A national team of academic scholars and other experts concluded that 30 million workers or one in four is seriously distressed and dissatisfied with their personal financial situations. This was summarized in a report entitled: Financial Distress Among American Workers (2005). Their other conclusions state that people who are financially distressed live from paycheck to paycheck. Financial distress is related to poor health and worker productivity. They found that financial problems are not confined to lower income levels but a larger proportion of low income families have financial distress. Federal Reserve Board Governor Edward M. Gramlich remarked that employers should make financial education for their employees a lifetime responsibility.
Eighty-eight percent of large companies offer financial education and they do so for the following reasons:
For the most part, employees do rely on their workplace to provide financial education. Financial education is not just an employee benefit. There has been much documentation about the the benefits of workplace financial education. It reduces absenteeism in general and work time used for personal financial matters in particular (Joo and Garman 1998). Other studies (Bernheim and Garrett, 2003) show that asset accumulation is higher for individuals who receive financial education in the workplace. Given the general lack of preparedness for the most important financial goal: retirement (EBRI 2006) it is important that employers continue to offer financial education at the workplace. Studies show that retirement planning seminars do help employees better prepare for retirement in that they engage in higher savings rates.
Bellevue Community College has developed eight courses that can be tailored to the workplace. The eight courses are personal money management, saving, credit, taxes, risk management, real estate, investments and employee benefits. The outcomes of these courses are the behaviors that constitute good personal financial management. The course can be offered in a various of formats. Employees can received college credit for completing them. For more information, contact Molly Blume firstname.lastname@example.org.
Garman et al., (2005, March 22) Financial Distress Among American Workers - Final Report: 30 Million Workers in American--One in Four--Are Seriously Financially Distressed and Dissatisfied Causing Negative Impacts on Individuals, Families, and Employers, Independent report from the authors that is available at www.EthomasGarman.net.
Kim, J. (2004) Impact of a Workplace Financial Education Program on Financial Attitude, Financial Behavior, Financial Well-Being and Financial Knowledge.
Hilgert, M. and Hogarth, J. (2003) Household Financial Management: The Connection between Knowledge and Behavior
Joo, S. and Garman, T. (1998) The Potential Effects of Workplace Financial Education Based on the Relationship between Personal Financial Wellness and Worker Job Productivity
Garman, T. (1997) Personal Finance Education for Employees: Evidence On The Bottom-line Benefits.
Bernheim, B. and Garrett, D. (2003) The effects of financial education in the workplace: evidence from a survey of households
Bayer, P., Bernheim, B. and Scholz, J., (1996) The Effects of Financial Education in the Workplace: Evidence from a Survey of Employers
Lusardi, A. (2004) Saving and Effectiveness of Financial Education
EBRI (2006) The 2006 Retirement Confidence Survey
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Last updated: 10/21/06