Teachings on Financial Literacy

Teachings on Financial Literacy

Low financial literacy among the general public is a familiar spectacle where money related worries result in absenteeism, poor performance, and stress in most organizations (Allgood & Walstad, 2016). Research states that a healthy, engaged, and happy workforce is essential in business growth and productivity. In modern organizations, it has become the responsibility of employers more than ever to shift their focus to the improvement of financial education for people in their employ. This intervention gets aimed at aiding staff gain confidence to develop their financial wellbeing.  They get the courage to tackle alterations in personal situations and the whole economic environment without reducing productivity and focus at work. The teachings and financial stability in organizations also helps in the long-term retention of employees.

The improvement of employee wellbeing and financial literacy lies not only in teaching staff on saving more or better budget handling but incorporates other factors. The process is a complicated endeavor that requires multi-faceted action in the event of its success; enduring results are to get attained.  There are numerous steps or things companies can do to tackle poor employee financial literacy and aid in the development of a secure and productive workforce. There is evidence from studies and research that most employees lack the resolve to develop budgeting skills on their own and often prefer impulsive spending to the latter.

The act of teaching financial literacy to employees to better handle their finances through budgeting does not offer a full solution to benefit everyone, as mentioned above. In the case approaches formulated in this endeavor do not suit individuals or their preferences and personalities; they are more likely to abandon the cause midstream. Through the use of an employee-centered approach that is tailored to the needs of employees’ existing preferences and habits while addressing financial priorities that are current, form a much reasonable basis of success. Some of the suggested strategies below get expected to do the trick.

Components of My Plan

1. Selection of specific workforce relevant tools

There is a wide range of devices ranging from spreadsheets to financial advisors, websites to apps. These selections of different tools are at the disposal of employees or individuals with the urge to better personal financial management. As much as the human characteristic is to spend on different things, there is a vast differentiation in the financial management tools favored by diverse groups. According to Willis Towers Watson’s survey of the UAE employees in terms of gender, age, and annual income, it got realized that employees in all relevant gatherings favored saving and spending tracking tools to other options. People aged 40 and above in the study opted for assistance by a financial advisor, while those below 40 years preferred mobile apps and online portals as their preferred mode of management. Male employees had a higher preference compared to their female counterparts. As a manager, asking for employee input into the decision-making process goes a long way, especially if one is unsure based on specific demographics.  The act will aid in the confirmation of the tools to get used while enduring time and money get not wasted of futile strategies.

1. Identification of employee priorities

Having a reflective outlook in matters like teaching on personal issues requires an in-depth understanding of processes like employee payment of mortgages and debt. Taking a lesson from Willis Towers Watson’s research, we get able to understand that the top five priorities of employees in the UAE were housing costs, home purchase savings, general savings, retirement savings, and household costs. Through the in-depth analysis of age and gender parameters, household funding was a significant priority, especially in women, while men got consumed with rent or mortgage payment. Retirement savings were more up the alley of males as compared to females, where married men cited retirement as more important than their single counterparts. The aforementioned inclusive perspective on employee life gives the best answers as to how to approach teaching financial management and the type of tools and personnel to be used in the procedure.

1. The setting of pre-agreed boundaries

The attempt to improve employee financial literacy requires the striking of a delicate balance that makes sure employees willingly provide the support needed by relevant staff in the program, thus reducing cases of intrusion. Recent findings indicate that most employees expect the encouragement of their employers and their facilitation of their financial literacy improvement without the involvement of the relevant parties (Calcagno et al., 2019). According to the UAE study by Willis, 60% of employees are content with employers providing tools dedicated to outlining personalized suggestions on employee sectors of improvement in finances. In comparison, 43% are satisfied with the sending of personalized messages on specific financial decisions from employers to employees.

Justification

The strategies mentioned above indicate the methods of improvement of employee financial literacy. The result is, however, dependent on the clear communication from the management to the supporting staff before change implementation in the organizations (Lusardi & Mitchell, 2017). Positive and productive change is often likely to get achieved in instances where a company chooses the approach of addressing the specific issue rather than the pre-mediated or assumed requirements of its employees. As much as it is correct that financial literacy is paramount for the minimization of monetary worries, it only forms a piece of the broader puzzle that gets identified as financial wellness.

Not only is it not enough for employees to achieve financial wellbeing and security through the acquisition of knowledge and skills to aid in their financial management, but they get also expected to put all they have learned into action. There is a paramount need for companies and managerial staff as me to provide employment benefits and services that get centered on the improvement of financial literacy. This action acts as a means of putting employees on the path to financial security. The achievement of higher financial literacy gradually turns into employees having more confidence to make personal decisions; this is when further support comes into play. The additional support is intended for employees to make progress up the scale that leads to financial wellness by getting out of debt and acquiring positive cash flow. The acquisition of short and long term savings sets them on the path to wealth creation and achievement of financial independence.

Conclusion

Evidently, for a couple of years, managers have tried incorporating financial management process transformation to improve organizational structure performance. These processes are directly affected by corporate politics, and their outcomes have yet to be thoroughly analyzed. The methodology to get used is that of a pluralist as the case study aims at dividing itself into four distinct segments. The change also helps in the application of diverse perspectives that help in the development of detailed accounts of how each section is affected by the transformative initiative.

References

Allgood, S., & Walstad, W. B. (2016). The effects of perceived and actual financial literacy on financial behaviors. Economic Inquiry, 54(1), 675-697.

Calcagno, R., Alperovych, Y., & Quas, A. (2019). Financial literacy and entrepreneurship. New Frontiers In Entrepreneurial Finance Research, 271.

Lusardi, A., & Mitchell, O. S. (2017). How ordinary consumers make complex economic decisions: Financial literacy and retirement readiness—Quarterly Journal of Finance, 7(03), 1750008.