Do Employees Need Personal Finance Help?

It’s hard to concentrate on your work when you constantly have financial concerns on your mind, like how to pay off your student debt, or how to make all of your mortgage payments.

A study, released last week by PwC, and summarized as a part of this Reuters report, found that a quarter of U.S. workers said financial worries caused them health problems. Forty percent said finances distracted them at work, and 15 percent said these problems made them miss work, according to the study, which was conducted in February, and surveyed 1,600 working U.S. adults ages 21 to 75.

A TV commercial caught my attention from a company called Gradify, which says it enables companies to help workers pay off college debt. I found this intriguing—that companies might realize it’s in their interest to help employees better manage their financial burdens.

In addition to offering help paying off student debt, I wonder about the benefit of providing optional (or maybe even mandatory) courses in personal finance. I was never interested in business, or personal finance, and (knock wood) have been OK so far because my financial burdens, as a woman on her own, in a rented apartment, are not complex or overwhelming. But what if I had a family with a mortgaged house and children with many needs, including college? I would feel more burdened in that case, and might appreciate guidance on how to save or invest my money, so I could meet all of my financial obligations.

Does your company offer classes in personal finance? It’s a good deed on its own to offer lessons in how employees can better manage their own money, but it also might benefit the company. In addition to alleviating distractions from work, caused by worry about money, learning how to better manage your personal finances can translate into the ability to better manage the company’s finances. If employees are unable to manage their own financial burdens, will they be able to manage the financial burdens of a department of your company?

It can be frightening to turn over a company-sponsored budget to an employee who is deeply in personal debt. To get in that personal financial hole, the employee may have not been able to control him or herself from purchasing unnecessary items, or making unwise purchases, buying a product at a high price when a similar product a lower price was available. Think about how those tendencies could translate to the spending he or she does on behalf of your company.

A key to personal finance is understanding the difference between necessary and luxury purchases, and then deciding whether there is a similar, lower-cost product to the one you would like to purchase. Then, it’s knowing how to make your purchases last as long as possible, so you don’t need to reinvest in the product every one or two, years, or more frequently. Those same principles apply when maintaining a budget for a work group. You don’t want an employee pushing to make superfluous purchases, or asking repeatedly to buy products that are more expensive than they need to be.

A personal finance course, in which employees review their own personal spending habits and brainstorm ways to lower their expenses, or at least keep them in check, could be valuable both to you and them. In addition to working on their own personal budgets, simulation technology could be used to create hypothetical spending situations they may confront in the future, such as the need to buy a house, an opportunity to invest in a friend’s business, or an unexpected event, such as an illness in the family. The simulation would show employees options to choose from in deciding what to do, and what the ramifications of those decisions would be.

Once the lessons of personal finance have been mastered, you could have a personal finance help portal sponsored by your company in partnership with a financial institution. Employees would be able to log on through your intranet to ask questions. Employees would receive a response from a financial professional to their questions, with the option to click to make an appointment to speak further with the finance professional. It would seem like a great opportunity for a financial institution to find new clients, and provide employees with answers from a trained professional.

Does your company offer employees guidance and help to manage their personal finances? What are the advantages to lessening the financial concerns of employees?

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