Financial literacy awareness, if done right, can help change the wealth trajectory of America’s workers and set them on a course for a comfortable retirement. Whether it is inside or outside of the 401k financial literacy awareness programs help employees’ comprehension of basic financial concepts, so they can manage their money better.
It appears debt has become a form of nouveau-wealth. In this day-and-age when many people are driven by instant gratification while trying their darnedest to keep up with the Joneses on social media (which isn’t real, by the way), all they’ve got to show for it is a library of Instagram-worthy photos and a mountain of debt. A debt-driven society cannot build wealth – Not for today, and certainly not for retirement. It may sound like a tall order for employers to convince workers to change their spendthrift ways and set aside savings for a future they can’t fully get their heads around, but 401k financial literacy awareness can make a significant impact on the financial well-being of workers over time.
U.S. employees may be facing serious money troubles, and Most of them could really use your help. Consider these eye-opening stats from a CareerBuilder study referenced in a blog post on financial literacy awareness from personal finance guru Dave Ramsey:
- Nearly four out of five American workers live paycheck to paycheck;
- Over a quarter don’t save any money from month to month; and
- Almost 75% are in some sort of debt (and unfortunately many assume they always will be in debt.)
What’s more, Americans hold over $1 trillion (yes, with a “T”) in credit card debt, over $2.8 trillion in nonrevolving debt (loans), and $1.22 trillion in auto loans, according to 2018 data from the Federal Reserve. The Dunkin’ Donuts slogan is “America runs on Dunkin.’” Perhaps an accurate national slogan might be “America runs on debt.” We certainly have a lot of it.
And we’re stressed — a 2017 MarketWatch report found that 49% of Americans are concerned, anxious or fearful about their current financial well-being. That’s not good for employees or employers — that financial stress results in lost productivity, a distracted workforce, and potentially, higher numbers of sick days, all of which adversely impact companies’ bottom lines.
What is an employer to do to help employees fine-tune their financial literacy awareness finances and live better, both while working and in retirement? An effective 401k financial literacy awareness program is a good place to start. Even if your organization doesn’t have a formal program in place or doesn’t have the budget to implement one right now, there are ways you can help boost financial literacy in the workplace. The execution may look different from employer to employer — from hosting on-site lunch n’ learns on basics like budgeting, to regularly emailing articles to employees about financial fundamentals like building an emergency savings fund, to full-scale 401k financial literacy awareness programs hosted by outside service providers with all the bells and whistles.
The point is not the grandiosity your 401k financial literacy awareness program. Even small steps can make a huge difference when it comes to helping employees get a handle on their money. Other options to explore? Tune in to the conversation on cutting-edge benefits such as student loan repayment programs, where employers may assist workers in paying down student loans while helping them save for retirement, or building an emergency fund via companion “sidecar savings accounts” to the retirement plan to boost financial security.
If you spend any amount of time listening to Dave Ramsey (and this author has), you’ll hear countless stories of people who got their financial act together, just by being educated on the benefit of having a plan and taking the appropriate steps to take to dig themselves out of financial ruin. The good news, it can be done, and those who achieve financial security typically go on to live and retire comfortably, while being wildly generous along the way. It all starts with education. 401k financial literacy awareness programs are an effective way to help employees ditch debt and build wealth for the future.