The Value of Family-Related Benefits in Financial Literacy Programs
There’s one family-related employee benefit that, although it does not get as much attention as paid parental leave, can have a huge impact on employees’ children’s lives: financial literacy education.
Family-related benefits, such as paid parental leave for both mothers and fathers, adoption benefits and child care flex spending accounts, are becoming more popular in workplaces. However, there is one family-related benefit that is not discussed as often, yet it can make a tremendously positive impact in the lives of your employees’ children.
Financial literacy education for children is desperately needed in our country. Only 17 states require high school students to take a course in personal finance, according to the Council for Economic Education’s 2016 Survey of the States.
Parents know they should be doing more to educate their children on personal finance topics, but they are either reluctant or don’t know how to talk to their children about money.
Employers’ Role in Financial Literacy for Children
Children form most of their financial behaviors by age 7, according to the University of Cambridge. These deep-rooted beliefs will shape their lives as they grow into adulthood and will play a major role in how they deal with finances. Moreover, their longstanding effects will last long past adulthood. Their formed financial beliefs can affect their children, grandchildren and future generations past them. How parents talk to their children about money is a boundless matter.
Despite this information, nearly 75 percent of parents are reluctant to talk to their children about finances, according to a 2015 study conducted by T. Rowe Price.
Employers are in an ideal position to offer family-focused financial literacy workshops as a benefit to the parents, and even grandparents, in their organization. After all, 93 percent of companies intend to focus on the financial wellbeing of their employees in a way that extends beyond retirement, according to an Aon Hewitt survey.
Family-focused financial education is becoming an increasingly popular benefit for employers to offer. Just as employees find value in personal financial education offered by their employers, this type of family-focused financial training empowers them to help them raise financially fit children.
Typically hosted by a qualified financial consultant, these types of educational programs provide employees with simple yet effective ways to teach important financial lessons to children of all ages through everyday conversations and activities.
Furthermore, employers can consider allowing employees to bring spouses and co-parents to the event, as its added value will further benefit the entire family. In these instances, after-hours events are a great option for employers, as working spouses will have the opportunity to attend. Companies can even arrange for child care services during such events, making them more easily accessible to families with young children.
The Value of Helping Employees Become Better Teachers
As we enter what’s being referred to as “The Great Transfer of Wealth,” the need to teach children how to become financially responsible adults will become increasingly important to parents.
For one, the baby boomer generation is set to transfer $41 trillion in assets to their Gen X and millennial children during this transfer, the Boston College Social Welfare Research Institute found. This impending transfer of wealth has left many families wondering how they should have meaningful conversations with their heirs to ensure inheritances are safeguarded.
Second, parents often do not feel comfortable discussing finances with their children. The root of this problem is that many parents do not even know how to have these conversations, meaning a considerable amount of money will be put in the hands of potentially fiscally incompetent children who are at risk of making poor money management choices with their inheritances.
Sixty percent of unsuccessful transfer of wealth is due to a lack of communication and trust, according to Roy Williams and Vic Preisser, the authors of the book “Preparing Heirs.” This further validates the need for such education.
How Employers Benefit
Though it is quite obvious why parents and grandparents alike require this education, it might not be as apparent why employers should be the ones providing it.
However, there are numerous reasons why companies would benefit from offering this education to their employees. Many studies have found that there’s a direct correlation in the workplace between financial distress and productivity. Stressed employees are often less productive, take time off from work to deal with their finances, and are more likely to cite health issues caused by financial stress, according to PricewaterhouseCoopers. When financial education is offered, employees are more likely to become fiscally responsible and have these stressors affecting work eliminated.
These many findings prove why there’s such a strong case for family financial literacy programs in the workplace. As employers are gradually adding new family-related benefits, it’s important they keep in mind all aspects of a family’s wellbeing, including their financial health.
Kyle Sanders in the owner and lead financial consultant of Legacy Consultants Group, a financial advisory firm based in Indianapolis. Comment below or email email@example.com.