Should Companies Teach Their Employees the Basics of Personal Finance?

It’s no secret to anyone that Americans have accumulated high personal debt with less than wise spending in the last several years. Savings have been down and debt high by most measures available. The recent economic state certainly has changed consumer behavior and helped surface a real need to pay down debt, save more and spend wisely.

Debt, in my view, is crippling. The loss of a job or the need for extra cash at the time of an emergency are real circumstances for people. Debt clogs us up. It hinders us. It weighs us down. It enslaves us and it simply makes us inflexible to maneuver through these circumstances.

Where do we begin to change the trend? Sure, uncontrollable forces such as the economy that I mentioned will help, but surely there is more. Public schools are making the move to educate children on money management fundamentals and build personal finance curriculum. These children are our future leaders. They are the business owners and the family CFO’s.

Youth Soccer

It reminds me of years in playing soccer and loving the sport. It gave me the opportunity to see and think about what would change soccer in America forever? How would America become a competing powerhouse in the World Cup? It starts with the youth, right? You give them the best coaching and play them against the toughest competition and the future of soccer in America can change.

But, what do we do about the people like you and me who are in the working force today. Our personal finance education may have been minimal in our youth. Unfortunately, most families don’t train up children in this area. So for me it became a passion to learn more about personal finance when life got serious (marriage, children, etc.). My passion grew more and more and so much that I love to coach people today in money management.

In a recent article from the Harvard Business Review titled, “Teach Workers About the Perils of Debt”, experts found that employees are quite uneducated when it comes to personal finance. Surprise, surprise, you might say. Well, companies might be missing the boat on this one if they aren’t moving to include more educational tools (outside of the 401k/retirement) to help their employees.

“In light of the money consumers are pouring into credit card fees and interest payments, wouldn’t it be wise for companies to put some effort into improving debt literacy, rather than focusing workplace programs exclusively on retirement savings? Piling up credit card debt at rates of 18% or higher while investing a small fraction of weekly pay into a 401k may not be the best way for an employee to achieve financial well-being.”

But doesn’t it go beyond financial well-being? If employees are better at managing their money, perhaps they’ll be better at managing company resources. Perhaps they will carry with them less stress to the workplace which certainly impacts their ability to perform at the highest level. These are just my theories, but I think would be worth trying to measure for companies.

One of the things I’ve always been trained to do is to manage the company’s money like it were mine. But what if I’m drowning in debt and spending recklessly? “But I don’t have much financial responsibility at my company”, you say. Really? The smallest matters count. Are you wasteful with office supplies? Yes? Then you aren’t managing resources wisely and perhaps money management education could help.

This is a great opportunity for companies today. If they care for their employees, or provide them the instruction to better manage their money; I believe people will be able to give them more in return. Basic courses in budgeting and debt reduction in addition to the retirement planning would be a great start.

What do you think about employers investing in such programs for their people?



Last Edited: May 7, 2016 @ 12:02 pm The content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Jason Price

Jason Price is a husband, dad, budget coach and blogger. He shares personal money management tips and tools to help people make progress on their financial journeys. Connect with Jason on Twitter or read more of his PT Money articles.

Comments

  1. The military actually gives their new troops a basic financial course, however, it is very basic. I’ve known many troops who got into financial trouble because they didn’t know much about money management. This lack of financial education was actually one of the reasons I started blogging in the first place.

  2. Jason @ One Money Design says:

    Patrick, you bring up a great point I hadn’t thought about. This is an excellent opportunity for the millitary too! And it sounds like they’re heading in the right direction! This could be taken as far as helping professional athletes out as well who often get a lot of money quick, but don’t know much about managing it! Thanks for commenting.

  3. No, I think companies setting stuff up is great and helpful, responsibility should be in the person to learn more and budget themselves.

  4. Zach Younkin says:

    I do believe that companies should at least give their opportunity to learn about personal finance. It is a very important life skill that should be taught!

  5. Great article! Debt is absolutely crippling. Spend LESS than what you make. Credit cards are designed to allow you to spend more than you earn…trouble! In my blog I share experiences and my path to total debt elimination–including the house.

    Dollars Not Debt