“I can’t believe I didn’t learn about this in high school!”

If I had a dollar for every time I heard that statement in a client meeting they would likely be talking about “the next Warren Buffet: Caedmon Meisenheimer”

Maybe not. But I can dream.

In this blog post, I want to briefly run over how the idea of financial literacy affects your family, your business, your employees, and your overall financial well being.

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Why is financial literacy important?

This should be easy. I’ve never met anyone who has said “I wish the school system spent more time on mitochondria and less time on taxes, credit scores, budgeting, etc.”

I’ve never heard that. But maybe you have.

But in case you aren’t convinced:

Money serves as the foundation of our economy. From an economics standpoint, currency is what allows us to be able to create products and provide services to provide for our families! From a personal standpoint, money is a tool that allows us to be able to pay our bills and achieve our goals.

So it makes great logical sense that EVERYONE should deserve to have access to financial literacy education. If our economy runs on this currency, everyone needs to know how to utilize it to achieve their goals.

But yet they don’t.

78% of American workers – likely 78% of your team members – are living paycheck to paycheck. (1)

This is a big issue for businesses and business owners everywhere.

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How does financial literacy training help my employees?

There are three numbers that I believe are essential to business owners in 2024. And yet, no one is talking about them.

These numbers are:

1. 67%

2. $17.5 trillion

3. 156 hours

What do these numbers mean?

 

1. 67% of American households do not have enough savings to cover a $400 emergency. (2)

Let’s say that your lead project manager has been delaying maintenance on the timing belt of his car.

All is fine until one day.

There is a 67% chance that your lead project manager doesn’t have the cash to be able to repair that in a timely manner.

Meaning that your team suffers.

 

2. The total US household debt is over $17.5 trillion. (3)

We get numb to hearing these large numbers all the time. But $17.5 trillion is nothing to sneeze at.

Maybe seeing it written out will change your mind. $17,500,000,000,000

That’s almost $60k PER PERSON, meaning that the average family of 4 has $240k of household debt.

 

3. 56% of employees admitted to spending at least 3 hours per week of company time stressing about or working on their personal finances. (4)

That adds up to 156 hours per year. PER EMPLOYEE.

This should be self-evident.

If your employee is paid $20/hr, that is over $3,000 per year out of your pocket for your employee to work on/worry about their personal finances.

That’s IF it doesn’t bleed into and affect their work elsewhere.

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So we understand that there is a need for financial literacy education in the workplace.

And we agree that it would be beneficial for your business to equip its employees with the tools they need to successfully navigate their personal finances.

But are employees looking for this?

The answer is yes.

 

Imagine this:

You want to be the best employer you can possibly be. So you ask your employees how you can improve.

4 out of 10 ALL said the same exact thing. (5) They want access to a financial professional.

No, they aren’t talking about the guy who comes in once a year with his $4k suit and cufflinks and shows them pie charts and economic projections.

They want someone they can approach.

Someone they can ask questions on budgeting, saving, credit cards, investing, etc.

Someone who cares about their financial well-being.

Someone who isn’t there to make a sales pitch or sell a product.

 

 

Sources:

1. https://www.forbes.com/advisor/banking/living-paycheck-to-paycheck-statistics-2024/

2. https://finance.yahoo.com/news/percentage-americans-unable-cover-400-133058811.ht ml

3. https://fred.stlouisfed.org/series/PSAVERT

4. https://bestmoneymoves.com/blog/2023/07/12/5-surprising-statistics-about-employee-financial- wellness/

5. https://www.forbes.com/sites/onemind/2023/09/25/bridging-gaps-in-financial-well-being-for- employee-mental-health/?sh=46090868295d