Employers: having money smart workers saves you big…and Employees/individuals: being money smart will save your neck because the world has changed big time.Feb 20th, 2013 | By Kathy Graham | Category: Financial Literacy
Why should companies care about how financially literate—or money smart—their workers are?
- Lack of financial literacy can contribute to financial stress = distracted at work employees = poor productivity.
- “American workers spend an average of 28 hours a month researching personal financial issues,” according the Financial Education and Literacy Advisors (Time magazine, 7/19/12) = productivity loss.
- Lack of financial literacy can contribute to poorer health = higher absenteeism, increased disability, increased hospital visits = higher medical claims.
- Lack of financial literacy can impact mental health even more than physical health (Bennett et al, BMC) = increased chance of lawsuits, higher turnover with its associated costs, and lower productivity.
Why should employees/individuals care about how financially literate—or money smart—they are?
- Only 15–25% of U.S. private sector workers have defined-benefit (pension) plans; and even though 84% of U.S. government employees have defined-benefit plans—those plans are about $3.2 TRILLION underfunded; and the rest of the world is going in the same direction—in India only 10-15% of its people are covered by a pension according to Dr. Suresh Chandra Bihari in his article Financial Literacy: The Key to Inclusive Growth in The Journal of Indian Institute of Banking and Finance—and the 11/6/12 OECD article, Pensions: Raising retirement ages and expanding private pension coverage essential, says OECD, states “reforms over the past decade have cut future public pension payouts, typically by 20-25%. People starting work today can expect a net public pension of about half their net earnings on average in OECD countries if they retire after a full career, at the official retirement age,” and the article also says that “increases in retirement ages are underway or planned in 28 out of the 34 OECD countries.” = you now need to save enough to cover your retirement yourself…and if you aren’t financially savvy with your investment and saving choices, you can see that money and the quality of your old age life disappear.
- Lack of financial literacy can contribute to financial stress = poor productivity = less money & career choices.
- Lack of financial literacy can contribute to poorer mental and physical health = higher absenteeism, increased disability, increased hospital visits = higher medical claims and a diminished quality of life.
- Lack of financial literacy is highest among: young adults, non-business-oriented individuals, non-financial career individuals, women, widows, blue collar, unemployed, singles, the less well-off, and ethnic minorities = the people who need to make every penny count the most are the ones who are most likely not to have the knowledge to make those money smart choices.
The good news is that financial literacy is something that you can learn because it can be taught. In fact, the Federal Reserve Bank of Chicago created in 2002 a public awareness campaign called Money Smart Week that offers FREE events in over a dozen states, including in Illinois. This year’s Money Smart Week occurs April 20-27, 2013. A list of events on budgeting, saving, etc. for individuals to attend for FREE can be found at www.moneysmartweek.org.
Of special note,
- COMPANIES: if you’re interested in having Money Smart Week events at your place of work OR you would like to distribute info on where your employees can attend these free financial literacy educational events, please call me at 630.466.7095 as I’m the Co-Chair of the Money Smart Week At the Workplace Initiative…so I’d be pleased to help you get these free money smart educational programs to your employees at no cost.
- EVERYONE: attend the 2013 Financial Literacy and Education Summit on April 17, 2013, which is co-hosted by the Federal Reserve Bank of Chicago and Visa Inc. and focuses this year on “Improving Women’s Financial Literacy & Capabilities Globally.” For more info and to register: www.practicalmoneyskills.com.
- EVERYONE: attend “How to Get and Enjoy the Career You Want and Make the Money You Need” on Friday, April 26, 2013 with me AND Gail MarksJarvis, The Chicago Tribune’s Nationally Syndicated Financial Columnist and award-winning author of the book, Saving for Retirement (Without Living Like a Pauper or Winning the Lottery). It’s free and offers FREE handouts and chances to win both mine and Gail’s books, plus you’ll hear about:
« how to make more money while getting, keeping, and growing your job/career
« how to keep and grow the money you make while still enjoying life and taking care of the people you love.
……and you can ask the questions you want the answers to, such as:
« AFTER SCHOOL: how can I find my dream job? How can I afford to work my dream job with my huge college debt load? Are there other choices besides working whatever comes my way so I can pay the bills?
« THRU MID-CAREER: how can I grow my career, pay for the family, take care of my parents, and still find something to put away for retirement and have a bit of fun to boot? I am so squished!
« AT THE TOP: I’m at the top of my career…so what do I do next?…and how do I afford doing it?
« RETIRED: I have plenty of money, but what do I do with my time? OR I’m afraid that I will outlive my savings—what can I do to prevent that from happening while still enjoying my life today?
Visit www.linkedin.com/pub/kathleen-graham/0/aa/a59/ for more info under Publications section.
Registration is required so email your RSVP to firstname.lastname@example.org or call me at 630.466.7095 to register.
- EVERYONE: details and registration for all the FREE financial literacy education programs during Money Smart Week 2013 can be found at www.moneysmartweek.org/.
According to Wikipedia, financial literacy is “the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others.”
Increasing money smarts makes big sense for all of us, because less poverty means more money to spend/invest (which should flow into higher GDPs), less crime, better health for all (because there are fewer sick untreated people), and less need for expensive government programs to take care of the less well-off (because those with less are making the best choices available that enables them and their children to live better—and more—productive—lives). Here in the U.S., Money Smart Week even lets employers and individuals gain this financial literacy knowledge for free. What could be better!