement planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. We have robust benefits options for employers, regardless of their benefits budget.

Our dedicated resources, partner offerings and 1000+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

3 Ways to Boost Women’s Financial Literacy and Wellbeing

by Amirah Ford | May 9, 2023 | Blog

3 ways to help boost women’s financial literacy and wellbeing. Female employees face disproportionate financial hurdles. Here are 3 ways to help boost women’s financial literacy and wellbeing.

Money stresses out most people. Women, however, worry about money more than men. In fact, women have lower levels of financial literacy and wellness compared to men, according to a TIAA report. And when factoring in race, too, Black and brown women have even less financial literacy than their white women peers.

Employees are increasingly relying on their employers for financial wellness support and guidance. Learn more how companies with any benefits budget can help boost women’s financial wellness, and ultimately help address the gender gap in financial literacy and wellbeing.

3 ways to boost women’s financial literacy:

1. Help women balance household finances with financial wellness resources

Nearly 90% of women either control household finances or manage household money jointly with a partner, according to a study from GoBankingRates.This includes balancing checkbooks, paying bills on time and other financial responsibilities. Companies can help women shoulder this load, by providing financial wellness resources with tactical support.

For example, budgeting tools are a visual, intuitive way for employees to track their finances. They can help women and their families plan and work toward long-term financial goals, such as buying a home or saving for a luxury vacation.

Another tactical financial wellness tool are loan calculators. When taking out a home or auto loan, loan calculators can help employees compare between loans and estimate their payments. Employees can leverage loan calculators to make better financial decisions for their long and short-term goals.

2. Deliver financial education tailored toward women

Studies have shown that with greater financial literacy comes improved financial wellness. In addition, people with greater financial literacy are better prepared to weather economic uncertainty, according to TIAA’s report.

Rather than offering general financial education, companies have started providing financial events, literature and marketing tailored toward women. For instance, some companies host financial webinars and events on topics that resonate with women, like planning financially for pregnancy or a wedding. Financial resources and educational opportunities can equip women with the tools to boost their financial understanding and wellbeing.

3. Provide 1:1 financial advising and planning

When it comes to financial advice, it’s best to receive personally tailored financial advice. Everyone has different goals, aspirations and financial situations. With one-on-one financial advising, employees can get the personalized care they need.

For instance, where some women may need help planning for a family addition, not all women may want children or to get married. While some women might need help combining their finances with a new spouse, others may be facing a divroce and need help transitioning from a double-income household to a single-income household. Instead of providing cookie cutter advice, one-on-one financial advising takes employees’ personal circumstances into account to devise an individualized gameplan.

Today, companies are well-positioned to help employees boost their financial wellness and address the financial literacy gap between men and women. With financial wellness benefits and intentional marketing, companies can empower and educate the women in their workforce.

Looking for a financial wellness program? Try Best Money Moves!

Best Money Moves is a mobile-first financial wellness solution designed to help dial down employees’ most top-of-mind financial stresses. As an easy-to-use financial well-being solution, Best Money Moves offers comprehensive support toward any money-related goal. With 1:1 money coaching, budgeting tools and other resources, our AI platform is designed to help improve employee financial wellbeing. Our iplatform, with a human-centered design, is fit for employees of any age.

Whether it be retirement planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. We have robust benefits options for employers, regardless of their benefits budget. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

How Much Does Financial Illiteracy Cost Your Team?

by Trevor Duggins | Apr 12, 2023 | Blog

How much does financial literacy cost your team? Financial illiteracy is a growing problem among American workers. Here’s how financial wellness can help your team thrive.

Financial illiteracy is a growing problem among Americans and it could be costing your people dearly. An NFEC survey found that financial illiteracy costs about $1,819 per person on average. In fact, 15% of those surveyed said their lack of knowledge cost them upwards of $10,000. Luckily, the right financial wellness program can help your team.

What is financial illiteracy?

Financial illiteracy refers to a person’s lack of understanding about personal finance and related concepts. Financial illiteracy comes in many forms including:

Misunderstanding basic financial concepts such as interest or inflation
Being unable to save money, create an emergency fund or build a budget
Misusing credit cards and struggling to pay off debt
Taking out high interest loans with no repayment plan
Missing out on long-term investment/retirement opportunities

A lack of financial literacy can prevent someone from managing their day-to-day financial affairs and slow a person’s ability to long-term goals. According to a Banrakate study, 56% of Americans are unable to cover $1,000 for an emergency fund, making it difficult to plan for the future. People who are financially illiterate may also be unaware of the consequences of poor financial decisions, potentially leaving them trapped in cycles of bad debt.

Annually, the biggest culprit of money lost to financial illiteracy is credit card interest and late fees, totalling around $120 billion among all Americans, according to the same NFCC survey. The next highest offenders are luxury spending at $64.8 billion and overdrafts at $17 billion. Other common financial drains included identity theft and fraud, which cost Americans around $13 billion collectively.

Many of these costs would be otherwise avoidable, if employees had access to more comprehensive financial education.

How can financial illiteracy impact a workforce?

Financial illiteracy can lead to stress, poor decision making and decreased productivity while at work, among other things. Even the highest earners aren’t safe from the dangers of financial illiteracy. A 2022 survey conducted by Willis Towers Watson found that 36% of Americans making over $100,000 a year still lived paycheck to paycheck — an amount double that of 2019.

These financial issues may increase stress levels that can affect employees while on the job. A Morgan Stanley survey found that 78% of employees with high financial stress see its effects while at work. Another 49% claim that they spend 3 or more hours during their work week dealing with their financial issues. Beyond being a major distraction, this additional stress has many dangerous mental health implications for employees.

A 2019 survey found that employees with money worries were 4 times more likely to suffer

from depression and 3.4 times more likely to suffer from anxiety and panic attacks. Because of the major effects financial struggles have on employees, many employers have started to take notice. According to Forbes, 80% of employers in the U.S. report that financial stress is lowering their employees’ productivity. These companies also lose almost half a trillion dollars a year due to employees’ financial stress.

These issues have clear and measurable effects on workers, so solving them is in the best interest of every employer.

How can employers improve financial literacy?

Employees make some of their most important financial decisions in the workplace, whether they are beginning a retirement plan or choosing a health insurance provider. So, providing financial education at work can help combat the most common consequences of financial illiteracy.

Developing a strategy that teaches the basics of personal finance can be a great boon for your employees. Financial wellness programs can cover topics like budgeting, saving, investing and debt management.

The same Morgan Stanley survey found that around 74 percent of workers consider it important for their employer to provide financial wellness benefits, while 60 percent expressed their increased likelihood of staying at their current job if financial wellness benefits were offered. A 2020 survey from HR Daily Advisor found that 90% of employers who offered financial wellness benefits say that the programs had a positive impact on employees.

Financial literacy is an essential skill that employees need. The cost of financial illiteracy can be significant for them and for your own business. Help your employees improve their financial literacy with Best Money Moves.

Best Money Moves is a mobile-first financial wellness solution designed to help employees dial down their financial stress and meet their most top-of-mind financial goals. With budgeting tools and personalized money coaching, users can easily receive compressive financial advice right from their phones.

Best Money Moves is designed to guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings, and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Addressing the Employee Financial Literacy Gap

by Sam Johnson | Oct 18, 2022 | Blog

Addressing the employee financial literacy gap. Here’s how a lack of financial literacy can affect your employees and what you can do to help solve the problem.

Only one-third of Americans have a solid understanding of interest rates, mortgage rates, and financial risk, according to the Financial Industry Regulatory Authority. This measure of financial literacy has fallen 19 percent over the past decade and is estimated to have cost Americans more than $415 billion in 2020 alone.

The impact of employee financial illiteracy

As financial literacy has become less prevalent amongst employees, the effects have been felt from the workplace to the home. This can take a toll on an employee’s mental health and cause a burden they carry with them to work. According to PWC’s employee financial wellness survey, 56% of employees are stressed about their personal finances. This dearth of knowledge not only costs individuals but businesses as well. Employees that are financially stressed lose around a month of productive work days a year, as per Neighborhood Trust.

The impact of a financially stressed employee can branch out to all members of the office. Workers that are missing chunks of time due to stress can delay projects and cause additional stress on other employees. Providing employees with a way to achieve financial literacy can help alleviate these concerns. According to SHRM, financially literate employees are less stressed and more focused. This results in higher productivity by way of less absenteeism and lower healthcare costs for the employer.

How to help address the employee financial literacy gap

One of the easiest ways to assist employees on their journey to financial literacy is by providing a financial wellness platform in their benefits package. Not only do programs help workers, but a thorough financial wellness benefit can also help employers in hiring. 84% of employers said that offering a financial wellness program assists in employee retention and 8 of 10 said that a quality program helps attract higher quality employees, according to Bank of America.

Providing a comprehensive financial wellness program is a signal that an employer understands the problems of their employees and works to solve them. ¾ of financially stressed employees are more attracted to a job that cares about their financial well-being. Also, assisting employees can put money back into the pocket of employers. As per the ASPPA (American Society of Pension Professionals and Actuaries), 80% of employers said that financial wellness programs result in increased workplace productivity.

Find your employee financial literacy solution with Best Money Moves.

Best Money Moves is a mobile-first financial wellness solution designed to help employees dial down their financial stress and meet their most top-of-mind financial goals. With budgeting tools and personalized money coaching, users can easily receive compressive financial advice right from their phones.

Best Money Moves is designed to guide employees through the most difficult financial times and topics. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Retirement Concerns: Is Financial Literacy the Solution?

by LizStevens | Apr 17, 2019 | Blog

Retirement concerns: is financial literacy the solution? Those workers that do have a 401k aren’t saving enough to cover expenses in retirement, even when employers match contributions.

Retirement is a far-off goal most Americans don’t even think about while they’re paying down debts, struggling to pay for childcare and taking care of aging parents. It’s become so disconnected from reality that 20 percent of Americans are actually basing their retirement plans on winning the lottery, according to research by Stash.

Americans Are Not Saving Enough for Retirement

Not saving enough for retirement is the number one fear among middle-income earners, and with good reason. Four researchers at Kellogg School of Management at Northwestern University recently found three-fourths of American workers with defined contribution plans like 401(k)s aren’t saving enough to maintain their standard of living later in life.

Can Financial Literacy Solve Retirement Concerns?

Nearly half of U.S. adults failed to correctly answer basic financial literacy questions in a recent annual assessment.

The P-Fin Index by the TIAA Institute asks 28 questions across eight functional areas of finance including: earning, consuming, saving, investing, borrowing/managing debt, insuring, comprehending risk and go-to information sources. American adults scored highest in the area of borrowing/managing debt and lowest in comprehending risk.

This year, the P-Fin Index included several new questions indicative of financial wellness. According to the report by TIAA Institute, “Greater financial literacy is positively associated with the capacity to handle a financial shock, saving for retirement on a regular basis, being unconstrained by debt and other indicators of financial well-being.”

Financial Wellness Programs and Financial Literacy

Financial literacy is indicative of financial wellness and high school curriculums across the country are adding personal finance courses as a requirement for high school graduation to start addressing the widespread lack of financial literacy.

What about the half of U.S. adults who couldn’t answer basic financial literacy questions? How can they learn the skills they need when they don’t know where to begin?

Financial wellness programs help workers improve financial literacy, pay down debt and save for retirement. They are a valuable employee benefit and with the right financial wellness program, like Best Money Moves, employees are given the tools and resources to help them attain financial literacy while they better their financial wellness.