Manager Tips: Build Financial Literacy

According to a 2020 report of the U.S. workforce, financial matters are the top cause of stress for employees, and employees who are financially stressed are more likely to be distracted and less productive at work. Financial stress also has a tremendous negative impact on employee well-being, especially their mental and physical health.

To help our employees alleviate their financial stress, a good place to start is by helping them build their financial literacy — that is, the knowledge and skills needed to make good financial decisions. Financial literacy includes skills like prioritizing spending, managing debt, budgeting, planning for financial emergencies, choosing the right insurance protection, and saving and investing to meet long-term goals.

Here are some ways to help your team become more financially literate:

1. Build your own financial literacy. Explore ways that you can improve your financial well-being and increase your awareness about money matters. The more informed you are, the more you can help others.
2. Encourage your team members to review their current financial state and better prepare for the future using this checklist. Remind them to view their elections for benefits like insurance and retirement, if applicable, to ensure they and their families are covered.
3. Choose a financial topic to highlight each week of this month. One week can be about budgeting, and the next about investing. Share practical tools or apps that you have found helpful and encourage others to share their own.
4. Learn about your spending cues and, if you’re comfortable to, share with your team so they can identify their own. Cues can sometimes be emotional — like the desire to celebrate with an impulse purchase when something good happens, or treat ourselves when we’ve had a bad day. Or, we can be triggered by other factors, like our social circles or family. Helping employees understand spending cues empowers them to take action to address them.
5. Promote open conversations about financial well-being. Make time during meetings for team members to share tips and tricks they’ve learned that might benefit others when it comes to saving, planning and investing. If an employee is experiencing financial stress, guide them to resources that can support them. Review the EAP Toolkit for Managers for an overview of resources and tools available.