How to Empower Employees with Financial Education
If your employees are stressed about their financial situations, it can mean they are less focused at work and their productivity can suffer. So, it makes sense to empower your employees with financial education for their sakes and yours.
Provide Financial Counseling
The primary way of empowering your employees with financial education is the simplest: provide financial counselling. You can do that in-house or via a contracted company with professional finance managers. Employees will then have access to trusted advice and information on all important financial topics, from debt restructuring and homeownership funding to auto insurance and loan consolidation. Empowering employees with financial education basically comes down to good communication, so make sure your company or your contractor communicates well via financial counselling.
Promote Good Credit Scores
One of the fundamental things that can affect people’s finances is their credit score. When people have low credit scores, it means they will have high banking and credit card fees and it will be more difficult to get a loan or a good mortgage rate. When your employees are in a continual cycle of financial insecurity, it will cause them to be stressed; which will not help them or your company.
When people have credit scores in the 500s and low 600s, they are in the worst risk category as far as lenders are concerned, whereas having a credit score between 650 and 750 is regarded as a good credit score and will enable people to qualify for loans at better rates.
So, if an employee is looking for a mortgage and comparing rates from different insurers on sites like Moneywise, he or she will be much better positioned to get a good rate when he or she has a good credit score. Educate your employees on how to attain good credit scores. When they get their scores above the mid-600s, they will no longer have to stress about things like qualifying for a mortgage or auto insurance, and their focus and productivity at work will increase.
Educate Your Employees About Earned Income Tax Credit
Many employees in the US do not realize that they can qualify for the federally-funded Earned Income Tax Credit. When you educate your employees on EITC funding and certification, you can effectively provide your employees with a 10% pay increase at no additional cost to your company. It is a simple thing that will go a long way in empowering your employees financially.
Provide 401(k) Education
Offering retirement plan options is a fantastic way of providing and promoting financial wellness to your employees. But it is just as important to educate your employees about their options and be available to answer any questions they may have about the plans. Make sure your employees understand their 401(k) or 403(b) options so that they can use them to maximize their value. It is a good idea to offer ongoing education via things like workshops and webinars.
Enable Your Employees to Access Healthcare Benefits Information
If your company provides employees with healthcare benefits, you are already empowering your workers. But you can take it a step further by making it easy for your employees to access useful tools. For instance, if you can, set up a webpage portal or an intuitive smartphone app that enables your employees to track and monitor their costs, claims, and deductibles. When they understand how much they need to put aside for things like medical emergencies, and they know what claims they have previously made, your employees will be able to take control of their finances better and become more empowered.
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