Money struggles can have a negative effect on more than just a person’s job performance level. Someone who is concerned over their financial situation is more likely to take out a loan or even a hardship withdrawal against their retirement savings. This seriously hurts their ability to save long term and adds to the stress they feel, which can further diminish their production at work.
There has been an increasing demand for information on personal finance. Research has shown that many adults lack the financial knowledge to make competent and effective financial choices. Excessively high debt levels, low saving rates, becoming targets of investment fraud, delinquency on credit cards and bankruptcy have all been found to be related to financial illiteracy in individuals.
Lorgat (2003:8) stated that South Africans lack a generalised savings culture, one of the causes being little or no financial illiteracy on the part of the consumer. Employees are spending almost all of their income on consumption, resulting in little, if any, of their income being left for savings or investments.
Just as surely as financial problems can limit an employee’s output, providing assistance and teaching tools about handling money responsibly can reduce their stress level and raise their morale, thus benefitting your company as a whole.
The best tool an employee can receive to help turn their situation around is financial education provided by their employer. Good financial education means a person is shown a healthy overall approach to their money. That includes making a budget for their household, starting an emergency fund, paying off debt, and investing. When an employee doesn’t spend his or her time worrying about money, they are happier and more productive.
The power to initiate financial transformation and success for your employees starts with you. The result will be felt by your workers and your company for years to come. Contact firstname.lastname@example.org for more information.