Essential topics in effective employee financial education

By Thomas Charla
Thomas Charla is director of business markets at MassMutual.
Posted on Jan 29, 2019

You’ve no doubt seen employees struggle with financial well-being. You may have even seen, first-hand, employees making less than ideal financial decisions. In fact, six in 10 business owners report seeing employees make decisions that could be detrimental to their long-term retirement savings, according to a MassMutual 2017 Small Business Employee Financial Wellness survey.1

When it comes to making better financial decisions, you may think the financial education included in benefit programs you currently offer already address many of these concerns. When MassMutual surveyed business owners on what educational topics are currently made available to employees, those most often cited included: retirement planning, understanding Social Security, protecting income through disability income insurance, health savings accounts, and understanding life insurance. Not surprising, these topics closely align with what some benefit vendors may typically offer as part of an employee benefit package.

Bridging the financial wellness divide

But there’s a knowledge gap between what it takes to implement everyday smart money strategies and more complicated tasks, such as determining how much to contribute to 401(k) plans and which investments to choose. Some financial education programs in the workplace may fall short on teaching financial basics.

Below are some topics many of the surveyed small business owners said they would like to include in the financial education curriculum they make available to help their employees make better financial decisions:

  • Common money mistakes: Almost half of business owners said they’d like to offer employees ways to identify and tackle everyday money traps. All employees, regardless of age or status, can benefit from recognizing financial pitfalls so they can avoid costly mistakes that derail their financial and retirement plans.
  • Debt management and budgeting: These topics are the foundation for a comprehensive employee financial education program. Forty-two percent of business owners said they’d like to offer these topics, yet only about half of them do so, according to the MassMutual survey. A 2017 CareerBuilder survey , across industries and company sizes in the private sector, found that over 70 percent of all workers said they’re both in debt and living paycheck to paycheck.It’s clear that many Americans would benefit from learning the basics of budgeting and debt management .
  • Retirement risks, readiness, and sources of retirement income: These complementary topics rounded out the list of top vote getters in MassMutual’s survey for what business owners would like to offer their employees. While your employees may already have some retirement education topics available to them through your current retirement plan administrator, a comprehensive retirement planning curriculum can go a long way toward ensuring your employees are getting the maximum benefit from their retirement plans.
  • Investing: Employees may be unaware of how to grow their retirement savings and their own tolerance for investment risk. Less than 1-in-4 business owners offer education on topics such as asset allocation , investment basics, and personal risk assessments.

Small business owners seem to be on the right track with their assessment of what their employees need from a financial education program. The most requested financial wellness topics cited by employees align with what small business owners also say are valuable. These topics include financial education programs aimed at budgeting, saving for retirement, paying off debt and investing.

By giving your employees user-friendly and effective financial education tools that 62 percent of employees say they would use , you can help them reduce short-term financial stress and lay the groundwork for long-term financial success.3

Learn more from MassMutual…

Employee financial wellness: Have a game plan

How to be a great workplace for parents

Ways to increase the value of your business

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MassMutual 2017 Small Business Employee Financial Wellness Survey.

Careerbuilder, “Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers,” Aug. 24, 2017.

Harris Poll/Purchasing Power, “2016 Purchasing Power Special Report: An Employee Crisis: Financial Literacy,” April 2016.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MassMutual.